In an earlier blog we talked about pricing and asked whether our focus on price has become an obsession that is costing us in ways which are substantial but not always obvious.
One of those less-than-obvious but costly impacts can be the loss of partnership between vendor and purchaser. At TCA, our Statement of Core Values includes the statement that “We seek true partnerships that create value for all participants”. It is our conviction (supported by many years of experience) that a true partnership relationship between vendor and purchaser will produce the best result for both parties. This is not some namby-pamby arrangement where accountability is thrown to the wind; rather, obligations and commitments on both sides are fully recognized and diligently honored, but the spirit of a shared goal including the need for both sides to create value from the transaction underlies the relationship.
This is particularly true in an environment like the designing and building of custom manufacturing machinery and systems. The purchaser is spending large sums of money and will be depending on the equipment for extended periods of time. Also, the equipment will directly impact both his ability to serve his customer and his ability to be profitable. A supplier like TCA will also invest significant dollars not only in developing and maintaining the infrastructure and systems required to design, build, test and support custom automated production machinery, but also in the development of staff who remain technically and technologically current and who are capable of, and are encouraged to, think innovatively on behalf of our customers.
Of course, price is part of the value equation but where true partnership exists, there is confidence to “pursue creative solutions as a means of providing increased value to all stakeholders” (that’s how we define innovation at TCA) and there is confidence to “say what we mean and mean what we say” (that’s how we define integrity). Stakeholder value rises to the top in an environment of partnership because all parties are freed to focus on how we can be valuable (innovation) rather than how valuable we can be (pricing).
At TCA we have many customers who recognize the value of a purchaser/vendor partnership. Indeed, there are times when an outsider would be hard-pressed to know which staff on a project are from TCA and which are from our customer; this is exactly as it should be because we are all working toward the same goal. The benefits have been so readily recognizable and the level of trust so deep that a major manufacturer in business for over 50 years named us as their exclusive supplier of custom automated machinery.
It has been widely acknowledged that an adversarial relationship between labor and management will not work in the ‘new economy’. However, the relationship between purchaser and vendor can be just as adversarial if the focus on price is allowed to set the tone for everything that follows. A classic adversarial relationship was changed when Mikhail Gorbachev reportedly said to Ronald Reagan in 1987 “We have a secret weapon – we shall cease to be your enemy”. This changed relationship between the world’s superpowers allowed a huge redeployment of resources and facilitated previously unimaginable levels of partnership in areas like the space program. The move from protagonists to partners by purchasers and vendors can also redeploy strategic corporate resources and not only restore value that has been lost, but create value that has never been envisioned.