The psycology of sales

Either help me understand this or at least humor me on it.

Good machinists are hard to find.
Big dumb companies have idiots making scrap every day. The idiots work slow or not at all, take smoke breaks, read the paper, don't show up at the most critical times.

Guy calls BDC/SDC (big dumb company/ small dumb company) and tells them he's got a machine shop. Wants to do work for them.

Here's what BDC gets:
1. A trained, skilled, experienced machinist possibly in some cases far more skilled & experienced than a scary percentage of people BDC (or SDC) employs at their facility.

2. FULLY guaranteed work. BDC does not pay me to make parts over if I screw them up. I heard recently from a guy that works 50 hr weeks for a BDC and he's disgusted that he spent too much of a recent week (42-44 hours) doing parts over that were scrapped by idiot employees.

3. No peripheral costs. No comp, no insurance, no benefits, no OVERTIME, no holiday pay.
I DON'T TAKE SMOKE BREAKS....and if I did it still
wouldn't be added to the invoice.

4. The whole package including engineering suggestions,cad drawings,and sometimes free delivery.

And the part I don't get.......
Repeated games, delays and excuses when I make sales calls. First they're interested. They want "info" sent to them. Then they got the info, but didn't get a chance to look at it. Or....suddenly and contradictory to the last call, they
"don't have anything" right now. Try again in a few weeks.... on and on......

Why?
What's with the games and BS?
And the insider stories of scrap, hiring of idiots that can't read a scale or mics. Smashing of machines due to inexperience or incompetence.
I don't charge for repairs if I crash my machines.
Same places have CEO's and managers whining about
lack of skilled labor and need for training.

"Seems" like they'd jump up and down when a job shop called looking for work?
I don't get it......

The last company i worked at had complete inhouse manufacturing,electrical,electronics,mechanical and small manual machine shop.
I sat in on a year end meeting while the general manager was reviewing totals and couldn't believe my ears. He got to the machined parts category and blurted out "1.x million for parts, my god we'll have to do more inhouse". The purchasing manager explained that wasn't bad for a 9 million dollar company etc. but the cat was out of the bag. In his head he could do better in his manual shop where qty's were 20 to 50 pieces with total orders of over 1000 parts per run. They've struggled ever since blaming everything but themselves.

Understand it? Its never easy to understand things that defy logic.

I've held the opinion for a long time that this is one factor that's led to a lot of offshoring of machined parts. They believe no other domestic shop can do it at a reasonable price, and base that logic purely on the fact that they can't do it economically themselves. So yeah, they're just blown away when they see they can go to foreign sources and get the parts for half what it costs them to produce in house. Problem is, in a lot of instances they could've sourced the same parts locally at equivalent prices. They never gave that option any consideration though, because, in their minds, the only thing that could make their stuff cheaper is dirt cheap labor.

Anyone who survives long term in a small business (of any type) generally has one characteristic that's common among himself and his brethren. He knows when he's working smart and when he's working stupid. I spend way more time working stupid than I'd like, but at least I know when I'm in retard mode. OTOH, my experience in doing work for large outfits has taught me many of them have lots of people in well paid jobs who don't have a clue. Somebody runs 6 parts per hour on a station where 4 has been the norm, and he's a company celebrity, hoo-hah'ed for his 50% productivity increase. Problem is, its a part with a 5 minute cycle time, running one at a time, when 4 parts would easily fit on the table and 16 parts/hour is within easy reach. Going from 25% utilization to 38% might be a 50% increase, but, in the grand scheme of things, its about the same as picking Moe over Curly for your brain surgeon because Moe's soooo much smarter than Curly.

Many times though, there are people who see what's wrong just as MarkJB mentioned up above, but the corporate culture prevents their input from having any real impact. Chance are, the guy Mark mentioned stands a good chance of eventually sourcing parts offshore unnecessarily because of his own myopic view of things. Outside suppliers are too expensive. Case Closed. In-house costs for the same parts increase by 1/2 million. No need to revisit the possibility of local outsourcing since I've already boxed that option up and put it away. WOW, I find out we can source to China and save half a million. China here we come. Of course, I ignore things like lead times, reject rates, and other long distance factors which wipe out a fourth of the apparent savings. Net result... I see myself as a management genius, when the reality says I've gone backward at flank speed for a good while, and that my "solution" will never get us back to where we were prior to my own intervention.

