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What is the proceedure in your corporation for deciding on large purchases ?

Milacron

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Dec 15, 2000
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Like CNC machines in mid size to larger companies.... purchasing agent with initial input from machinists ?....collaboration with programmers for control choices ? CEO ? That sort of thing. Wondering if a common thread to this or everyone is a little different.
 
Currently at a small shop less than 20 people. Owner and plant manager have discussion if/when to upgrade, then they get me to look ever options and such. Just bought a new VF2ss and 2 more on the way. I take care of tooling, vises, cutters, etc. I make lists and give to office manager and she does the actual ordering. No real oversight on that thank god. Nice to just get what you need.

When I was at mega corp a machine purchase would be months of back and forth with multiple purchasing people involved, then run up to somewhere around VP level for final approval. Usually involved a lengthy report on ROI,, depreciation, what if work goes away, backup plans, alternative options, etc.
 
Thats simple .....all the involved parties were asked to investigate the different alternatives and write reports......in the meantime ,the boss would be negotiating with salesmen for the biggest cash backhander,and when the limit was reached ,that was the machine bought.....however shoddy ,overpriced or unsuitable......Oddly enough ,when I was in the govt ,the same procedure was followed there too ,with some central office higher up the beneficiary.....this is how a hospital recieved 10 commercial floor cleaning machines that were as loud as jet engines...worked great in a empty office,not so great in a hospital.
 
At one of my customers, which is a part of Reliance Steel Corp, the plant manager can order yearly rentals of forklifts and such "day to day" items. But when it comes to larger purchases, it goes back and forth from sales to plant manager to purchasing to VP back to PM, argue with sales on what is really being sold and then meeting with VP, then told to wait, then have sales cry there is no more capacity, then leverage PM for more capacity with no more machines, then PM crys to VP as men are overworked, then back to sales to find out if it is worth it. Then see if your plant does well considering the rest of the plants in US. If you are going great, deny purchase. Of your doing ok, deny purchase. If your not doing as good as you should, consider purchase for a plant who doesn't need it. Then PM delays deliveries just to show overworked, then sales cries to VP that we aren't getting enough sent out on time. Then the order finally goes through for a new machine.

This has basically been the same way for 2 purchases now.

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In my corporation it is me. In a much bigger corporation I had very little voice.
In a very big company some is the ability for trades to know or work with the machine and control.
This can be a very big plus or minus, one has to keep the machine running and have spare parts on hand.
PAs do not have much say, more engineering staff but these guys generally do not want new or unknown problems to solve down the road.
Smaller do not stock replacement parts and are much more willing to take a risk. Also at smaller the PA and price become more of the deal.

I am quite sure that if selling a machine to Ox's corporation he makes all the calls. If you sell a single machine tool to GM I doubt Mary will ever know who you are.
For give me for dumb but given who has asked it I find this question confusing,
Bob
 
Like CNC machines in mid size to larger companies.... purchasing agent with initial input from machinists ?....collaboration with programmers for control choices ? CEO ? That sort of thing. Wondering if a common thread to this or everyone is a little different.

The decision on capital goods / means of production, is ultimately that of owner-manager, be that large or small, privately held, or body Corporate, any size.

The wise ones ALWAYS have input from team members and end users, shop floor upward, "one way or another". Plant Manager / Manufacturing Manager's job. Has to sell it to Finance. That could be husband convincing wife. On up.

The differences come down to how far down the chain decisions are delegated, how much b****y paperwork, meetings, overhead AKA "parasitic drag", and time is wasted.

The best and most successul entities are never NOT "situationally aware". They have their research and homework being constantly refreshed, know the quality of the judgement of their whole team, key players foremost, do not need much time at all.

That's how they got to BE "best and most successful".

By making better decisions. Faster. At lower cost. Consistently. Often.

Even if their product or service is NOT "the best deal!"


Whom did we "sell to?"

Tier ONE: Decision makers.

Tier TWO: Decision influencers.

There is no "Tier THREE"

How many steering wheels do you find in a motor bus?
 
Request every yr average or 4-6 months depends on how critical item / machine is to production.

Budget forecast 5 yrs of tea leaves

If approved .....3 yr wait.....obsolete by then, but I’m not paying the bills....

Minimum of (3) quotes.

And then some dipshit goes and purchases the cheapest item / machine / or they drag it out And it’s not in stock anymore.

