Making switches

The technical personnel at the large automation equipment supplier had built an enviable reputation in the marketplace helping machine builders throughout the land to develop some highly efficient, cost-effective industrial machinery.

Not only would the automation engineers from the company work closely with the machine builders to help them choose any number of programmable solutions from their extensive product portfolios, but the very same engineers would also be at hand to assist with installation and programming, as well as to ensure that the new machines would perform to requirement once commissioned at an end user’s site.

To the machine builders, it was a marriage made in heaven — the automation company’s team of engineers was always ready, willing and able to help them deploy the electronically programmable equipment they had purchased. It seemed as if nothing was too much trouble for them — no challenge too insurmountable; no goal too lofty.

Inevitably, many of the machine builders came to regard their supplier’s knowledge of the complex automation equipment as a valuable resource on which they could rely. So much so that some of them actually looked upon the automation specialists as a natural extension to their own limited engineering resources.

But sadly, holding the hands of the engineers at the small to medium-sized enterprises proved a very expensive, time-consuming business for the automation supplier. The profit to be made from the many man-hours spent supporting the needs of companies that were manufacturing one-offs, or limited numbers of machines, was simply not as great as the management at the automation supplier would have liked.

Inexorably then, over a number of years, the management of the automation supplier changed the focus of the business. And rather than continue to heavily invest in supporting the small to medium-sized machine builders, the company turned its attention to the needs of large, sophisticated end users — a market that the management believed would be far more lucrative in the long term.

Cunningly, the automation supplier made its moves so slowly that many of the smaller machine builders did not even notice that any changes were afoot. In fact, it took many of them several years to realise that the support they were receiving was not only diminishing, but becoming more expensive too.

As sad as it might seem for the machine builders, the move did pay off for the automation supplier, whose profits soared since it refocused its efforts towards the large end users and away from the less profitable machine builders.

But it’s not all bad news for the machine builders either. Realising that they are no longer the priority of the large automation equipment vendor, they too have switched their allegiances, teaming up with smaller alternative suppliers of automation equipment that are only too willing to support them in the way that their previous supplier used to in the past.

David Wilson

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