IMO, the best potential job shop customer is one that doesn't use massive quantities of any single part, and who realizes (at the level where it can make a difference) they're getting eaten alive by their own inefficiency. They've figured out that assembly and packaging operations are much simpler to staff and much easier to control as compared to machining or other skilled trades where productivity is highly dependent on individual skill and initiative. Companies whose product demands are highly variable make better customers too, because that variation doesn't mesh well with 12,000 mile shipping and its associated leadtimes. I'm sure there are more, but I'm real familiar with 2 companies in this area whose management has largely given up on in-house machining due to productivity issues even though both have a good complement of late model CNC equipment. Both of them sub a lot of work within a 75 mile or so radius. Its somewhat tough to get in the door with either one because a batch of one bad component has the potential of shutting their assembly operations down, but in both cases they're just looking for good parts at decent prices, and not a truckload of documentation and paperwork. Good customers are out there, but it sure seems to me they're the exception rather than the norm.

Yea, as Mark is saying, allot of GMs just do not see the value in farming out work.

They may just figure they can pay several employees 10 or 15 an hour to make there parts and save money versus paying a job shop 50 or 60 and hour to make the same parts.

They do not take into account all the added value dkmc is talking about, and so they shrug off or lead on any job shop sales calls.

On the other side of the coin, not all companies would benefit from farming out work.
Some companies actually have great employees that turn out great work.........

On the other side of the coin, not all companies would benefit from farming out work.
Some companies actually have great employees that turn out great work.........

that have purchased the propper equipment for the parts that they run and allow the shop super to purchase the tooling that he thinks is gunna help him...

Think Snow Eh!
Ox

I'll agree with Ox, having the machine for the job and tooling it effectively can make or break any machining entity. Trying to make 20 pc runs on a 6 spindle makes as much sense as trying to make 200,000 pc runs on a turning center.... both have their niche.

Either help me understand this or at least humor me on it.

Good machinists are hard to find.
Big dumb companies have idiots making scrap every day. The idiots work slow or not at all, take smoke breaks, read the paper, don't show up at the most critical times.

Guy calls BDC/SDC (big dumb company/ small dumb company) and tells them he's got a machine shop. Wants to do work for them.

Click to expand...

You already nailed it here. BDC are just that--Big dumb companies--or shall I say corporations.

It would be the SMART thing (opposite of dumb mind you) to either fire the lazy azz employees or sub the work out to a compentent shop. Neither scenario is likely to happen, because they are Dumb.

What is likely to happen is they will sub out the work overseas because it is cheaper and parts is parts--right?. The overseas supplier PROMISED his parts would be every bit as good as ours. Again, Dumb. This is only exacerbated by the MBA's running the company.

Even if you were sucessful and made a few parts for the BDC, you are likely not to get paid for 3-4 months if at all. The bigger the company, the slower they pay their bills. Proof of this is all over this forum.

One other thing. Good machinists are hard to find--only if you are trying to offer them $15 an hour to leave their $35/hour job.

Our company does both. We have and do outsource work, but we do the majority in-house. I'm sure there would be certain benefits to outsourcing entirely, and our company being just engineering and sales.

But, we are absolutely love to machine and we'd like to be as good as some of the best job shops in America.

I know what DKMC is talking about... any time you run into embedded, entrenched, glory seeking, corporate mentality, you might as well be dealing with the Queen of Hearts. Logic and good sense is non-admissible. But, in the end, if they're not clever enough to choose a good shop, they are not going to be the kind of customer you want much of a rapport with, anyway.

I'll agree with Ox, having the machine for the job and tooling it effectively can make or break any machining entity.

Click to expand...

What if you have new equipment and good tooling but still have Moe the brain surgeon running the machines....Common place these days.

SO........
I WONDER if I could somehow write down my points in a diplomatic way that came across as educational and not condescending..........

........AND make it sound like it was MR or MIZ purchasing persons idea........

If I might be able to get thru to 1% of those people and DOO any good...

I wonder.....

