July 24th, 2007
Distributors are encouraged to “look beyond selling iron”
One of the themes stressed at the recent annual meeting of the American Machine Tool Distributors ‘Association (AMTDA) was developing new sources of revenue by providing customers with products and services that create value over and above the typical equipment transaction. For machine tool buyers, the distributor is likely to become a deeper, broader resource for manufacturing technology.
J. Michael Parks, a principle and managing partner of the Indian River Consulting Group, suggested ways in which members could leverage their core competencies to diversify their revenue streams. He noted the importance of anticipating “critical equipment events”–foreseeable circumstances when a buyer is likely to consider a capital equipment purchase.
This presentation was followed by a panel in which two members discussed their successful experiences with ventures that moved them beyond the traditional role of machine tool sales. For Clark Smith, president of Smith Machinery Co., the venture was partnering with an independent service organization to help buyers get more productivity from equipment purchases. For Michael Tierney, president of Morris TriState, this meant developing fee-based services offered at each of the five “value points” in the purchase cycle (plan, source, implement, operate and dispose). For example, to help buyers find sources for the appropriate technology, his company can facilitate the value stream mapping process, one of several lean manufacturing techniques in which Morris TriState is competent.