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A Purchasing Evolution

Alfred Spada

On p. 45 of this issue, our CEO Journal columnist, Dan Marcus, provides interesting insight into today’s casting buyer and the transition in philosophy that is occurring in how purchasing works with its suppliers.

“Two characteristics of this new generation are most interesting. First, it is remarkably neutral, almost indifferent, about the products it specifies and the suppliers it purchases from.… The second striking characteristic of this group is its highly collaborative nature.”

The belief is today’s buyers have evolved from being casting experts many years ago to the price-obsessed commodity managers of recent times to this new generation. While I am sure your facility still interacts with buyers from all three generations, the future might demand a different approach from your team, one that fits well with the strength of metalcasting.

Metal castings solve problems. We know this, but you haven’t been able to educate your customers enough on this point. You can create complex shapes. You can put metal where customers need it with the properties they need. You can remove that metal from areas they don’t need it. You can lower weights. You can reduce part counts. You can take advantage of rapid manufacturing techniques for short lead times, and you can use hard tooling for million piece runs.

These benefits allow you to be key contributors to collaborative designs when metal components are required because you offer the flexibility in one process that other metal component manufacturers require multiple processes to offer. The key is if metalcasting, as an industry, can be supportive of this collaboration and the education of the potential customer base.

The ultimate struggle for your business as you adapt to this new generation of purchasers is you still have to support the two previous generations as well as hybrids of all philosophies. Are you able to understand what motivates each and every customer and build individualized sales and customer service philosophies to specifically appeal to each customer’s motivation?

As Marcus discusses in his column, even with the changes in philosophy, this new generation of buyers is still focused on an end game.

“As the power of quality is diminished, it is delivery and price that are the last remaining differentiators between and among suppliers and producers.”

The key is to bring value to the table through collaboration so we change that notion of what price entails. Did you bring design assistance, assembly, machining and logistics to the partnership? Remember, the product you are delivering at a specified price must be an engineered metal component.