Purchasing for Productivity

By January 22, 2013Assets and Fleet

When considering how to get the best value for your investment, where do you start, who do you listen to, where do you go for advice, what are your key considerations?  These are probably the same for most of us; price, value for money, specification, whole life costs, brand loyalty, dealer relationship, back-up when it all goes wrong, health and safety compliance, operator, manager, client input, longevity of product, residual value.  These are all key considerations, but how do you prioritise?

In a changing marketplace we need to look beyond the traditional way of purchasing and think latterly to improve our productivity by challenging old fashioned and out of date specifications and practices. Our employees and the machines they operate need to be more flexible if we are to keep costs down.

Where possible, look to move away from expensive “one trick ponies”. Are there any alternatives?  Look to agriculture and the continent for inspiration and innovation. In agriculture, the combine harvester is probably the most expensive machine a farmer will buy, but is there an alternative?  In our industry we have a similar dilemma with the likes of a dedicated 5-gang ride-on cylinder mower or batwing rotary.

Smarter working goes a long way to increasing productivity and efficiency, so we shouldn’t be afraid to try something new. Work with suppliers and manufacturers to develop new ideas and techniques in line with client, contract and economic demands. Don’t be afraid to challenge the norm.  For instance, why do tractors we buy have to have big wheels at the back and small wheels at the front? When did you last review your equipment replacement policy to reflect the changing environment?

If 2012 is anything to go by, the effects of climate change are here to stay along with budget constraints, meaning that new operational approaches are necessary.  Speak to your operators as their input is important in your replacement decisions, it is after all they who will make or break the machines you buy.

Involve all stakeholders in decision making, train for productivity and consider paying more initially and keeping longer. In the search for increased productivity take care not to compromise safety. Low priced equipment may seem a bargain but consider vibration, noise and general compliance.  Safety equipment should be specified standard and not as a cost saving option.

Where possible, always try to use the local supplier; national accounts are all well and good, but the local dealer is still a key part of the process – use them or lose them.

It may suit some organisations to deal with a limited number of suppliers but increasingly we are seeing small dealers being taken over by larger organisations.   I feel that this is not necessarily the way forward as local dealers have a lot to offer, but do appreciate that our economic climate is pushing towards more economy of scale.

Finally don’t just specify equipment for today, think ahead and build in flexibility and longevity into your purchasing decision, what versatility and flexibility do you get with your existing fleet, have a look in your shed or depot at the machines with the layer of dust on them and the low hours, how much are they costing you?

Angus Lindsay

Angus

Group Head of Assets and Fleet