You have a point DKMC, the best equipment and the best tooling but without the visionary/ independent free thinker/ crazy old coot/ smartass machinist that comes up with the innovative ideas to really make the parts fast won't be used to its potential. Its a tall order to come up with a sales pitch that would work on a tenured procurement analyst. However, you get their manager....and you might have a directive to quote you.

It can go the other way, too. I manage the shop in a small company, a 14 man shop. There was a time when the accounting method they used put all the overhead in the entire company on the shop when costing parts. In other words, when I bid a part the cost burden would include the entire customer service dept, accounting, HR, and so on. Imagine if you had to bid parts in your 14 man shop and had to take into consideration another 8-10 people in the office as overhead? They have since changed their ways, and I can better compete with you guys. I will get stacks of prints for a new product, sort through them, bid on the ones I think I can compete on, and tell purchasing to have the rest quoted outside. Like you guys, I win some and lose some. Much of the time, it's based on capacity or not having the best machine to do the job, and I know they will find one of you guys who do have it. These days, a lot of work is going to shops that have mill/turn machines like a Mazak Integrex. Our parts are close tolerance complex medical devices and are ideal for these machines. I just can't compete with them till I get a similar machine, which is unlikely because of the cost, 500k+.

Good luck to you all.

I work for BDC and I see alot of "intertia" As in a body at rest stays at rest.

There are a couple people trying to move things in a better direction but there is an overwhelming force from the shop floor to the CEO preventing it. Being "efficient" usually means doing more with less people and the people who would be most affected will dig their heels in and prevent any improvement. The ME pushes the salesmen to get us better inserts, and then the seniority guys run the same speeds and feeds they were running 30 years ago so the only thing that changes is we pay more for inserts.

I'm getting ready to run the same piece for the 3rd time in a week. Once, "someone"(I hate that guy) ordered the wrong revision. Then it was scrapped at milling. And there is an ID thread that I know is going to be wrong and I tell them over and over. The supervisors solution is to tell me to "make it loose". Even though we've been through this before so I know where this is going. It will get to the customer, they'll tell us it's wrong and the boss will tell me to make it "looser" GAH!

And even when they throw away 55 gallon drums of nearly finished parts, they still think they are saving money because they are no longer vending parts out.

The problem is, they have no REAL idea on what their TRUE costs are, so they can't tell if they are saving money or not. And since I'm near the bottom of the seniority list, I'm not about to help them!

Worked over 8 yrs with a SDM (small dumb manufacturer). 30 employees, at least 1/2 salaried, the rest union. 2 top level parogrammer/set-up/operate at top houlrly wage. The rest of the machinists were red/green button pushers. Then there's QC, testing, assembly and shipping/receiving. Many parts +/- .0001, but others +/- .005. I left in January after a 5 month notice. SDM has since hired 4 more salaried and zero machinists; now down to 1 top level hourly. They are backed-up worse than ever, and they still don't want to job stuff out.

SDM got burned by several job shops in the past. First run, the parts would be great. After that they got progressively worse. Alot of job shops are full of temps and those who don't care, because it's all about speed. Order in-parts out-maybe get a raise.

Funny thing, when SDM sends stuff out, they are less likely to accept a part that is not 100% to print in tol and finish. Same part out in same way made in-house would most likely to be used if not critical.

Point is, there are bad machinists everywhere. No logic in business.

You gotta find a way to make your pride and ability be noticed.

Have fun.

I once sold to a BDC, which is now out of business. I clearly recall one job that was a low volume, moderately complex part; we quoted at $700 per unit.

I was told "we can make that in-house for $250" even though I knew the material unit cost was $70 and the part required 3-4 hours of machine time.

No order for me and we surely did't want one at that price.

Epilog: BDC is long gone and it's retired sales manager has since told me that BDC found their manufacturing cost for that item was in excess of $750.

Mike

I think a lot of small and large manufacturing plants are operated on the assumption that the costs to keep the doors open are relatively fixed, month to month. Thus, way too many of these companies keep as much work in house as possible. Management thinks subcontracting more parts to job shops actually raises the monthly cash outflow, while machining the parts in house does not seemingly effect the "fixed" monthly costs.

