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Making the SelectionA ceramic manufacturer of high quality products needed a significant increase in output, and more kiln capacity had to be purchased to achieve this goal. Since the project was “too important” to entrust the engineering group, it was placed in the hands of a vice president with good business skills but no particular technical skills. He spoke with a few of the technical people to develop a set of bid specifications—in terms of output and firing curves—and also researched the potential kiln suppliers that were available. Specifications were written, and suppliers were invited in to discuss their offerings. The presentations were attended by the vice president, and a few other people who had the time to attend. A number of trips were made to see the vendor’s factories, and field visits were made with each vendor to see representative equipment. Comparative spreadsheets were made to evaluate the features and content of each kiln, until the boss felt that he had a good perspective of the equipment offered. Although no price information was shared among vendors, unique features associated with a specific proposal were described to and requested by the other bidders. In many cases, suppliers were prompted with the contents of competitive proposals to make sure that the final offers would be “apples and apples.”
Overall, the process went smoothly; in four months, the vice president made a kiln selection. The decision was based primarily on price, since his process resulted in all suppliers quoting the same equipment with similar features. His final negotiation was very hard (after all, he was a businessman), and he achieved a good final price.
What Went Wrong?This scenario sounds okay, doesn’t it? So what happened? Well, for starters, since the boss did not form a knowledgeable team in the beginning of the project, the final product did not fit into the factory in any way, except for the fact that it was fully contained within the factory walls. But the important fit—seamless integration into the factory operation—did not, and could not happen.
When a ceramic manufacturer begins to look for a kiln, the kiln purchase should be achieved through a team effort. The team composition should include a kiln specialist, a ceramic engineer, a mechanical/electrical specialist, a quality assurance specialist, and finally, someone intimately familiar with the production floor operation and product flow. All of these people should have input as to what is important, as one person simply cannot have the range and depth of knowledge to make sure that the perfect solution is achieved.
In the example above, the boss committed a number of errors:
- He was the team, even though he had never operated, monitored, loaded or unloaded a kiln. His overall general knowledge was valuable, to be sure, but the details can make—or break—an important project, and the boss was unaware of many of those details.
- He didn’t talk to any of the vendors’ customers, aside from those he was directed to speak with by the vendors. References are crucial; it’s important to know how the kiln—and its manufacturer—performs over the long haul.
- By sharing the innovations of each vendor with others, he punished the most innovative bidders. Those less innovative received some good ideas to bring their bids up to the required level, at least on paper. However, innovative companies usually produce great results; those less innovative often survive by selling low cost products. There’s a big difference between having a good idea and knowing how to execute it well. Therefore, he ended up buying the low-cost system that was a poor copy of the innovative system.
- He did not realize that there are components common to all kilns. By specifying certain materials and hardware on the new kiln by brand, he could have minimized the spare parts necessary to support the new kiln.
- He negotiated hard on price, and ended up buying the kiln from a very compliant supplier. He didn’t realize that with the hundreds, or even thousands of discreet materials and components that make up a kiln, it is relatively simple to reduce cost at the expense of quality.
A kiln is a major investment that should last 15-20 years or more, yet all too often, the principal focus is cost. As the old saying goes, “The delight of low cost is long forgotten when the bitterness of poor quality arrives.”