Or bureaucratic excuses....for not purchasing said equipment

My favorite is we spent the money in a different department....

Last machine no Machineshop input.

Some manager let a sales rep and outside vendor talk them into it...

Then dumped it into my lap....
 
In the government ,if there is money left in the budget at EOFY,it must be spent immediately or lost...so it is spent on anything at all,when the budget is at zero ,more money is then demanded ,must be spent immediately ,so money can be taken from other budgets that are not at zero...However ,if any budget is overspent without authorization,then asses are kicked ......very delicate balance between ass kicked and giving big orders to your favourite salesman,for stuff his co. wants rid of.......Much generosity follows.
 
In my corporation it is me. In a much bigger corporation I had very little voice.
In a very big company some is the ability for trades to know or work with the machine and control.
This can be a very big plus or minus, one has to keep the machine running and have spare parts on hand.
PAs do not have much say, more engineering staff but these guys generally do not want new or unknown problems to solve down the road.
Smaller do not stock replacement parts and are much more willing to take a risk. Also at smaller the PA and price become more of the deal.

I am quite sure that if selling a machine to Ox's corporation he makes all the calls. If you sell a single machine tool to GM I doubt Mary will ever know who you are.
For give me for dumb but given who has asked it I find this question confusing,
Bob

I don't understand the confusion. Could go either/or/any way. I was a peon at mega corp, but it was basically my decision what machine to get as tehy had no one else knowing anything about cnc, but still had to go through all the upper management for approval, BUT they didn't change anything about what I wanted to purchase, just the whole approval process was 'excessive"....

We always joked that that place spent $1000 in labor hours for a $30 tool. :D

As I said before (I think in not so many words maybe?), I don't have any purchasing "experience" but this place runs the machine tools and such by me because

1) I've proven I know what I am doing
2)I've improved almost every program I have re-worked
3) I *think* (hope) I have proven I am a stand up guy and not going to purposely steer them wrong
 
Begins with 3 months of research by Rewt to determine 3 vendors for said tool and the capabilities of each, followed by Rewt going to meet with vendors. Then I supply them with the items I want cut/milled/turned/welded. I take them back to the plant and CMM them for a capability study. I gather technical quotes for the machine, installation, consumables. I write a tentative installation schedule after conferring with maintenance.

Then corporate goes and buys the shittiest one they can, and it sits underutilized and they wonder why the ROI hasn't been met yet.
 
Begins with 3 months of research by Rewt to determine 3 vendors for said tool and the capabilities of each, followed by Rewt going to meet with vendors. Then I supply them with the items I want cut/milled/turned/welded. I take them back to the plant and CMM them for a capability study. I gather technical quotes for the machine, installation, consumables. I write a tentative installation schedule after conferring with maintenance.

Then corporate goes and buys the shittiest one they can, and it sits underutilized and they wonder why the ROI hasn't been met yet.

Ya, I forgot about he 3 quote "rule". Had that at mega corp. BUT was sooo easy to manipulate. Quote from Haas, Makino, and Mazak.... hmm... LoL. Although our size did have some clout. Once we contacted someone about a large purchase the sales people tripped over themselves trying to sell to us. :soapbox:

But you are right, funny how some of these large operations have purchasing agents, accountants, legal teams, yada yada, but still made the *wrong* decision 75% of the time. :rolleyes5:
 
Looks like most of you are the decision makers or influencers in buying CNC for your companies. Where do you start your research and how much sway do in person sales people make in the decision ? Not necessarily because of their savvy sales talk... For example I've wondered why some companies end up with "off brand" machines like Litz when they could have bought Mazak...or YCM if on tighter budget. Was it often due to the past history with a distributor they trust, even with the 'new line' ?
 
Looks like most of you are the decision makers or influencers in buying CNC for your companies. Where do you start your research and how much sway do in person sales people make in the decision ?

Research starts on the internet, DUH. More specifically, here and youtube. But, more importantly, research is driven by application.
In person sales "sway"? ZERO! A big fat one. A good salesman will bring things to your attention you may not have already figured out though.
Control continuity is a huge factor. Big shop, your lead better know how to run everything. Not to many guys fluent in every brand control.
Programmers, how many posts do you really want to maintain? HR, how hard is it to find a Siemens guy in your area? Mazatrol?
And, finally support. Are you buying a Mazak when the closest dealer is 250 miles away, and any service call is going to be a $3k trip?
This topic could go on forever.
 