With all the "smart" MBA's and such running manufacturing America, that true costs of plant operations should be known. Activity based costing assigns a cost to everything. But, it's just too easy for the bean counters to generalize overall costs and operate on the assumption that the factory runs on a relatively fixed cost over time. Allowing for inflation, of course.

IMO, too much of America is lazy in doing their job well. "Taking the easy way out", I always say. It's not just the factory workers trying to beat in their time, but all levels of the organization, up to the CEO. Very few companies really hustle.

The huge American and world market enable most manufacturers to suceed in spite of themselves.

Also guys, too many job shops out there do marginal quality work, at best. All it takes is one bad experience with a job shop, and a manufacturer will always be leary of ALL job shops.

Too many job shops worry about quantity over quality. Too many job shop owners are businessmen, not machinists. Too many job shops depend on marginal hired help to perform critical tasks.

Not me. I'm no businessman, even though I own a cnc job shop. I'm a degreed engineer who is proud to tell people I'm a machinist.

Greg

Wouldn't the first assumption be that the guy that you would/could sub it to is making enough on his price to cover all his fixed bills and likely puting ~some~ in his pocket. Then you can put whatever gross profits towards your bottom line?

I would like to think so....

The diff is IMO what equipment and expertice each place has.

We all have niche's that we excell at and kant be beat with a stick, yet other areas within our ranges we each may be way out there, but at least able to doo it as needed.

The catch is for each shop/factory to know their strong and weak points - and if they happen to find someone who's niche' is their weakness - it's a match! (I don't know if heaven would be involved in this story or not tho...)

If your lookin' to farm out prototype werk to the local production facility, you may not like their pricing. Git production numbers from the local prototype shop and the same can be said.

Others excell at (and have good supplier base for) tubing. Some are setup for bending it, others turning it. Yet another may excell at swedging...

Think Snow Eh!
Ox

Last year I was in a position where I was the only machinist/welder in a place who made its own products. Just about all the machining work was done outside at other shops. I pushed to bring it all in house as with all the proper CNC equipment and tooling I could have done about 95% of what got done outside. Machines would have been paid in the first year because last year... But they couldn't get the money, would take years, blah blah, or this or that. Then I realized, WTF AM I DOING? see, I thought yay I can work hard so others can make money.. then I thought, damn I can't try to take the work away from some of those other shops who need it. Then a bunch of things lined up for me and my business and I quit. Now theres no danger of them ever taking it in house

Truth is, although some shops do good work, there's also a lot of shops who do bad work. We used to have new shops stop by, we'd usually give them a try at least, if it wasn't up to it on quality we'd tell them what to improve and try again if they were willing. Not all places do that though. There was a couple who we did not bother with. Some of the parts were tricky and really nobody wanted to touch them, so when the guy says " oh looks easy I can do that on my 25 year old cnc " I think " yeah last guy who said that ruined 10K of material trying to make those. Delayed our production for 2 months, plus we had to use his crap parts since we couldn't reorder material on time and have someone else do it again, then our customer bitched about the ****ty assembly." Also times where half the batch is good and half is bad. Day shift/night shift...

So for some places it can be hard to go to new vendors. Some places only look at the dollar sign, a cheap part is a good part to them. I feel I'll be hitting into more of that in the next month or 2 as I'll be looking for a few new customers, or to diversify. Now I'm trying to make things closer to ISO, without having anything to do with it of course. Just the whole stickers on everything(still wondering about that one....) but just making things more appealing and showing that I keep track of stuff. I've also been trying to take pictures of certain things to show people.

I don't know sometimes. This week alone cost me more then I'll make in the next few months, but ah well, they'll be nice tools.

DKMC,

You're almost on the right track. The simple fact of the matter is that selling is a skill. Everybody has had a bad experience with a lousy salesman. So the natural incination is to think. "if that numbskull can be a salesman it must be easy". The fact is selling is very difficult. I would recommend that you read a few sales books or better yet get professional training.

You think you know what is important to the customer and you think that your solution is the obvious answer to his problems, yet you are not closing the deals. Selling is a process, and somewhere along the line you lost control of the process, and therefore lost the deal. Next time try selling using a process. I'll outline a simple system, but really there is a lot more to it and I can't stress enough how important it is to get real training.

