Add financial oomph to your designs

Nov. 1, 2009
Engineers, scientists, and technical people are subject to stereotypes. Super-smart, hard worker, and problem solver stand out as positive labels, while

Engineers, scientists, and technical people are subject to stereotypes. Super-smart, hard worker, and problem solver stand out as positive labels, while less flattering terms like propeller head, techno-geek, and engin-nerd are also heard. Before you roll your eyes, I confess: I too am an engineer. Besides the stereotypes above, we have one more, and I believe it needs addressing, sooner rather than later.

Business managers believe we don't have strong business acumen. When we voice a need for a new controller, they wonder: Have we considered all the economic variables? Is there financial payback? Did we select a model with intriguing bells and whistles — just so we could play with the hardware? As a species, engineers are not viewed as strong proponents of solid, financially based business decisions. Stereotype? Perhaps. But that's our reputation.

The issue is exacerbated by a rise in power of the Chief Financial Officer (CFO). Recessions drive rapid shifts in business trends; one recent change is a meteoric rise in power for those sitting in “mahogany row.” By assuming power, CFOs and their teams have shifted capital and MRO buying trends. Recently, I spoke to a VP of engineering who shared that his “signature” buying authority had been reduced from $50,000 to $1,000. Purchases are now channeled through an advisory committee, prominently featuring the CFO's department.

For those of us involved in motion, this change requires that we improve communicating our project's value in language that CFOs understand. Value equals dollars, cents, dinero — money. Proposing a project with financial data attached improves your chances of approval. Developing a reputation as a person who understands technology and finance also enhances your chances of advancement.

One often-overlooked resource for value measurement is your local knowledge-based distributor. Early in the 1990s, many distributors realized that in order to survive, they had to differentiate themselves in the market. Knowledge-based distributors don't sell brown boxes with parts inside; they provide application expertise and advice. To prove their worth, distributors learned to carefully measure and document their value in that 5,000-year-old standard of measure — money.

Here's how it works: Distributors receive training on product features and on how to solve application problems. Then they work with customers to understand financial drivers. Cost of downtime, burdened labor rates, premature failure, and warranty are explored on a customer-specific basis. Next, knowledge-based distributors use their expertise and collected information to make recommendations. For example, if a motion sensor fails prematurely, they don't just ship a replacement. Instead, they investigate issues surrounding the breakdown and counsel the customer on all options. When a recommendation is followed, a monetary value is estimated for the improvement.

These distributors have developed expertise so that they can “guarantee” savings when involved in day-to-day operations. One such distributor with a 25-year history of documenting value is Power Transmission Distributor Association (PTDA) member Kaman Industrial Technologies. I recently spoke with Kaman's David Mayer about documenting savings.

“If all we were doing was looking for low-cost alternatives, savings would run out in a few years. Instead, we have customers to whom we've given savings advice for over 20 years,” says Mayer. Kaman divides work into 12 categories, including energy usage, life expectancy, maintenance time, and reduced need for spare parts. They report financial ramifications of their assistance back to the customer on a monthly, quarterly, or annual basis.

Many customers don't want a formal program, but Kaman's value-metric selling style remains the same for everyone. “We take this approach on even the smallest sale — even if it's ‘just a component,'” says Mayer.

Lesson to be learned? You bet. Motion system designers can depend on distributors for technical information and advice. Ask your local distributor if they measure value; you may just be able to include a bit of their financials in your system design next time.

PTDA offers free training

Knowledge is power in all areas, including motion control. That's why the Power Transmission Distributors Association (PTDA) is giving its members special access to a PT Interactive Online course of their choice at no cost to the member company. Courses combine the knowledge of the Power Transmission Handbook and the video and graphics of the Product Training DVD Series to deliver a multi-media, interactive product training experience. Structured as a series of 14 independent, product-specific lessons, these Web-based classes allow any employer to design a customized training program. Each course is two to three hours long and can be taken in any sequence. Using a multi-media format including text, graphics, video, and quizzes, the classes maximize comprehension of the materials by allowing students to learn at their own pace. The free course offer expires on December 31. For more information, visit

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