Three dirty little secrets of successful processors

Well, here it is. I’ve been sitting on this viewpoint for a long time, wondering whether to release it or not…and now is the time. With a historic recession and the collapse of iconic OEM customers in several manufacturing sectors, for many businesses staying alive means dropping the gloves, and refocusing on what really matters. To do that, we have to reexamine some of the myths, misconceptions and outright lies that we’ve lived by for a decade or more.

Better not be! Your business should be built around profitability, pure and simple. If you’re bidding too low to get the business and delivering quality you can’t afford, your days are numbered. This also goes for processors that win contracts that supply all or most of a critical component to an OEM…if you think that this gives them an incentive to ensure your survival, you’re wrong. Many customers — and more importantly, their procurement systems — think in terms of individual jobs, financial quarters or performance review cycles, not about the failure of a critical supplier.

Why? Anything you do that goes beyond your contractual obligations and common sense simply costs you money. If you see something the customer has overlooked, by all means tell them, but don’t add value that the customer didn’t ask for, or doesn’t notice. I remember a sales engineer who would routinely scour the customer’s print/specs and find problems, then negotiate a solution that always involved a little more money; or, if pricing was fixed, a little higher volume. Why? Because to establish a value for that service, somebody has to exchange some value in return, whether it’s a higher price, or a steak sandwich and a beer. Don’t give it away.

Great, but who defines “defects”? This in not trivial; mold or extrude to wide spec parameters well within your machine’s capability and you’ll get there…at a cost. It’s expensive to use that new all-electric press to mold perfect swizzle sticks…is zero defects really a sensible goal here? I once saw an operation that fed tiny plastic insulators into an automated assembly fixture using a vibratory feeder…bad parts simply didn’t feed, and were just poured out of the hopper at the end of a run. It was cheaper to intercept defective parts at the customer’s line than mold for zero defects because the part could be run on an older, less capable press, saving everybody money. Sometimes “defects” are a good thing.

My grandfather, who worked as a mill manager in the English textile industry almost 100 years ago, invented a machine that would spray water onto bales of cotton. Why? The cotton was sold by weight, and the spec allowed five per cent moisture, so dry bales were wetted appropriately. He delivered quality product, on time, and his customers were happy…as were the mill owners! I know this isn’t politically correct, and I expect many of you will disagree, but — as the flight attendants always tell you — when the plane decompresses, you put the oxygen mask on your own face first, because if you pass out you can’t help anybody else. There’s a lesson there. CPL