4 Ways to Better Leverage Your OEM Relationships

Construction companies are often advised to not get too cozy with suppliers. Doing so can cause key employees to lose objectivity, along with their ability to negotiate for better prices and programs. While there is a lot of truth to that, businesses can still build strong, reciprocal relationships with their suppliers. Some basic rules of engagement just need to be in place.

“Building a professional relationship is kind of like building a bridge,” says Matthew Haven, president of Telsmith Inc., a manufacturer of crushing equipment, vibrating equipment and portable plants for the mining and aggregate industries. “Building a bridge takes time, and you have to know where to start.”

According to Haven, who was a featured speaker at CONEXPO-CON/AGG 2017, the first step to building that bridge is working collaboratively to define the rules of engagement. “Understand what your supplier is comfortable with, and what your company is comfortable with,” Haven says. “Have a meeting of the minds so you can come up with a clear distinction of what those rules of engagement will be.”

With the rules of engagement in hand—and in writing—other team members can be trained on what those rules are. Then the professional relationship can begin to move forward based on mutual trust and respect throughout both organizations.

Not all companies and suppliers will be a good fit for building a collaborative relationship. A good indicator is to see how well the two company’s core values match up. For example, Telsmith’s parent company, Astec, subscribes to the following core values:

  • Continuous devotion to meeting customer needs, which includes a willingness to get involved in their business to provide the right solutions and help them make more money
  • Honesty and integrity in all aspects of business
  • Respect for all individuals
  • Preserving the entrepreneurial spirit
  • Safety, profit and growth as a means to ensure long-term success

With those core values in mind, Telsmith has recognized an opportunity as an OEM to work with its customers in a variety of ways. Perhaps other construction companies can seek out the same opportunities with some of their suppliers.

Partner with Your OEM on Technology

Construction companies can help OEMs develop new products. Valuable end-user feedback can often lead to everything from breakthrough innovations to simple tweaks, each of which can help companies increase safety, improve productivity and make more money.

In response to customer needs, customer-centric OEMs often partner with other manufacturers and technology providers to help bring new products to fruition. For example, Telsmith offers a product called the TRAC10, an automated crusher control system. Telsmith partnered with two automation companies, B&R Industrial Automation and IFM, in the development of that product.

On the topic of new products and technologies, OEMs and their end-user customers can work together on the development of industry white papers. Doing so helps elevate the participating companies as thought leaders in the industry. This is another initiative commonly undertaken by Telsmith.

Partner with Your OEM on Process Improvements

Construction companies can invite suppliers to help find ways to improve processes and drive operational efficiency. This should be of great interest to an OEM, which is in the business of helping customers solve problems.

For example, Telsmith worked with Tri-Con Materials, an Illinois-based aggregate producer, to help streamline its entire processing plant. Tri-Con’s product consistency had been varying. Additionally, the company was experiencing frequent wear part changes, which was adversely affecting both operating costs and employee morale due to the labor involved with the part changes.

After working in collaboration with Tri-Con personnel and proposing several ideas, Telsmith came up with a new crushing circuit. “It wasn’t a great significant change, but we got rid of two crushers and put one in there,” Haven says.

Telsmith also looked at how Tri-Con was managing material to and from the crusher. “We were able to apply some automation techniques to maximize production, as well as protect the investment they’d put into the crusher,” Haven says. For example, automation was deployed to help protect cones from overloads, monitor liner life, and simplify calibration to ensure a more consistent, cost-effective product.

After the plant and process improvements were complete, Tri-Con experienced a 72 percent reduction in crusher wear part costs, in addition to a 96 percent reduction in labor associated with crusher wear parts. The combined savings was roughly 36 cents per ton. “This represented a significant improvement to this company’s bottom line, simply by upgrading a couple of products and changing the circuit around,” Haven says.

Partner with Your OEM on Product Lifecycle Improvements

OEMs can leverage their customers’ operational data. “Then we can come up with a better process and collective output from the customer standpoint to give customers what they are looking for at the best price,” Haven says. “That helps OEMs avoid giving customers something they don’t need and shouldn’t be paying for.”

To that point, Haven says end customers should always feel empowered to call an OEM support team when they have equipment health questions. “This helps us (OEMs) get the information we need to figure out how to design equipment for maximum uptime,” Haven says.

In the aggregate industry, plant reviews help ensure that equipment is operating within proper guidelines and isn’t misapplied. “Roughly 60 percent of our service calls are due to machines not being applied correctly,” Haven relates. “We try to educate our customers and allow them to troubleshoot these types of things on their own.”

Partner with Your OEM on Business Insights

A construction company can partner with OEMs by discussing all aspects of its business and the things that keep executives up at night. “Don’t be afraid to involve some of your suppliers in some of your brainstorming and problem-solving, especially when it comes to operational issues,” Haven advises.

At the end of the day, a supplier’s success hinges on the success of its customers. By collaboratively establishing some rules of engagement, construction companies and OEMs can build an ethical, mutually beneficial relationship that allows both parties to prosper.

Want More Information?

CONEXPO-CON/AGG’s comprehensive Education Program is the leading source for contractors, business owners, construction material producers and end users to obtain cutting-edge information for today’s challenging economy and business model.

For those unable to attend the education sessions or who would like a copy of what was presented, recordings are available for purchase on a USB drive. There are over 130+ unique sessions from all ten education tracks: Aggregates, Asphalt, Concrete, Earthmoving & Site Development, Cranes, Rigging & Aerial Lift, Safety & Regulation, Technology, Equipment Management & Maintenance, Management: Business Best Practices and Management: Workforce Development.

For more information and to purchase education program recordings, visit http://www.conexpoconagg.com/visit/education/.




Related Articles