WINTER 2020

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102 THE DISTRIBUTOR’S LINK LAURENCE CLAUS VALUE ENGINEERING ON NEW PARTS from page 8 I compiled a list of several cars and dealerships and off my wife and I went. The first stop was a dealer that represented the brand of automobile we were looking at and had several possibilities in their advertised inventory. When we got there we were assigned a salesman and began the process of shopping our options. To abridge what is actually a long and somewhat comical story, it was abundantly clear early on that this salesman had little to no knowledge of his product. After test driving one of the cars and failing to answer even my simplest inquiries he sat us down and told us we needed to speak with his manager. Soon a “slick” salesman type sidled up and began to ask us if we were prepared to buy the automobile. He also was unable to answer my questions and decided that what we really needed to do was purchase a different model of new vehicle from him instead. In addition to not meeting most of our needs or wants his recommendation was priced in a range that we told him we were not willing to spend. After much pressure and persuasion from the two of them on the merits of buying the other car we politely excused ourselves and left the dealership. Although at this point we were highly discouraged, we went to see the next car on my list. The dealer in this case represented a different brand of automobiles than the one we were looking at in their used car inventory. Once again we got connected with a sales person and took a test drive. To my delight, this sales woman really knew her stuff. Not only could she answer my questions about the automobile, but she also had some insight into its ownership background, which she shared and substantiated when we returned to the showroom. Needless to say, her expertise was a big selling point and one of the primary reasons that we stopped our search there and bought the car. Expertise and knowledge about your product is an exceptionally strong selling point and one that will help any distributor win more orders on new parts. A second advantage, very closely related to the above is that offering value engineering services is likely to elevate you above much of your competition. In other words, it provides a competitive advantage over the competition. A number of years ago I was contracted by a distributor to provide training to one of their customers. As I learned more about the assignment, I discovered that my client was the number two fastener supplier at this account. However, the number one supplier was simply an order taker and either unable or unwilling to provide engineering and educational resources to assist this customer. As a result my client decided to take advantage of this fact and I was just the beginning of a campaign to help them establish themselves as the knowledgeable, value added provider. At last follow-up, I believe they were doing pretty well on this and were the resource their customer would come to with almost all fastener related questions. Although I did not ask whether they had taken over the number one supplier position, I’m sure their value added approach was having a positive impact on their book of business with this customer. A third advantage to working on new parts is that often the customer is most willing and able to make changes at this stage of the process. As I discussed in part two of “Value Engineering on Existing Parts”, often times there is significant institutional inertia preventing adoption of any value added engineering on already existing parts. This hesitation to make changes is often, although not always, significantly reduced or not present prior to going into production. This makes the comparative resources spent on value engineering during new part development a better investment than on existing parts, as the payback is easier to achieve. The earlier in the development cycle that one can get involved the better and more likely the work will metastasize into a real order. Disadvantages Unfortunately there are also disadvantages to focusing value engineering attention on new parts. The knowledge advantage is actually a double edged sword. It is a strong advantage if you can show your expertise, but also a strong disadvantage if you don’t have expertise and experience and try to make it out like you do. Without experience and knowledge it is quite likely that you will miss low hanging fruit opportunities and underwhelm your customer. There is perhaps no bigger “sin against your customer” than to overpromise and under-deliver. CONTINUED ON PAGE 156

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