ROI

“I tell my suppliers to use you all the time.”  – Exact words from an engineer in charge of purchasing key components for a major automaker when he stopped by our booth at the International Elastomers Conference in Cleveland.

“Not all of them listen and there’s one I really wish would hear me. They tell me ‘there is no money for more software and testing’. But we use your software internally and we KNOW it can help them. This supplier has been working on a bushing for us for over a year and they still can’t hit our requirements.”

He went on to tell me how the supplier’s current design is not sufficiently evolved. How it is too risky. How it might compromise vehicle performance.  How he can’t take chances.  How he sure wished they would hear what he’s been saying because he really doesn’t want to pull their business and go to another source but he is running out of time. “I can’t wait much longer.”

“We could use your tools, but profits are measured in pennies. Rubber is a tough industry with low margins and high competition.”  – Exact words spoken probably 15 minutes later from an engineer with a major Tier 2 supplier. This fellow went on to lament how he just had equipment moved out of his facility to another division after losing a contract with a big customer.  “Corporate” decided the equipment would be better utilized elsewhere.  “It’s hard for us to bring in new technology unless our customers will pay for it.”

“Look at the ROI.” – Exact words from Endurica’s president as we were discussing these conversations after the show.  We give out 100 Grand bars at our booth to kick start this kind of conversation, but there is easily more than $100,000/year at stake.  Have you ever calculated your development costs? What if you had durability right the first time, every time? Here is a typical scenario – you can put in your own numbers.  This isn’t the only way to estimate the ROI.  You could also come at it like we did here, or here.