Tips for Selecting an Equipment Supplier

Posted on Friday, July 8, 2016

By: Marty Sawyer

Before the internet age, to create a design concept for your equipment you had to rely on either your inhouse engineering knowledge or your vendor’s. Since the internet, we are drowning in opinions as well as information. Maybe it’s time to get back to the basics.

In the book “To Sell Is Human,” Daniel Pink discusses the used car industry. In it, he cites a 1970s paper entitled “The Market for Lemons,” which won a Nobel Prize in Economics. The paper analyzed who had the power in the selling relationship—a used car salesman vs. an average consumer. At that time, a consumer had no way to know if a car was a lemon or a great car. According to the salesman, all cars were driven by grandmothers once a week to church on Sunday. The phrase “let the buyer beware” became deservedly synonymous with the used car industry.

Fast forward 30 years, and the Internet has changed everything for that industry. Now the consumer is armed with a Carfax that researches the car’s accident history. You can find the price for similar cars in surrounding areas. Behavioral economics today say that the slick, pushy salesman is now outdated and will ultimately be unsuccessful because today the consumer is empowered. The customer now holds the power of information, and industries have been revolutionized because of it.

So many industries have drastically changed due to the mass of information now available. Now that everyone has all the world’s knowledge available through a device in their pocket, how has this changed the coatings industry? More specifically, how has the buying process changed for coatings equipment? The short answer is, surprisingly, not that much.

Thirty years ago, the coating industry was in a wave of change, but for a different reason. A massive shift from wet paint to powder was in process. There were a small number of equipment suppliers at the time and they were very busy. Jump ahead three decades and the coatings equipment industry, like so many others, has evolved, but the internet has not played a huge role. If you are buying standard equipment sold by model numbers, the internet has made finding possible vendors easier, but beyond the ease of communication the process has not changed much. If you are buying custom equipment, the internet again has helped in finding vendors, but if anything it has made selection more difficult.

Before the internet age, to create a design concept for your equipment you had to rely on either your in-house engineering knowledge or your vendor’s. Since the internet, information about what comprises a good or poor design seems ubiquitous. Opinions are everywhere and packaged in well-designed websites that make trust seem easy. The challenge lies in the huge amount of information that is so easily accessible. Sometimes this information is contradictory. For example, one source might say that in a convection oven, top down airflow is best. The next source cites side discharge as superior. And the bottom-up advocates preach the superiority of that design. Infrared (IR) gets equally conflicting pontifications. It doesn’t work or it will work on anything—longwave, shortwave. Differing opinions can be found on website after website.

How is a buyer supposed to weed though so much conflicting information when sellers are promoting what they make, which may or may not match what the user needs? Often the answer is complex—much like the equipment. There is no one right answer. Rather, the answer often is “it depends.”

Do you have the engineering talent in-house to disseminate the mass of technical information? If not, you are left to trust what your potential vendors say. The equipment to successfully clean, coat and cure can vary dramatically. The processes/line speeds/ production rates can also vary in size and scope to a dramatic level. Adding in the variability of parts and it is no wonder that manufactures make differing claims. Most custom designs are a complex solution to a complex customer process. What will work well in one environment may fail to meet expectations at another company—even those that perform similar work.

Other issues beside the internet have also driven change into the process of buying equipment. One of the big ones was the Great Recession. Most large manufacturers previously had “monument” engineers on staff. These employees were well versed in the manufacturing processes and the equipment designs needed to solve their problems. They often had comparable technical expertise to equipment suppliers and they were quite capable of creating a thorough specification for an equipment supplier to quote. After the Great Recession, many of these engineers were laid off. Companies weren’t buying capital equipment, so cuts were often made. Unfortunately, years later, many of those jobs have not been refilled. As capital projects have become more frequent, many billion dollar companies now utilize project manager engineers or plant managers to manage these projects. The challenge then becomes do these employees have the comprehensive knowledge needed to create a specification, and do they have the time to do the necessary research?

