Machine and Process Management

Value for money : what does it mean now ?

Value for money : what does it mean now ?

My grandma told me once that in the good old days, it was easy to have quality. High price used to mean high quality and low price low quality. Nowadays, no way to know, according to her.  She was in the “traditional” trade off which is to balance quality versus  price which I do not believe to be true anymore.

money vs quality automation

Actually my grandma was meaning performance, and I could extend my grandma’s experience into something like this to define the traditional approach of performance versus price :

  • Products have some certain key intrinsic features
  • The higher the price I accept to pay, the better performances of these features I will have (performance including lifetime)

Still true of course, but times are changing, and nowadays in many areas we accept performance trade-offs, reduction of the intrinsic values of the product versus something other than the price.

Two examples from the daily life :

  •  We used to get light from bulbs that could be switched on instantaneously and were providing a nice warm dimmable light. And those values are the intrinsic values of a lighting device. We now use  CFL lamps, that are underperforming incandescent bulbs in every aspect, including price. But we do it in order to reduce electrical consumption and to contribute to solve the energy dilemma. Traditional trade off of performance versus price went to trade off performance versus impact on the environment.
  • We used to get a rich, colorful, splendid music from Compact discs. We now listen to MP3’s, with music quality degradation. Traditional trade off of quality versus price went to quality versus ease of use and the ability to have all your music with you all the time.

Two simple examples from the speed drives world :

  •  One customer whom I recently met, was mainly interested in the capacity from drives to be monitored and controlled everywhere in the world from his desk somewhere in a small village without any specific infrastructure. Ease of use through connection and digitization is for him more important than the torque or the positioning precision we can achieve.
  •  Energy saving is an intrinsic value of drives, but energy management capacity through integration and adequate services is quite a different story and for many customers more important than the pure energy saving “lab value”.

So what does all of this mean to us in the automation world  ?

It means customers now have new values in mind when selecting a product or a solution.  Such as the services available attached to a device, its ease of use, the constant access to information, its country of origin, its environmental impact, etc … and that the usual price versus intrinsic performance trade off has gone from two dimensions to multi dimensions making the equation more difficult to solve but also richer with several different optimums yet to be refined.


10 Responses
  1. Marco Chiari marco.chiari

    We are always ready to pay for what is valuable for us.

    The tricky point, as highlighted, is that the perception of what is ”valuable” is changing trough the time. One day is quality tomorrow is usability.

    Noways automation trend reflect the needs of the upcoming tomorrow industrial revolution. machine to machine communication ,service oriented architecture, cloud base services, are just an example of it.
    Automation devices of tomorrow need to be seamless integrated in flexible architectures , connected every ware, and provide high-value services, moving from ”hard” a mare actuator to ”soft” a smart devices.

    Reply
  2. Philippe Rambach Philippe Rambach

    Thanks Marco for your comment and for your interest !

    Regarding “quality” (in the sense of robustness or of performance delivered equal or superior to performances specified, etc ..) – I believe that it is one of the “intrinsic feature” where, in our domain, no customer is ready to balance.

    But, I fully agree with your comments regarding all other aspects and the changes coming in automation, the new customer key values.

    Philippe

    Reply
  3. rahman

    Dear sir

    we are interested in schneider product

    regards
    Eng rahman g azeez
    Erbil-iraq
    009647701953218

    Reply
    • Philippe Rambach Philippe Rambach

      Dear Sir,

      Thanks for your interest. I’ll send you the right contact directly on your mail.

      Best regards

      Philippe

      Reply
    • Philippe Rambach Philippe Rambach

      Hi,

      Thank for your interested in above post. Yes, we are in a fast changing world and we do not have answers to all of our questions. Asking them is anyway the first step to get closer to an answer 🙂

      Hope we’ll keep in touch as long as we move forward

      Best regards

      Philippe

      Reply
    • Philippe Rambach Philippe Rambach

      You’re absolutely right.
      Sales force need to transform from catalogue / feature kind of sales into managing customer value, understand his needs and drivers.
      It is also a transformation for the R&D and marketing teams … at the end a company transformation probably !

      Reply

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