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Will the Vendor Support It?

   

Don't forget to put customer-support parameters high on your spreadsheet


           
By Harry C. Moser
President
Charmilles Technologies Corporation and Mikron
Lincolnshire, IL

        
        
The articles in this issue of Manufacturing Engineering focus on the buying decision. Similarly, Pat Ervin, CEO of Hardinge Inc. in his Viewpoints article in the September 2004 issue advised us to "Look At Machine Capability Before Buying." Clearly, the machine tool you purchase has to be able to produce your parts accurately and economically. For 95+% of real-world applications, in most machine tool categories, more than two and maybe 10 or 15 machine tool manufacturers (OEMs) can provide products that will meet the required technical and economic specs. When faced with such a fortunate dilemma, your optimal solution is to place a high priority on a range of key measures of customer support by the OEM or local factory-trained personnel. Doing so will optimize your long-term profitability, your credibility with your customers, and your peace-of-mind.       

When you're planning a purchase, make sure you understand your own needs. During almost 20 years at Charmilles, I have visited thousands of shops and met with thousands more at meetings and seminars. Some factors that characterize this market are:

  • Quality is assumed.
  • On-time delivery is monitored and required, especially in today's JIT/lean environment. A few missed deliveries can drop you down or off the approved-vendor list.
  • On-time delivery is one of the best ways for a North American shop to differentiate itself from lower-priced, but more distant, Asian competitors.
  • Though manufacturing is operating below 1997 - 1998 levels, there is still a shortage of skilled workers.
  • Business is improving; backlogs are growing, but will never be as large as they were in the late 1990s.
  • You can't job-out as quickly as you could a year ago because the job shops are busier today.

Conclusion: To meet your quoted deliveries, your machines must be consistently available to perform to specifications.

In my recent field visits, I have heard of shops waiting 2 - 3 months for standard parts for a down machine, and then not being able to schedule a service engineer to install the parts. Some OEMs have disappeared or abandoned models prematurely. But even if the OEM is gone, the lease still must be paid.

                 

 

Machine tool suppliers face certain constraints. OEMs are driven by the volatility of your business:

  • Orders peaked in 1998, followed by a five-year recession that ended with a depression in mid-2003.
  • Many OEMs got lean, drastically cutting service headcount and reducing parts inventory to generate cash to survive.
  • Through August 2004, orders are up 38.4% year-to-date. Spare parts are needed for new machines, and parts suppliers to the OEMs are struggling to meet demand. Service engineers are needed for installations.

Your customers' demands for increased quantities and perfect deliveries run head-on into many OEMs' reduced ability to respond. Your shortage of skilled machinists means you are more dependent on the OEM for training and phone and field support. Just when you need all of your capacity to be operating perfectly, you find that barely adequate OEM support may have deteriorated into the unacceptable range.

At our company, we decided the only way to deliver the service necessary in today's environment was to bite the bullet make the necessary investment, hire a staff of service engineers, and keep them available 60/hr/week. Consequently, 97% of callers to our service department find themselves speaking to a live service engineer. At the same time, we appreciated that we had to invest in parts inventory. Today, we can ship almost all necessary repair parts on the day a problem is reported-from the Illinois shelf. This sort of response capability is expensive. Not all OEMs are willing-or able-to provide it.

Buyers have traditionally placed a high priority on quantitative machine specs and test cuts. In my experience, the success of any test cut and the relevance of the test cut to the selection process depend on the machine, the applications engineer, how representative the test cut is to the actual work that you will be doing on the machine, and luck. After a machine is introduced, software and technology, at least in our field--EDM--continue to evolve for a year or more. A newly introduced machine might have incredible intrinsic performance but limited technology at the time of the test cut. As a result, the test cut yields a somewhat fuzzy snapshot at a point in time that may not represent the typical performance of the machine on your floor for the next 10 years.

Good long-term customer support, in contrast, is cultural, a representation of the company's values. In a large OEM it takes years to change a mediocre customer support network into a good one, and even longer to achieve greatness. Customer support by our company was strong in the 1970s, but deteriorated severely in the early/mid-1980s, largely due to the merger of Andrew (Minneapolis) and Charcoram (Hauppage, NY) into a new company, Charmilles Technologies Corporation, now based in Lincolnshire, IL.

We started to rebuild the organization in the late 1980s. It took until the late 1990s to reach today's customer-support levels. We succeeded by working through certain tasks every year:

  • Survey all users. Learn from them what works and what must be fixed.
  • Personally visit hundreds of users every year to hear first-hand of the successes and failures of products and support systems.
  • Prioritize the changes to be made.
  • Measure performance on the highest-priority factors.
  • Fix the highest priorities.
  • Repeat the process the next year.
  • Continually add new measures to assure we satisfy more users.

You really need to pay attention to customer-support issues. Many buyers create spreadsheets that compare travels, weight capacities, test-cut results, price, and other parameters.

But think about the impact of customer support factors. Think of cases where you or other shops you know have been disappointed on some of these factors. For example, if you're not in a major industrial market, the cost for travel time and expenses for the nearest service engineer could vary from $1000 to $2000 when you compare OEMs. Recognizing this problem, at our company we decided to place 60 service engineers in 31 locations. As a result, we're able to say that 98% of visits to service our machines are local, and don't require expenditure for either airfare or car rental. Put whichever of these factors seem most important to you on your customer-support spreadsheet.

Perhaps the most telling indication of a suspect customer-support system will be when you ask the OEM for documented statistics on these or similar measures, and you find the statistics don't exist, are only rough estimates, or are not validated by ISO or similar auditing.

Hot problems and lingering problems represent different issues. Most OEMs naturally focus on fixing hot problems as soon as possible. But it's important that they also identify and resolve the lingering, annoying problems that can fester for months.

At our company, we provide a customer response form to our users on our Web site, with each newsletter we send out, and by e-mail before each installation. Submitted forms go to our ISO/Quality Manager, who ensures follow-up by as many departments as are needed. In 2003, from an installed base of 10,500 machines, we received 39 forms. Nine were customer problems, 30 were requests for information, and all were resolved.

So approach your purchase decision as follows: Yes, identify the models that will give you the accuracy and economics that you need. From this reduced list, select the OEM prepared to clearly document that it has the customer support system in place today--and for the future--to ensure that you can count on your machine performing to its specifications every day. Of course, the weighting of specs versus service depends on your application, location, labor rates, and other factors.

Certainly you must include price in your spreadsheet. Remember, however, that any incremental price for a machine that has top customer support will be paid only once. You will pay for the lack of customer support as long as you own the machine and when you sell it.

 

This article was first published in the December 2004 edition of Manufacturing Engineering magazine. 

 

When faced with such a fortunate dilemma, your optimal solution is to place a high priority on a range of key measures of customer support by the OEM or local factory-trained personnel. Doing so will optimize your long-term profitability, your credibility with your customers, and your peace-of-mind.       

 


Published Date : 12/1/2004

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