The Total Solutions Partner–Vanity or Value Proposition?
03/01/2008
BY KAREN MOORE-WATTS, DEK International
The term “total cost of ownership” (TCO) has reached the point where it is a default catch-phrase for many business people. Over-use has robbed much of its meaning but, when analyzed correctly, it remains a valuable tool to help prioritize business decisions. The promise of savings in TCO has driven much of the progress towards modern, ultra-flat value chains. Surely, no further flattening remains to be done. A closer focus on the individual factors that make up TCO may help us, moving forward, to find new ways of addressing key aspects such as quality, speed of delivery, and customer value.
Currently, many vendors offer so-called “total solutions” to their customers’ needs. Analyzing individual elements of a true total solution provides a way of looking inside TCO, by highlighting cost aspects involved in acquiring expertise, problem solving, custom-optimization, and future-proofing. With regard to cost of acquisition; it is hardly stunning business acumen to understand that time and money invested in learning about a particular technology or set of tools are costs that must be recouped if the project as a whole is to be profitable. For the customer, buying-in a total solution to particularly difficult or specialized challenges should bypass most or all of these acquisition costs, as they can make up a significant part of TCO. Companies selling a total solutions approach know this, but how many of them are addressing those other aspects of the total solution and applying the principle in its broadest and most effective sense? The total solution, in fact, extends well beyond the main deliverable, and delivers value throughout service and support, custom development, and future innovations and partnerships. Without taking proper account of all these elements, the total solutions approach is in danger of becoming yet another catch phrase.
High-tech businesses need to work harder than most to put this into practice. It is easy to focus on solving the technological challenges and call the result a total solution. But what if the customer has slightly different requirements compared to the majority? A true total solution must be able to respond. And how can the customer adapt to the sheer pace of change in our industries, implementing ongoing improvements or enhancements to raise quality, increase capabilities, and reduce costs? Again, the total solution must provide answers.
To be a total solutions partner, a company must have several key elements in place. Proven technological foundations are a pre-requisite. These must be inherently flexible and scalable to support adaptation and enhancement going forward. Our company, for example, benefits from a history of meeting rapidly increasing demands from the SMT community, and has developed solutions enabling multi-purposing of platforms to host processes at wafer, substrate, encapsulant and board levels, as well as a variety of applications outside the electronics arena.
There is clearly a requirement for knowledge beyond the basic equipment or service being offered. Customers need and expect reliable assistance to get applications and processes up and running quickly, and to maintain them continuously. They also expect effective tools and techniques to set performance benchmarks and achieve improvements. In addition, total solutions providers must work to acquire knowledge of the demands coming from their customers’ own markets. This kind of knowledge has proved invaluable for addressing diverse and growing markets.
Further into the total solutions partnership, the customer needs higher levels of support to achieve more ambitious goals. As users and operators gain familiarity and seek to address more advanced challenges, there must be people, products, and solutions in place to meet those demands. The total solutions provider should strive to be at least one generation ahead of their customer base.
Finally, maintaining an up-to-date understanding of how customers’ markets are developing is essential to anticipate future needs and be able to deliver evolutionary products and services at the right time and a competitive price.
Having said all this, it is surprising how few companies actually understand what is involved in delivering a true total solutions service. Customers really do need to expect more, and ask potential suppliers how they will deliver on every one of these elements. Never has the need for the total solutions approach been more valuable or fundamentally necessary, to answer the specialized challenges that lie ahead for high-tech businesses. On the other hand, the consequences for customers who choose to engage with a less-than-total solution are becoming increasingly severe. AP
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KAREN MOORE-WATTS, global marcom director, may be contacted at DEK International, Granby Industrial Estate Weymouth, Dorset DT4 9TH UK; +44/ 1305 760760; e-mail: [email protected].