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Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

May 8, 2013

Keep Your Developing Project Alive & On Course With A Little Help From Industry Providers

Understanding When it’s OK for a Buyer to take Advantage of a Sellers Knowledge & Expertise

Holste Says:

A DC project that never gets off the ground is a lost opportunity for the company as well as all of the various industry related service and equipment providers, and, perhaps in the broader view, the supply chain in general loses an opportunity to become more efficient.
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It can take months or even years to champion even a modest DC project through all of the twists and turns on the road from initial idea stage to an approved and funded project. Unfortunately, for companies with limited resources, the serious amount of time involved can be discouraging and lead to termination of an otherwise good project.

To keep that from happening, it can be mutually beneficial to initially develop an informal working relationship with a potential equipment and/or system seller who is willing to share their concepting, design, engineering, and budget pricing expertise in an effort to move the project forward.

Materials handling manufacturers/integrators and large system distributors are the most likely to be interested in investing their time and resources. They often consider this kind of preliminary proposal development effort to be an essential part of the overall sales process much like other forms of marketing and promotion. Still, they have to be careful to properly qualify the buyer and avoid chasing after too many “rainbows”.

Material Handling equipment and system vendors have a substantial interest in getting viable projects through the approval process. By freely assisting in that process, the vendor is in a sense willing to gambling that it will have gained favor when it comes time to close the deal, at the same time knowing that this can take months, even years to play-out, eventually leading to a go/no-go decision. It’s a high stakes game as the project may never be approved, or in the end lost to a more aggressive competitor.

So, why would they consider providing free system design consultation? Because, it is in their best interest to support potential buyers, who have a viable project, by helping to keep that project alive and moving forward. In this way they are building confidence and gaining insight into the real needs and internal dynamics of the potential customer. And, (they hope) get some preferential treatment for their efforts when the vendor is finally chosen, or at the very least “win” the ties.

Independent consulting firms who are primarily in business to sell their expertise have no interest in providing free consultation. They would say “you get what you pay for”. Still, utilizing the services of a qualified vendor, especially one who has design-build experience, may be worth considering if funding for independent consulting is not currently available.

For the buyer this approach has both risks and rewards:

  The quality and validity of the vendor’s proposal will be based on questions they ask and answers the buyer provides. The buyer is responsible for the accuracy or their answers. The vendor will probably not spend much time, if any, probing for more detailed information, especially during the “preliminary design and budgeting proposal stage”. Therefore, there is some risk that your unsubstantiated assumptions will be treated as fact.

  The vendor may offer more than one proposed solution at different price points. While this is good, they will all be based on the application of equipment and services available in the vendor’s “tool box”, which may or may not be your best choice.


The vendor’s salesperson or account manager has a vested interest in seeing this through to a successful conclusion and will therefore be doing whatever is appropriate to promote the project, including setting up site visits to see the proposed equipment and/or similar systems in operation. This effort will keep the project alive even when the buyers focus may be diverted.

  Having gone through this process, the buyer will have gained insight and broader understand of their company’s specific operational issues and possible solutions. This, plus the concept drawings and budget proposal provided by the vendor, are very valuable building blocks regardless of whether you proceed with the project or not.

Hopefully, eventually your project will be approved. If at that point you have concerns relative to the solutions proposed by the vendor, you always have the option of hiring a consultant or industry expert to evaluate the vendor’s proposal and provide their independent opinion and alternatives. Further, depending on the complexity of the proposed solution, it may be advisable to obtain a computer generated graphic simulation to provide further “proof” of performance.

Final Thoughts

A DC project that never gets off the ground is a lost opportunity for the company as well as all of the various industry related service and equipment providers, and, perhaps in the broader view, the supply chain in general loses an opportunity to become more efficient.

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