The Components of Value

KevinIn today’s competitive market place, the term “value” is certainly used a lot. Customers desire the “best value proposition“ and ask us to document value. I find value is one of those elusive terms that has various meanings among the masses. Value, according to Webster (an offline dictionary), means a fair return in money, goods, or services for something exchanged. Value also is the quality or fact of being excellent, useful or desirable; worth in a thing. The definition goes further to state estimated or assessed worth; valuation. Hmm, I get it now. How did we arrive at this point of value discrimination? Who thought this would be a good idea?
I approach this “value” situation as follows: for any Haggard & Stocking sales personnel, to create value for our customers, we must understand what our customer needs to satisfy their end users! Only after careful examination of what our customers need to be successful, can H&S align our efforts to assist them in this endeavor. Sounds elementary, however, these defining characteristics are not so easily communicated or conveyed.
“Price is what you pay and value is what you get,” is a slogan used in the marketplace. Price is a component of value, but just how much? I would argue that price is an important element of value but should not be the ultimate driver . I can name you a host of neat products, priced to sell BUT their availability is inconsistent at best. How about that quality component of value? How about talking to real live humans; is that important? Can human interaction play a vital role in value? Seems like in an imperfect world where nothing is 100% that having humans in there somewhere would be a good idea? I always like that service aspect!
Now, if we are fortunate to obtain a list of objectives, key drivers, tangibles that our customers must provide their end users, then we have the initial step to providing value. Next, we enlist our manufacturers, to provide a quality product to address the stated objectives. Productivity matters, doesn’t it? Machining efficiencies and cycle times and output matter, don’t they? Tool life, surface finish, machining tolerances – I’m guessing play a role.
A critical component of the value equation that is often overlooked is the customer . Yes, you heard me the customer. H&S and our manufacturing partners must have from the customer access, information and cooperation. Value creation does not occur in a vacuum. Value can’t be handed out like a brochure. Value is a collaboration – a group effort. Value, in most cases, must be developed or grown. Value to be long lasting must follow a sound process. Value is a culture of its own doing.
I believe that H&S plays a significant role in offering value to our customers. It’s important to note we are not in this value proposition alone-it takes our whole team.

Kevin Burnett

Executive Vice President