Another driver of change to the equipment industry is an issue that affects almost all manufacturing industries—demographics. The graying of manufacturing is affecting concern that affects companies from the welding to the engineering departments. The coatings industry saw significant growth in the 80s and 90s, and many of those employees are nearing retirement and the engineering talent is not being replaced at the same rate. In addition, rapid job changes are much more prevalent today, especially in the millennial generation. It is not uncommon today to work with multiple project managers because of job changes. Companies should consider this in selecting a vendor, as information can be lost through transitions and a successful purchase may look good on a resume. But if two years later there are issues caused by poor communication in the design process, you have few options. Clearly communicating performance expectations and drivers beyond just first cost is key to preventing the issues that can arise in the future. Whether the coatings industry is losing engineering talent through layoffs or attrition, the impact is the same. The experience and creativity and insights into solving problems has been reduced.

Return to the Basics

Adding in the often confusing and overly simplified input of the internet, how do companies make good selections for an equipment purchase that they will be happy with weeks, months and years later?

The best recommendation for purchasing equipment is to return to basics. First, you have to decide where the engineering specification will be created. Do you have sufficient in-house capabilities to specify the equipment? If you do not, you will need to hire an outside consultant to ensure you have a design concept to meet your performance. You can rely on your vendor for their application engineering expertise to help develop a specification for your process. If you are still in the vendor selection phase, then you can benefit from multiple designs, and most vendors will be willing to do this with a commitment that their ideas will be treated as proprietary.

If you are still seeking a supplier for your project, what is the best process? The best source is always recommendations from others. Industry partners can be a great resource. Also, chemical or powder suppliers can offer suggestions for companies they have worked with successfully. Lastly, you can do your own research on the Internet. Industry associations like PCI will have listings of possible partners. Based on a website, it may seem that your choices are vast. Making a batch oven may seem a common expertise, but even the simplest of products can vary greatly depending on your needs. Complexity is relative to a company’s expertise and experience. Some companies offer a more standard design, and some specialize in more custom applications. Do your research to understand which is a best fit for your needs as the talents of these companies might not cross over.

Once you have identified possible partners, next is the investigation phase. Visiting installations and talking to their references is a great way to learn if this supplier fits your needs. Another key to selecting your equipment partner is listening to what they say. Do they promptly return your phone call? Are they responsive to your questions? Do they create trust in their abilities? You will be operating this equipment for 15+ years, so having reliability in their follow up and after-market support is critical.

Once you have received a proposal for an equipment solution, now you need to select your vendor. First, cost is often the main, most discussed factor. Depending on your business needs, other considerations include how the design will impact your cost per piece. This is driven by material handling consideration, maintenance needs and operating costs over the life of the equipment, and time of the line. Another factor to consider is the potential vendor’s understanding of your business. Are they selling you what they make or is it tailored to your unique needs? How is their support after the sale? Can they share examples and references to validate their past performance?

As the selection process progresses, to try and get an apples-to-apples comparison—a spreadsheet analysis is often used, though custom equipment is very resistant to commoditization. Items chosen to compare may not identify the real drivers for equipment performance and durability and may give a false sense of uniformity of design. For example, pump sizes or tank sizes may be comparable, but many other factors in a proprietary design may not be easily identified that could have a dramatic impact on equipment performance. Identifying the impacts of these differences also requires a significant amount of technical expertise. A spreadsheet analysis may help in the cost-justification phase to get capital appropriations approved, but often does not tell the story of if the vendor and their equipment will perform to expectations. The best suggestion is to ask a lot of questions. A good partner will share their reasoning and approach so you can judge each company on their own merits compared to your specific needs.

The last thing to consider is how can you be an ideal customer? This may be different for each equipment supplier as company size, level of project management support desired, or equipment performance level can vary. The qualities of a desirable customer that are shared is an appreciation of the engineering investment and a willingness to invest in a long-term working relationship. The days of getting “free consulting” are waning. In its place are relationships that require communication on not only the design, manufacturing and installation process, but also how much business support and process engineering will be needed. Every vendor has a sweet spot and the more flexible you can be as a customer, the greater chance you have of finding equipment at the most competitive price made by manufacturers suitable as your partner. The best outcomes are driven by a good match between customer and vendor.

All in all, buying custom equipment is a lengthy and complex project. It can easily take two years from project creation to installation. Selecting the right partner, understanding unique needs and consistent and complete communication are the bedrocks of a good project. For vendors and customers, the goal is to be happy with your partner after the installation so that you can recommend them to others. If both sides approach the project as if they are looking for repeat business, chances are everyone will have a good outcome.

Marty Sawyer is CEO of Trimac Industrial Systems LLC, Kansas City, MO. She can be reached via email at msawyer@trimacsystems.com.