An accurate projection of the savings to be gained from a
capital investment can be an extremely valuable tool when
negotiating with the vendor. Suppose
that the equipment or technology
under consideration fails to meet the
required ROI. In that case, the buyer
could identify a lower price that
would keep the equipment or technology as a viable option. If there is
no price flexibility, then the buyer
could require the vendor to make
modifications to the equipment to
compensate for the ROI shortfall.
BENEFITS FOR BOTH SIDES
An engineered approach to evaluating equipment and technology has
benefits for both buyer and supplier.
For distribution executives, having a
realistic sense of the expected savings
from a capital investment not only assists in decision making but can also provide substantial support for the business case required to secure investment funds. Moreover, it
can provide valuable information for price negotiations.
Equally important, it provides fact-based information that
is specific to a particular operation—something that will
help buyers avoid making poor capital investment decisions
that could disrupt operations and
negatively impact an organization’s
performance.
For vendors, the use of an engineered approach can improve the
accuracy of ROI projections and
increase their confidence that customers will be satisfied with the
results of an implementation. Finally,
this approach can help vendors identify potential problems and unique
environmental characteristics before a
technology or piece of equipment has
been completely installed, providing
the opportunity to customize or adapt
the product while improving the odds
of a win-win situation for both vendor and customer. ;
Editor’s note: Aaron Lininger is an industrial engineer and
project manager for the consulting firm West Monroe
Partners.
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Forklift Battery Management Software
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