Looks like most of you are the decision makers or influencers in buying CNC for your companies. Where do you start your research and how much sway do in person sales people make in the decision ? Not necessarily because of their savvy sales talk... For example I've wondered why some companies end up with "off brand" machines like Litz when they could have bought Mazak...or YCM if on tighter budget. Was it often due to the past history with a distributor they trust, even with the 'new line' ?

I start my research using very general searches on the web, to find out exactly who makes what I'm looking for. Once I have a list, I reach out to my many contacts for someone who is currently using the technology I'm looking at. Usually go to see them and that piece of equipment, take copious notes on pros/cons. Sometimes I can't find a current user of a brand, but that's rare.

After that I get ALL the specs of the machine and do some comparisons by looking at what job profile I'm going to ask the machine to do. By the time I talk to a salesman, I likely know the answer to every question I'm going to ask. My goal then is to see if (1)The sales guys knows his stuff, and (2) If he's going to feed me a line of shit. Tells me if the company takes the time to train the people that represent them to customers.

After that I tweak one to make it look better (the one I think is best), not technically lying (whether by commission or omission), calculate the time frames and costs. Then I tie up three or more proposals with a nice little bow and pass it on.

You seem more interested in sales people's influence. I'll say a salesman can't make the sale to me, however, he can most certainly tank it.
 
Like CNC machines in mid size to larger companies.... purchasing agent with initial input from machinists ?....collaboration with programmers for control choices ? CEO ? That sort of thing. Wondering if a common thread to this or everyone is a little different.

Well Don,,,,, I'm guessing things have changed since we were at Continental when we just had to tell Erich we wanted a new machine and it just appeared.

Seems nowadays it's all politics and whos lining the pockets of purchasing dept.
 
Oh, and by large purchase I mean to the tune of 65 million, just for the record. i didn't get any say in that one LoL. :D Hell, I think they did the opposite of everything I suggested, I'm just the lowly machinist expected to "make it happen". :rolleyes5:
 
Typically I get brought in after the decision that "something needs to be done". Some things are different depending on whether this is a replacement for old equipment or an addition. An engineer gets assigned to the project and he / she pulls production documentation on what is currently going through that machine and/or what will be going through the new machine. Then they spend a little time on the floor to see what is actually happening on a daily basis with the current machine or process and talk with the people who will be affected. We try to identify what "sucks" about the current process. Can we improve quality, price, ergonomics, work flow, maintenance with the new machine. Its always a good time to rethink the current process and look for some unintended gains that we can make. Then I get involved (programming / set up). Discuss what engineer saw and try to sketch out a "scope" for the project. We discuss what we know is available in the market place and then try to research other options by calling a couple of machine reps we have relationships with and have them give a presentation if needed.

Obviously replacing a 2 axis lathe with another 2 axis lathe will abreviate the process.....but replacing a 2 axis lathe with a multi axis 2 spindle turn/mill will take a lot more work.
 
Where I work they typically request advice from experienced users, catalog the info and throw it in the trash. Then they will pick someone who saw a sales flyer one time that has cool fonts and buzz words. They often seek out the least value they can get for the highest price point.

…wish I were joking.
 
Where I work they typically request advice from experienced users, catalog the info and throw it in the trash. Then they will pick someone who saw a sales flyer one time that has cool fonts and buzz words. They often seek out the least value they can get for the highest price point.

…wish I were joking.

Oh man oh man you are absolutely correct. My job at mega corp put a former "director of entertainment" (shit you not, he even told us that is what he did!) in charge of that 65 million$ project overseas. Let me count the ways...

bought NX so everyone was on the same system (smart) but then acquired a Mazatrol shop here in the US that did 90% of their programming with Mazatrol at the machine (dumb)

underquoted EVERYTHING, if it is still afloat I'm sure they are hemorraging money

also, the *top* lathe guy at the acquired shop didn't know what an insert drill was :rolleyes5: and on and on
 
......
Seems nowadays it's all politics and whos lining the pockets of purchasing dept.

No. Please, please tell me these days are gone.
Valenite would give the PA a sailboat for Christmas and I just did a 1/2 gallon of top end whiskey.
Add the going ons at IMTS suites and worse.

I helped a friend climb up the ladder in the commodity management world.
He came to me with "Bob, I'm getting side offers that just do not sit right with me, It makes me feel dirty but they have a good product, What to do?"
Bob
 








 
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