When it comes to power transmission products, there isn't too much new on the market, even by the admission of manufacturers and distributors themselves. "The traditional power transmission segment doesn't have much in the way of new products, although the motion control segment of the industry does," reports James Lamb, vice president, marketing and sales, for Drives Inc. (Fulton, Ill.), a manufacturer of high-end, high-fatigue/life roller chains.

"Because of the maturity of this business, we don't get a lot of new products," adds Bill Purser, president and CEO of Applied Industrial Technologies (Cleveland, Ohio). "On the materials handling end, though, there is a new design for idlers that will increase the carrying load capabilities."

Recently, TB Wood's Inc. (Chambersburg, Pa.) introduced a new line of drives that meets National Sanitation Foundation requirements. The drives have enclosures that meet environmental requirements related to water and food processing applications, according to Took Coder, vice president of sales. The company has also introduced a new drive that users can program through a personal digital assistant (PDA). According to Coder, it is the first AC drive that can be programmed wirelessly with a PDA. An infrared port allows users to edit and beam drive settings. "For example, if you have 30 drives and want identical programming, you can do it all with a PDA," he explains.

"We are also seeing a trend toward self-monitoring products," adds Applied Industrial's Purser. "More of our customers are moving away from preventive maintenance and toward predictive maintenance." To succeed in predictive maintenance, manufacturing companies need so-called smart products, such as those with chips embedded in them, that feed information to maintenance people on how products are operating and their overall condition. "We believe this is the wave of the future, and that we'll see more products like these over time from manufacturers," he adds.

While there isn't a wide array of new products available from power transmission manufacturers and distributors, there are lots of new services, which they strongly encourage buyers to consider. Before discussing these, though, they emphasize the importance of proper mindsets among buyers. In simple terms: Buy on total cost, not price. "The concept of total cost compared to selling price has been around for 20 years, yet so many customers still don't understand it, even at the most basic level, such as not even factoring in the cost of freight," laments Lamb of Drives Inc.

Mary Sue Lyon, executive vice president of the Power Transmission Distributors Association (Chicago, Ill.), agrees. "Many of our distributor and manufacturer members continue to mention that buyers still do not understand or value the concept of total cost of ownership." She notes that, while price is important, customers will end up paying more in terms of excess downtime, repeated failures, additional installation and maintenance costs, additional energy costs, inventory costs, etc., if they fail to address total cost.

She delineates some of the opportunities that open up to buyers when they focus on cost rather than price. The first is an opportunity to reduce cost by having suppliers recommend best products for specific applications. "Buyers need to thoroughly understand the objectives and requirements of their internal users," says Lamb. For example, when the products are used in MRO environments, buyers need to find out from maintenance people what their problems, issues, goals and requirements are. When products are used in OEM situations, buyers should talk with design engineers to see what they need. "Once you determine what they are trying to accomplish with the products in their specific applications, you can work with your suppliers to identify the best products," she explains.

"We are partnering with many of our customers to understand their wants and needs," notes Purser. Customers have both, and it is important to separate and understand both. For example, a customer may say they need consigned inventory. "What they really need is inventory management," he states. Buyers should first work closely with their customers (engineering, maintenance, operations, etc.) to find out what they need and what they want. "Then, they should work closely with their distributors to translate what their customers said they need and want," he adds.

Second, Lyon emphasizes that distributors can be a wonderful resource for synthesizing information among products, applications, and users. "They have years of expertise from solving issues with other customers," she notes. For example, they can recommend products that improve yield by reducing waste and rework, reduce energy usage, and extend equipment life.

Third, buyers should take time to learn and understand the full scope of their distributors' capabilities. "Up until ten years or so ago, distributors focused primarily on selling products," notes Lyon. "However, they have evolved tremendously since then. Many of them are becoming full-service providers, which allows customers to outsource certain services." For example, many of them can install and maintain products, provide turnkey design services for control panel systems, perform systems integration, conduct energy audits, handle maintenance training, and perform troubleshooting on performance issues.

While most distributors promote value-added services that translate into long-term cost savings, Jack Bailey, president and CEO of Independent Distributors Cooperative-USA (Indianapolis, Ind.), encourages buyers to consider local independent distributors. (IDC-USA is a member-owned purchasing, warehousing and national marketing cooperative of about 180 independent distributors.) "Large chains tend to focus on price savings only," he says. "It is worthwhile to look into the service and expertise you can get from a local distributor." He cites an example: If a buyer decides that he or she needs a $150 product, they can find a distributor to sell it to them. "However, a knowledgeable independent distributor who finds out why you want it may suggest a product for $190 that will save you much more over the life of the product," he explains. "I have talked with a lot of customers who aren't satisfied with the 'big box' national distributors anymore, because they just aren't getting the service and expertise they need."

Another way to make the most of cost-savings opportunities with power transmission distributors and manufacturers is to be sure the buyer has authority to make decisions. "A problem we frequently encounter is that many buyers aren't decision makers," laments Coder of TB Wood's. "You have to go one level up to find the decision maker. However, buyers often don't allow our salespeople to talk with these decision makers." In such situations, the buyers are often paid to accomplish one thing only—knock the price down. "The problem with this is that it eliminates the opportunity to consider value-added solutions and services," continues Coder. "Customers can save a lot more than 1% or 2% with price cuts by talking with distributors about value-added opportunities that reduce total cost over time."

Another way to generate cost-savings opportunities is for customers to be as efficient as possible themselves. "For example, it costs us less to deal with customers that place orders electronically and that limit the number of emergency calls and requests they have for expediting," states Lamb of Drives Inc. "We rank our customers in terms of how much they cost us and, on occasion, we will stop doing business with certain customers. Conversely, customers who make our jobs easy are the ones we take care of first when there are problems such as steel shortages."

A final point on cost savings: Work with suppliers to develop metrics that measure the value-added services and cost savings that accrue over time. "It is important for customers and suppliers to agree on these metrics up front," emphasizes Purser.

While focusing on total cost rather than price is the most important thing buyers can do to cut costs associated with power transmission products, another key strategy is to develop long-term relationships with suppliers to ensure product availability. "Relationships are becoming more and more critical these days, and developing such relationships can be difficult if you're sourcing overseas, especially from China, where cultural and language differences are so pronounced," cautions Lamb.

Regardless of source country, planning product needs is more important than ever before. Reason: For the first time in a number of years, steel availability is becoming an issue, according to Lamb, largely because of demand from China, which is a large net importer of steel, especially higher end steel. "This becomes a problem for us and our customers if we can't work with customers to plan for their needs," continues Lamb.

While prices for power transmission products from China tend to be attractive, Lamb encourages buyers to take another look. "Because of the increasing shortages of steel, products coming out of China that have high steel content are 20% to 30% higher than they were even six months ago," he says. "This is causing U.S. companies that were purchasing steel products from China to rethink their strategies."

In sum, to save the most money possible on the purchase of power transmission products and be assured of reliable availability, identify full-service distributors and/or manufacturers, and develop long-term relationships with them.