BUYING MANUFACTURING EQUIPMENT: 4 big mistakes FMCGs make
1) Not engaging in-house operations and maintenance teams: In some FMCG companies, equipment is bought by the overall business head (aka MD or CEO or chairman). There is little or no recourse to the technical/maintenance teams who would actually operate and service the equipment. The result is equipment that is unsuited or under-suited for the manufacturing needs of the business as well as difficult or impossible maintain internally.
2) Relying solely on the advice of equipment makers and/or vendors in taking final purchase decisions: Rather than engage their troops, company leaders consult equipment manufacturers and/or vendors directly. This move is equivalent to consulting a mouse on where to store fish! A very wrong move.
Equipment manufacturers and vendors have only one goal in mind: selling their equipment. The chances that they would prioritize their short term interests (which is to close the sale) above their customer’s long term interests (which might be to not buy the equipment in question or to patronize a competitor) is just too high.
3) Not hiring an independent technical consultant: Rather than rely solely on the advice of equipment manufacturers and/or vendors, a serious FMCG company should hire an independent technical consultant (ITC).
The ideal ITC candidate should be one who has industry experience having either worked for equipment manufacturers and/or vendors or worked within the job function where the equipment is to be deployed (as an operator or repair & maintenance person).
4) Not hiring a 2nd independent technical consultant: One ITC is not enough sometimes.
"Why?"
For 2 reasons:
a) If the 1st ITC has experience as an equipment operator/technician, the 2nd ITC should be experienced in equipment manufacture/sales and vice versa.
b) The 1st ITC might be on the payroll of a particular set of equipment manufacturers or vendors. This would invariable taint the ITC's objectivity. Having a 2nd ITC would help address this concern. Even if both ITCs are on the payroll of the same people, their need to outcompete each other would unravel in favour of the buying company.
Final analysis
Buying equipment is a major business decision because of the upfront cost, running cost, effect on quality and consistency of product and, ultimately, the business’s performance.
This activity is laced with minefields: your in-house team could be on the payroll of equipment manufacturers/vendors; manufacturers and vendors might be trying to sell you a turkey rather than acting in your best interests; 1st and 2nd independent technical consultants could be on the payroll of various equipment manufacturers/vendors.
But one thing is for sure, consulting widely (your team, manufacturers, ITCs, competitors), at the same time, helps business managers unearth the best deal for the business based on cost and equipment performance over the long term.
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"Operations Management Specialist | Quality Assurance Expert | Biomedical Scientist"
5 年You are Knowledgeable...Keep it up Bro
Founder at Balbus UK ???? & Balbus Nigeria ????
5 年As a machine designer I agreed with your point no.1, but not totally with the other points. It makes sense to involve the front line staff members (machine operator, production team leader, maintenance staff and more ) in writing the technical specifications and conversations with machine supplier. It’s so important when you're buying a bespoke equipment and off the shelf kit to stick to this fundamental rule. With due respect, but most of the Nigerian consultants I have met till date aren’t up to the tasks. It’s frustrating for a machine designer to base his/her work on guessing (if and but). Some of these consultants never have technical specifications and how can a supplier be of any help? Though I must say that In all my 30+years as a special purpose machine designer I have never worked in Nigeria, but just in the UK, Italy, Germany and India. However, I was once privileged to supply a Nigerian customer and it was one of the eventful moment of my professional engineering journey till date. This gentleman was struggling with what was expected of his required equipment and he didn’t understand the importance of engaging his factory workers with me. I eventually found out that he was the oga patapata. Thanks for your write-up.
CEO @ Novus Agro
5 年Please drop a comment if you found this useful or if I missed out something important.