In business, it’s been said, “you need to spend money to make money.” This axiom certainly applies to capital investing, where market demands can be exploited with increased production through the careful implementation of new equipment.
One of the most important factors for a successful project is being able to specify the requirements up front. Many times, the customer doesn’t know exactly what he needs. More preliminary engineering is required to get the project requirements specific enough for suppliers to offer a fixed price bid for the project. But often, clients don’t realize they need to budget for this and therefore don’t want to pay for this service.
At Optimation we design and fabricate manufacturing systems for companies all over the United States and the world. To build this equipment, we use a lot of steel and stainless steel and lesser amounts of aluminum and exotic alloys. A couple months ago, the rules changed when getting prices for these commodity items. Many of our suppliers began to provide pricing which was good for only 24 hours. This reaction by our suppliers was created by threats of tariffs being placed on steel and aluminum.
Early in my career I learned about and then was tasked with writing capital appropriation requisitions and justifications. When dealing with vendors I often encountered specifications, and technical minutia that overwhelmed me with data that provided little helpful and useful information. Reqs and justifications require compelling, substantiated, and specific facts that define a positive business PROPOSITION meeting the criteria as set by company policy—payback period, breakeven, Return on Asset/Equity/Investment, etc. Today, as I read and write more of these, I am still encountering many examples that miss the mark.
We are a business that executes hundreds and hundreds of projects every year. These span the spectrum from simple to complex, urgent to critical, and small to large. As a vendor in industrial automation, we participate in these interactions as a supplier to prospective clients wishing to accomplish business goals. There are about as many ways to go about this as there are projects; however, there are certain parameters that yield more likely success more often. Let's look at them.
“We’ll take away your pain!”
That is one of our favorite tag lines here at Optimation. We have many customers that come to us with different problems, but the bottom line is they are experiencing “pain” of some type – facility shutdowns, short-staffed internal teams, looming capital improvement budget deadlines, custom testing requirements for safety and quality, and many more. We are here to take away that pain!
I guess it is time to say goodbye to summer and welcome in all that comes with autumn! It has been an amazing summer, but now the kids have gone back to school, the morning traffic has returned, it’s getting dark earlier, and it’s getting a little cool for a convertible or rolling all the windows down on the morning commute to work. All of these things signal the next season, not only in our personal lives, but in our work lives as well.
In recent past articles, we have enjoyed blogging about some of the aspects of how to successfully undertake and deliver capital projects. We have noted that a sound methodology to accomplish this can be found in a process we dubbed “Phases and Gates,” where the project work that streams from the customer’s initial project request for an installed and commissioned solution is divided up into manageable steps with predetermined decision points. Our content has talked about the need for Requirements, the benefits of Conceptual Design, and the case for Preliminary Engineering.
Sometimes it is not what you say, but how you say it. In the engineering services world, we live by requirements (what you say – or write). Sometimes we create the requirements for or with our clients, and other times we write a proposal in response to the requirements and define a project to meet them.