November 2021 Volume 3

OPERATIONS & MANAGEMENT

by offering to deliver or ‘kit’ them together to facilitate their presentation to the workstation. Beyond the material handling and administrative benefits, there can often be efficiency gains as well with proper part presentation provided by the supplier in how they package and transport the product. Once again, the price point must be mutually acceptable, and should consider all the potential benefits to the customer. It shouldn’t be an ‘apples to oranges’ comparison with the other supplier strictly on price. Forgers should also look at other technical and process capabilities that they presently possess for other opportunities. Selling available capacity of existing capability requires minimal investment. Even if additional capacity is required, it is often well worth the relatively modest investment necessary. For example, many forgers make their own tooling. Can this capability be translated to additional business opportunity? It may open the company up to entire new industries and customers that have not been considered in the past. Tool- making expertise is sought after by many companies in different industries. A forger can seize this opportunity, particularly if they can offer excellent quality and shorter lead times than existing tool suppliers. I have seen organizations in other industries, injection molding and extrusion to name two, do just this. Some have offered complete design-to-fabrication value propositions, others fabrication-only, others just tool maintenance and repair services. A tremendous opportunity may exist in front of your very eyes. What About Services? There are many, often creative opportunities to increase one’s value proposition in the form of services. Such opportunities often present themselves in the aforementioned customer discussions and walk throughs of their operations. Let’s explore several more commonly practiced ones starting with inventory management. This can take many forms from vendor managed inventory located at the customer’s site, to suppliers stocking customer product at their own facility or facilities to facilitate shorter lead time. Vendor managed ‘Pull/Kanban’ systems have been deployed within supply chains in many industries. The key here is access to the necessary data to properly set up the system, and timely information flow to effectively manage the systemover time.There can be real benefits of such systems to the customer and even the supplier. Some customers are so bad at inventory planning and scheduling, suppliers have found that taking on this responsibility for the customer has greatly simplified their lives (and businesses). Further, the financial benefit of true vendor managed inventory and supplier stocking services can be calculated in very real terms. Once again, this can be very handy when coming to mutually agreeable terms of this new arrangement. Transportation may be another opportunity to increase the value proposition to a customer. The form that this takes will depend on the circumstances: using third party logistics or company owned trucks. Companies with whom I have worked in the past have developed creative transportation solutions for their customers to develop win-win situations. Solutions here can be as straightforward as using methods that facilitate unloading product at the customer site in more timely and efficient ways. Others have offered their

company owned trucks to customers to transport other materials and products. Dreaded ‘dead heading’ of trailers returning empty from customer deliveries might be avoided if circumstances allow. In other cases, the supplier has arranged for ‘milk runs’ picking up and delivering materials within the supply chain. These and other scenarios can provide real benefits to customers and suppliers alike. An example that might be considered out of a company’s ‘wheelhouse’ involves the subject of continuous improvement. I have personally been involved in numerous efforts where suppliers aided customers to improve their processes (as well as the opposite scenario where customers helped suppliers do the same). While not typically a revenue generating service in the classic sense, both parties have shared in whatever financial gains were realized. The gains can be significant if the effort involved increasing customer throughput. Greater customer throughput means more business for the supplier. There were also situations where suppliers participated in customer efforts to design new products or re-design existing products. In the case of product design or re-design, participating suppliers would find themselves on the ‘ground floor’ of any business opportunities that may arise. More important, customers and suppliers developed stronger relationships through these collaborative efforts moving closer and closer to the ‘partnering’ ideal. Summary Maximizing a company’s value proposition should be an objective of any organization. But it must be approached in a careful way. Leveraging existing capability, even that which is not considered to be part of the company’s traditional business, is arguably the safest approach requiring the minimum amount of investment. The required expertise and possibly the equipment already exists in- house. This is not to say that more substantive investment for new capability should not be considered if the opportunity warrants. In all cases, it begins with the company recognizing a need that is not presently being served. Recognizing this in organizations with whom the company already has a relationship, existing customers, is probably the most sensible approach. It also can begin with self- reflection. A company should ask, ‘what are we really good at?” Look beyond physical capabilities to the knowledge and expertise that members of the organization collectively possess. This may lead to entirely new opportunities never before considered. With these suggestions in mind, how will you maximize your organization’s value proposition? ■ Drew Locher is managing director of

Change Management Associates and can be reached at drewlocher@comcast.net

FIA MAGAZINE | NOVEMBER 2021 45