Seize the Advantage

By Dan Hebert, PE, Senior Technical Editor

“Delivery time is always important," says Tom Kleeman, CEO at Spartanics (www.spartanics.com) in Rolling Meadows, Illinois. “On occasions, it seems that it's the only consideration."

A machine OEM's customers need fast delivery for a variety of reasons. "Our customers may have contractual obligations that put a lot of pressure to get equipment in place and in production in a timely basis," notes Kleeman. "In other cases, the customer has calculated a payback for the investment and is anxious to start the clock as soon as possible." Spartanics builds machines for the printing and converting industry ranging from standard counting equipment and press-feeding equipment to full-custom, laser-cutting systems. They are faced with a common OEM machine and robot builder problem—orders are off, and when they do come in, customers want the machine right now.

Likewise, Owens Design (www.owensdesign.com) in Fremont, California, builds automated manufacturing equipment for the semiconductor, hard disk drive and solar industries. The company designs 12-15 systems a year, most of which require short delivery times. Bob Fung, director of engineering at Owens doesn't quibble when it comes to fast deliveries. "We're not willing to commit to schedules we don't believe are achievable, and we've lost programs because of this," points out Fung. "In a number of cases, the customer selected a supplier because of lead time and came back to us much later since the machine that was delivered on time didn't work months later."

So, faster deliver can provide a competitive edge, but only if it's accompanied by high-quality and reliable machines. Here's how some OEMs meet those demands.

Fast Delivery Is Competitive Edge

NC Electronics (www.omniturn.com), a builder of Omniturn CNC machines in Port Orford, Oregon, achieves quicker build times by modifying its basic machine to meet custom requirements. "We build our machines to a certain point and leave flexibility for quick customization," says George Welch, Omniturn's CEO. "This keeps the cost down. We also try to use off-the-shelf automation from prior projects."

AEMK Systems (www.aemksystems.com) in Waterloo, Canada, does the same. AEMK specializes in high-speed, vision-based robotics systems for applications in the automation, assembly and packaging sectors. "Our DeltaBot technology was designed specifically with short lead times in mind," notes Rick de Jong, AEMK's general manager. "Our ability to minimize mechanical components, maximize resources due to inherent design features, and provide the correct talent in the indirect labor segment greatly accelerates build time."

However, if you don't have the luxury of modifying existing machines or aren't lucky enough to have no competition in your market, then you have to build custom machines on deadline and compete against other machine OEMs. "In today's business climate, quick delivery is important, not necessarily to get higher payment for the product, but simply to land the order," adds Welch.

Bob Sullivan, vice president at Saber Engineering (www.sabereng.com) in Auburn, California, agrees: "In 30% of the cases, delivery time is given the highest priority in awarding the project." Saber builds material-handling work cells in the electronics, solar and general manufacturing industries, including wafer robotic transport stations.

"Delivery lead time is often a significant factor in selecting a company to deliver a material-handling system," says Jeff Hanna, director of control and software development for Intelligrated (www.intelligrated.com) in Mason, Ohio. "It's not always clear that we'll receive a premium for fast delivery, but it's often a critical element in deciding who will get the order. In systems that do not offer unique material handling features or software differentiation, lead time will be an especially important factor."

AEMK Systems has a slightly different take. "It is possible that customers will pay more when market demand outweighs supply in a specific robotic category," observes de Jong. "But if you can't meet delivery times, then customers will desert you. In our current economic climate, available supplies are still greater than demand, and buying decisions are less likely to be made on delivery times and more on price and technical performance."

Kleeman of Spartanics sums it up: "If you can beat the competition on delivery you can command a higher price. While not a common occurrence, we have lost orders based solely on lead time. We have also received orders based only on our ability to deliver."

Short Lead Times Increase Risk

When building a custom machine for fast delivery, something usually has to give such as features, testing or quality. And it usually costs more to build fast. "Often we have to write software with incomplete or not fully tested hardware," notes Fung. "Material is selected to minimize design, build, integration and test time—sometimes at a much higher cost."

De Jong adds, "In general it costs more to cut time to market because you need to increase resources to meet shorter deliveries. Additional costs can be quantified in increased labor rates due to overtime pay, additional outsourcing due to inadequate labor resources, and potential increases in supply-chain cost to accelerate deliveries of raw components."

Also, even if you can charge your customer a premium, it might not be worth it. "The larger factor could be risk," explains Hanna. "Despite the product strategy and type of sophisticated tools we use, risk increases because the time to test the systems often is reduced to meet schedules. The added costs can be quantified, but the risk is much harder to quantify."