Invisible parts? In the day and age of manufacturers touting every aspect of the parts they make? We want every customer to see the beautiful parts we make and understand all the expertise, talent, and complex machinery used to make these parts that are almost “works of art.” Phooey.
Today’s precision mechanical component buyer is not buying parts. Well, they are buying the parts, but that is not really what you are selling. You are selling the total package that your company provides in order to help the end user meet their goals.
Think of it this way: We get an RFQ, reply to it, and hope to get an order for the parts. If we get an order, we make the parts, ship them, and get paid for the shipment. Then it happens. “Hello, this is Mr. Rejection from the quality department of My Big Customer, Inc., and we just received some parts that don’t meet our specifications.”
BANG. Visibility. Major visibility. Just the kind you don’t want, need, or have the time to deal with. So the normal discussions take place, involving a number of people at both the customer end and the supplier end. This takes up time and adds cost. The parts need to come back and get reviewed, which takes more time and adds more cost. Meanwhile, the customer, who has put in place the system limiting inventory to save money, is out of parts, and the pressure is on so their line won’t go down. If the line does go down, My Big Customer, Inc. is late with their delivery, which amounts to an enormous added cost.
Guess what? It happens every day, somewhere. But if your parts are invisible, it will not happen to you.
The theory of invisible parts is that the parts are secondary to the entire transaction. Sure they have to be made, shipped, and delivered. In reality though, the customer is not buying that. They are buying the security of knowing that the components they need will arrive as needed, per specification, at what they determines to be the lowest total cost. If we provide this security, the parts are invisible. Nobody beyond the assembly line ever needs to see them or hear about them.
We should all strive to make invisible parts. To do this, we need to ensure the systems we use drive the process in a way that meets delivery and order specifications without the need for double checking work. At the very least, we can achieve minimal visibility. Once Invisible Parts Inc. establishes itself as the supplier of choice, the key to expanding the footprint at My Big Customer, Inc. is selling itself. When they hear the name, the rest should be easy. Sell a solution, a total package, not just parts.
That is the road to lowest total cost for everyone, so we can all benefit to the business relationships we make.
Case in Point:
A laboratory instrument company has 40 parts that go into the new device they are taking to market. Some parts are a perfect fit for what we make. Some parts are border line. Some others should be made using a different technology that we don’t have and don’t want to get into.
But we have a past history with Our New Customer, Inc., so they tell us, “We don’t want to go find a qualified supplier for the parts you say you cannot make. We know that because of your systems, our total cost will be lower if you handle the supply chain, just like you do for the parts you do make for us. Please reconsider and quote with you supplying all of the parts to us.”
The natural reaction to that is: There is no way they will pay the price for us to qualify a supplier, place orders, take the stocking responsibilities on, make investments for inspection equipment and training for the same, and add a markup in order to even think about this being worth quoting.
Don’t forget they want all the “extra” services included, like Kanban shipments of low volumes packaged just so, labeled this particular way, handling the subcontract parts, all of it. We assigned someone to handle the project to see if this would really fly, as all the regular staff that estimate and prepare quotes, were doing “real quotes” – the one’s that we actually had a chance of getting orders for.
We did all of the above. Looking at the total price we said, “Wow, that’s high. I mean, if we get this order, they become a top-ten customer right away with the first order”.
Well, that was three years ago. We have been supplying Our New Customer, Inc. all of the parts for the entire project, and it has worked almost to perfection. Our New Customer, Inc. is happy to have one point of contact. We are not only making money with the business and enjoying the fruits of a new top-ten customer, we now approach “sales” in a whole new way.
It’s obvious; we did not just sell a product. We sold a solution. Oh yeah, and the parts? They’re invisible.