In Part 1 of my interview with Ernie Newell, vice president and general manager of Ossid, a division of Pro Mach, Ernie discussed how relationships with supply chain partners help packaging machine OEMs lower the overall lifecycle cost of a machine.
In Part 2 of this interview, Ernie and I discuss how packaging machine OEMs can work directly with customers to ensure lowest overall maintenance and operating costs. These two interviews in effect provide a 360 degree view of lowest total cost of ownership, both inputs and outputs, from the packaging machine OEM.
Steve: After a sale what can the OEM do to ensure lowest total cost of ownership?
Ernie: Training, spare parts, staying close to the machine and the customer, and product performance feedback from customers are all essential in the lifecycle cost mix.
Steve: You were telling me that Ossid does not make training a profit center.
Ernie: In terms of uptime and throughput of a new machine, the single most important thing we can help our customers with is training. Ossid makes training as easy and low cost as possible for our customers. We encourage every customer to send operators and maintenance personnel to our plant prior to the machine being installed. This means they focus on the machine. The training at our facility by our PMMI certified trainers is free with new machine purchases – the customer is responsible for travel expenses. Once the machine is installed and for older machines, we provide training at a low price which is simply aimed at covering associated costs. We recommend that training be ongoing, and we like to tie that in with regular maintenance visits.
Steve: How does the cost of replacement parts factor into lowest total cost of ownership?
Ernie: OEMs would rather have customers buy replacement parts from the factory. Some of this is profit center thinking. We recommend factory authorized parts because those parts last longer and don’t require nearly as much maintenance. To make factory parts more affordable, we offer stocking agreements that include regular machine inspections and tune ups along with the parts the customer receives. We are currently evaluating a two tiered parts program of lower cost and higher cost parts, recognizing that customers have different needs and situations. I’d rather have our customers come to us, and the expertise we can offer, rather than having them go out and find the cheapest part and eventually pay a lot more in repairs and upgrades.
Steve: Are the reports of field technicians factored back into design and development?
Ernie: Our field technicians bring in a constant stream of good ideas and observations that inform product direction. For example, we just launched a low cost add on to our overwrappers that can save an average of 375,000 gallons of water per year per machine. This innovation comes directly from customer feedback and the observations of our field technical teams. Feedback is particularly helpful on operator/machine interaction. Operators know what helps them and what they would like to see that would help them even more.
One of our big undertakings right now is a new horizontal form fill and seal line. We’re coming out with a solution that will lower the customer’s overall cost of ownership – from the initial purchase price to the efficiency and longevity of the machine. We will do this by simplifying the machine from a mechanical standpoint, doing away with unnecessary moving parts, eliminating parts, making it just as simple, clean, and efficient as we possibly can. And that comes from years of experience from our staff and from customer feedback. Customers were very involved with this program from well before prototype.
Steve: Are there any other programs you are working on that contribute to lowering maintenance and operating costs?
Ernie: For one of our customers, we are mentoring/advising maintenance and operation personnel as they refurbish several of our machines during the annual plant shutdown. The idea is that people learn best by doing. So we are advising and pitching in where necessary. From this particular customer, we’ve gotten feedback that our approach to regular maintenance and training has reduced downtime and generated greater efficiencies.
Steve: Do you feel that after sales service prolongs customer relationships?
Ernie: I definitely believe that our business is totally about customer relationships. We have a significant number of customers who’ve been with us since the start of Ossid. For example, we support machines that are more than 20 years old. We’d like to sell these customers new machines, but that’s not the point. The point is to strive to keep the machines running, the operators trained, and maintenance and operational costs low. Everything else follows from the emphasis on these things.