By Barry Heiser, Pro Mach in Cincinnati
Why would a machine builder venture into providing integrated systems? Why not? Our customers want to buy systems that reduce their risk and increase their efficiency. From our viewpoint, we realize benefits that make it worth the added risk of selling systems.
We sell stand-alone packaging machines as well as integrated systems for sections of packaging lines. We have 11 divisions that manufacture machinery for primary packaging and end-of-line packaging, as well as identification and tracking.
Primary packaging puts a product in a package or creates its primary packaging unit. End-of-line packaging prepares a packaged product for warehousing, shipment or display. Identification and tracking labels code and mark a product for decorative or tracking purposes.
Our largest markets are food, beverage and pharmaceutical companies; but we also serve a diverse range of Fortune 200 and smaller consumer and industrial goods companies.
A few years ago we made a strategic decision to offer integrated systems and subsystems that primarily consist of machines that we manufacture. Most of our integrated systems are for end-of-the-packaging-line applications such as case packing and sealing, labeling and identification, palletizing and stretch wrapping for secure warehousing and shipment. However, some of our larger systems also could include primary packaging and identification solutions such as check weighing systems, cappers and labelers.
The majority of our machine sales are individual machines, and that likely will continue to be the case. But we find that many customers, particularly those putting in a new line, prefer to buy an integrated system from a single supplier, rather than buy from multiple suppliers and integrate these machines into a system themselves.
Systems give our customers a single point of contact, reduced risk and improved packaging line performance. They also provide the shortest path to production since we do complete system integration and testing at our facility before installation.
A single point of contact means that customers dont have to work with multiple vendors to develop requirements, set performance expectations and coordinate production, delivery, installation and training. This saves time in the purchasing process, as well as in testing and installation.
Building and testing the entire system at our facility allows our customers to work through any issues with us prior to shipment.
As our customers concentrate on their respective core businesses, they no longer have the luxury of keeping in-house experts for projects that might only occur every few years. Buying integrated systems lets them transfer some of the risk of a large project to a company like ours.
A key to success with integrated systems is the trusted advisor relationships we build with our customers. Unlike single machine sales, system sales relationships are more consultative, more of a partnership, and usually involve people across multiple levels of the customers company.
We also believe that system sales give us an advantage on future projects over a competitor that supplies a single machine or component. The key is achieving or exceeding customer ROI and performance expectations, and we find this easier to accomplish when we provide the entire system. We also benefit from supplying ongoing aftermarket support, services and parts for multiple system components.
Our biggest risk is assuming complete responsibility for the system including delivery, installation and performance across all components and machines. Manufacturing all the machines in the systems we sell certainly helps us to control these risks.
The keys to successful systems that reward our customers with superior ROI and our company with good margins are strong project management, good quality control and stringent cost monitoring. Frequent and thorough communications with the customer along with strong systems engineering also are important.
We find that building high-quality, stand-alone equipment is often not enough of a differentiator and that system sales can set us apart as a preferred supplier.
Barry Heiser is president, end-of-line packaging, for Pro Mach in Cincinnati. Learn more about the company at promachinc.com.