Supplier Convergence from Your Engine Provider
Supplier convergence; defined as a business model in which a company offers a combination of services or products that were previously supplied by separate companies. While this term is usually reserved for companies who merge to produce finished goods, the terms rings true on a smaller scale.
Why would you want more eggs in one basket? …When executed properly, both companies win. The OEM sees a cost decrease through decreased paperwork & labor, while gaining a more valued partner. The supplier gains better understanding of the needs of their customer, while making it more difficult for a competitor to sneak in and take over, thus a long-term customer.
What should you expect from a supplier convergence with your engine provider? In a word, VALUE. The word value coming from a salesperson often triggers an immediate thought that their price is higher than the competition, right? What value should mean is ease of doing your job.
Value in diesel engine suppliers can include added parts and services under one supplier versus multiple. A good value from an engine supplier might include a drop in solution package. Maybe your team doesn’t really want to mess with wiring, or maybe having a mounting plate or enclosure could be designed and built through an outside source.
Take the burden of engine related items that may be out of your area of expertise, off of your team and give it to your engine supplier. Best case scenario, you will find that your team is saving you money by keeping it in-house. Worst case, your engine supplier can save you time and money. That doesn’t sound so bad does it? Of course, you will need to go down that two way street we call trust. You should have a good idea of what the add-ons should cost and your supplier must have expertise in what they are offering to do.
Check the engine supplier’s experience on similar projects and speak to their whole team, not just the salesperson. Meet with their engineers and gauge their ability to do what they say. A tour of the supplier’s facility will also show their capacity and how they control inventory. Confidentiality agreements and non-disclosures are always a good precaution when opening up the higher level drawings to an outsider. An engine supplier needs to have a good understanding of how your machine works to become a superior partner.
When you receive an engine in your building today, does it come with anything other than an invoice? If not, maybe you’re missing out on some real value. Contact Wolter Power Systems today for more information!