Fluid Power Journal

Fluid Power Profitability – The Power of a Business Accelerator Model

Joe-woodsThere is untapped profitability to uncover for the design and engineering teams sizing up hydraulic and pneumatic sealing and bearing systems for specialized fluid power applications. This can be especially true for those development engineers who have a need for complex total sealing configurations, which often can be analogous with fluid power applications. In fact, we have devised a business accelerator model that gives a strategic perspective on people, processes, and products using a total value assessment to more accurately quantify and achieve long-term business benefits.

In today’s hydraulic marketplace, original equipment manufacturers (OEMs), end users, and all stakeholders involved need forward-thinking suppliers to help them reach their goals. But what does that look like? In simplified terms, the goal is to increase productivity, reduce costs, deliver innovations, improve quality, and respond faster to customer needs. These objectives are key components of a business accelerator model, which ultimately translates into tangible business benefits.

The business accelerator model impacts everything from the selection of materials to design process and manufacturing. Purchasing and supply management traditionally focused on price. However, these managers are starting to take heed of a bigger value proposition and a more holistic view of their materials purchasing and supplier selection criteria. The model we are depicting fills the gap that traditional suppliers have yet to offer—rethinking profitability and how to achieve it. It has been developed to bring an over-arching, deeper understanding of the value a supplier can bring to impact the entire supply chain and has “revenue-enhancing” effects on its customers’ businesses. Creating a collaborative environment creates more agility, adaptability, and alignment, which is really only possible when partners promote knowledge flow between the highest areas of impact within the supply chain. This attentive dissemination of information is what enables a supply chain to come together in a way that creates a true value chain for all stakeholders. Knowledge flow also creates value by making the supply chain more transparent and by giving involved parties a 360-degree view on customer needs and value propositions. Increased visibility can provide such benefits as a better understanding of market trends, enhanced product design, planning, and development.

Leveraging an advanced delivery program can result in increased throughput of goods. The greatest culprit in reducing throughput is waste, which can translate to hydraulic machine downtime, lost time waiting for materials, out-of-stock supplies, operator errors, and poorly designed processes.

Specific to the fluid power industry, this model supports an advanced delivery program because of its unique design, which decreases the need for product variations in inventory, simplifies logistics (less SKUs to manage), and delivers on quality, flexibility, and just as important, modularity. A business accelerator model reduces overall cost to bring finished products to market and reach the objective outcomes:

  • Incorporate “base-level” design
  • Deliver product coverage for all application conditions
  • Reduce overall number of SKUs
  • Decrease the number of vendors
  • Increase throughput via lean manufacturing
  • Provide supply chain advantages and savings
  • Offer “shoulder-to-shoulder” design and testing

Suppliers today need to support their hydraulic equipment customers to increase their market share and generate additional business value. Our business acceleration model does just that by improving our customers’ product development cycles and reducing design, development, and delivery costs while bringing greater value to the end product, attracting prospects and increasing sales.

By Joe Woods, Fluid Power Segment Manager, Trelleborg Sealing Solutions.

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