Perhaps nowhere is the saying “time is money” more true than in the construction industry. There is no better indicator of project cost and budget over/underrun than the number of days on-site. Reducing that number has a near 1:1 relationship with cost cutting, so it’s no wonder that days on-site is the most watched project metric.
Further complicating matters, the construction industry is well-behind the 3D adoption curve, still relying primarily on 2D blueprints when most other manufacturers have long since moved to 3D CAD-CAM design and production systems, despite the obvious benefits of the application of 3D systems to the construction of 3D physical structures.
Stepping into this breach is Nancy Novak, Vice President of Operations for Balfour Beatty Construction services, a speaker at the IE Group’s Manufacturing Analytics Summit earlier this year. Nancy specializes in applying off-site manufacturing (OSM) techniques to large commercial and industrial projects – one of the most innovative process to recently emerge in this industry.
Or maybe I shouldn’t call it a process, as much as OSM’s intent is to productize the construction industry, to allow it to standardize and reap the benefits of common manufacturing techniques and processes that have been around for decades. The benefits of OSM include:
- Faster – Fewer days on-site with a more predictable schedule (i.e. lower cost)
- Safer – Less on-site labor, better site logistics
- Better quality, with a more predictable product
This is the story that Nancy brings to her potential clients. With each project, she explores with the construction team the possibilities for modular systems that can be assembled off-site and then integrated into the larger structure on-site, whole and in working order, such as bathrooms, kitchen facilities, elevators and staircases, office space, HVAC, interior and exterior walls, and even entire living suites for apartment complexes.
Perhaps the most surprising aspect of her work is how often the client informs her that she is the first person who ever proposed such an approach to them, how often she is the first person to suggest that they take a walk through a current project to assess what improvements might be able to be incorporated into the next one. Not so much management-by-walking-around as sales, or customer relationships, by walking around.
This is an easy lesson to apply to your own highly-competitive manufacturing business. Are you tired of the price wars? Are you looking for a differentiator other than features, functions and performance in a largely mature market? Are you interested in taking need-based, consultative selling to the next logical level? Then instead of making the focus of your next customer visit your own products and services, simply ask for the opportunity to walk around their business environment and ask “what if”?
Many your customers will of course have well-defined problems with straight forward solutions, where the the only obstacle is budget, but it’s more likely that their needs and problems are much more nebulous or even completely hidden. As Henry Ford once famously quipped, “If I had asked people what they wanted, they would have said faster horses.” Often they are looking for you to be the expert, or, as we often say here in the world of SAS analytics, “tell me something I don’t know”. To get to the answer, first you need the insight.
I couldn’t possibly list here all the insights you and your customer might uncover, but just to give you a flavor for the types of questions to ask:
- What can we do regarding custom packaging / logistics that would better suit how you use our product?
- What services might better be provided on-site or mid-stream rather than all before or after delivery?
- What if we could manufacture the product in multiple components (or singularly) for easier installation / service?
- What integration could we be doing with your other suppliers before our product ever gets to you?
If all goes well, this inevitably leads to a discussion around where BOTH parties are making changes to their products and processes to reduce the total overall cost and/or to otherwise make the total end product more competitive. Not just, “What can I do for you?”, but “What can we do together?” The proverbial yet rarely seen “win/win”. Getting to this level of conversation is the best differentiator you could ever have. You are no longer just a vendor, nor even a ‘strategic supplier’, but a real business partner. You are no longer competing on price against a dozen other contenders, but are now critical to making your client more competitive in THEIR market.
So what are you waiting for? Go for a walk – it will be good for you, … and your customer, …and their customer.
By Leo Sadovy, EPM Channel Contributor, from: http://blogs.sas.com/content/valuealley/2014/11/18/customer-relations-by-walking-around/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ValueAlley+%28Value+Alley%29
Leo Sadovy handles marketing for Performance Management at SAS, which includes the areas of budgeting, planning and forecasting, activity-based management, strategy management, and workforce analytics, and advocates for SAS’ best-in-class analytics capability into the office of finance across all industry sectors. Before joining SAS, he spent seven years as Vice-President of Finance for Business Operations for a North American division of Fujitsu, managing a team focused on commercial operations, customer and alliance partnerships, strategic planning, process management, and continuous improvement. During his 13-year tenure at Fujitsu, Leo developed and implemented the ROI model and processes used in all internal investment decisions—and also held senior management positions in finance and marketing.Prior to Fujitsu, Sadovy was with Digital Equipment Corporation for eight years in sales and financial management. He started his management career in laser optics fabrication for Spectra-Physics and later moved into a finance position at the General Dynamics F-16 fighter plant in Fort Worth, Texas.He has an MBA in Finance and a Bachelor’s degree in Marketing. He and his wife Ellen live in North Carolina with their three college-age children, and among his unique life experiences he can count a run for U.S. Congress and two singing performances at Carnegie Hall. See Leo’s articles on EPM Channel here.