Anyway, try these steps - Approach, interview, demonstrate, validate, negotiate, and close. Here's ow it might work;

Approach - You need to meet the customer. So you have to get an appointment and talk to him in person. All the old cliches apply here. You never get a second chance to make a first impression. you also need to make the customer feel that they can trust you. So be confident, use "open" body language, and pay attention to what they say. Look around his office and see if you have common ground. If he's got pictures of his kids around and you have kids, there you go; ask him about his kids. If he's got Bills team memorabilia and a go Bills sign, then talk Bills football. You get the idea, find an ice breaker, and find common ground.

Interview - This is a hugely important step. This is where you find out how to get the order. Ask open ended questions. Keep them positive. You have two ears and one mouth. Use them in that proportion. You might ask " what do you like about your current vendor?" Then If you could change one thing about them, what would it be?" Or ask, "What is your biggest competitive challenge?" TAKE NOTES and PAY ATTENTION! What you learn in this interview is what is important to your customer. DON"T ASSUME that you know their problems. You need to find out what the decision maker's problems are, then you are going to come up with a solution to those problems. You might think saving them money is the most important thing to them, but if you interview the customer and listen, you might find that his biggest problem is delivery times, inventory or quality issues. So if you run in there yapping about saving him money, he'll be sitting there thinking "I'll gladly pay more if I could get good parts when I need them."

Demonstrate - This step is where you prove to the customer that your head is more than a hat rack and that you've listened and understood what they told you in the interview step. So if the customer told you that on ime delivery was his biggest headache, then your pitch had better explain how you intend to meet his requirements. You should also provides recent examples of you abilities. You might say, "We have a 100% on time delivery record with the ABC company, the DEF company and the XYZ company." Don't prattle on about great things that you can do that your customer doen't care about. Just focus on what they told you they needed during the interview.

You don't have to present a solution right after the interview. You might need a few days to come up with a solution. So simply tell the customer that you would very much like to do business with him, but that you need to cogitate for a bit to figure out the best way to meet his needs. And that you would rather not have his business if you can't make them happy.

Validate - You can do this while you are demostrating and/or right after. What you do here is refer to your previously taken notes and repeat what the customer told you was important to them. So let's say it was on time delivery. You say, "You told me that on-time delivery was important to you." Do you agree that our ability to change over our machines in ten minutes will help meet your requirements?" Do you agree that our 100% on time record with the ABC comapny shows that we can deliver on time?" These questions should be softballs delivered in their own words where the ovious answer is yes. If you somehow get a "no", then you need to go back to the interview step and find out why.

Negotiate and close - Now that you have him saying "yes", you need to ask for the order. If they raise objections then you need to answer them. There are whole books written on how to deal with objections and dodges. Dealing with them is an art. Keep going back to the validation points and reiterate your demonstration. It is not unusual to have to ask for the order a dozen times. As they raise objections, you need to answer them, then ask for the order again. Which leads to another objection, and so on. If they bring an objection in out of left field, the you might have to interview him again to find out what has changed the priority. Then repeat the demontration step by addressing the new objection.

Like I said, this is an over simplification of the steps. So you need to study some or get a little training. The basic idea is that you can't assume to know what is important to the decision maker. You need to get it out of him, then demonstrate your ability to solve his problem. Validate your solution along the way using his own words. And don't forget to ask for the order. You HAVE to ask. Several times if need be.

Good luck.

Swiss:

I would recommend that you read a few sales books or better yet get professional training.

Click to expand...

Done that.
Better yet.....get a retired sales pro and let him do the job part time. Which is what I'm working on
right now.

I appreciate your outline of the process.
However, I think you have the wrong impression of
my situation. I've been in the job shop business since 1982. I guess I have some sales ability...
But I don't pretend to be an expert, and that's why I'm looking to learn all I need to to get the job done. I admit I'm a much better machinist than a sales guy.

Thanks again for the pointers....

dk

Have you tried the " here's what I offer, take it or leave it " type of way. One of those " you need me more then I need you " without wording it quite like that. Although it sounds backward, and possibly not true since you may need them. I think sometimes it may make some of those buyers think " oh he must be doing something real special... " just wondering if anyone goes about it that way. I'm thinking of trying it sometime with some places where I may really not need them, just to see the outcome.