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(Company) size matters!

Finding a good match with partner companies may be as important as the commercial offer. Matching company sizes is part of the process. The following is a comment I posted in response to an article titled Can Small Vendors Play Big? at ControlDesign.com in November 2008

Find the best match!

I run one of those small vendors - a very, very small one compared to the billion-dollar giants. We win business away from the giants for two reasons:

Fat Cat
  1. A business relationship tends to work best if there is a reasonable size and culture match between partners, especially if it is a genuine "partnering" relationship. One of our small-company customers nearly went out of business because they had entrusted the manufacture of their key mechanical component to a major auto parts maker that went into Chapter 11 and simply lost interest in them.
  2. A smaller company can offer a level of service and personal attention that the big boys have no hope of matching.
    When a machine maker in Atlanta called our office in Melbourne, Australia, he got straight through to a company principal, a very seasoned engineer, who instantly understood his problem and proposed three possible solutions on the spot. If the customer had called a "biggie," chances are he would have had to work his way through several layers of salespeople and junior technicians and engineers before finding someone with the experience or caring to instantly understand his needs. We now make hundreds of controllers a year for that customer, and they outperform any off-the-shelf solution at about a fifth of the price.
  3. If there are reasonable quantities involved (for us a few hundred units is reasonable), we can custom-engineer a fully integrated solution that is way more cost-effective than a mash-up of off-the-shelf products. I know for certain that one billion-dollar controls company won't even let you bypass their distributors, let alone actually talk directly to a product designer, for fewer than 10,000 units.

OK, that's 3 reasons, not 2, but we often over-deliver :-).

That said, we do sometimes come up against the problem of a potential customer being obliged to use a Brand-X PLC. That used to upset me, but we now accept that is how the world works and that there are good reasons for some end users to standardize on a particular brand of PLC.

While we classify our target customers as OEMs rather than as machine builders, the distinction is somewhat blurred. Our customers make machines, albeit with a broad definition of "machine." The main difference is that we seek out customers who will be making multiple, identical copies, be it tens, hundreds or thousands. The level of support we provide would not be be viable for onesie-twosie business. I have been known to advise a prospective customer to use a regular PLC, especially if their background is with PLCs.

At the end of the day, or should I say at the start of the deal, buyers and vendors alike should give proper thought to finding good matches between products and needs, and between buyer and vendor. It's when the matching is poor that things go wrong.