Narrative Analysis of B2B Purchasing Our company has long decided to install robotic machinery in all our plants spread in many parts of the country. Top management decided to proceed with the plans after funds were allocated for this important equipment in manufacturing. Talks were conducted with a Japanese firm which has specialized in robotics and has supplied European companies with most of their equipment. Our company has been in need of advanced and complex products and this must also include support services. Many companies, like Matsushita from Japan, are offering new, better, and more advanced support services to accompany the machinery and equipment that they sell.
In most instances, the support services are needed throughout the product’s life. Such services are often referred to as “after-sales services, product support, customer support or just support” (Kumar, Markeset, & Kumar, 2004, p. 400). We are a car-manufacturing firm which had not updated our machineries and IT that runs these machineries. Until recently, we had occasional talks among the different departments to provide ways to update or modernize our equipments. R&D was given the task and was responsible for the initial modernization plans.
They decided to apply robotics to reduce manpower and costs of manufacturing. The manufacturing equipments we had used were old machineries and most car parts have been outsourced from outsourcing companies which were based outside the country. There is danger to this method of car manufacturing as we could jeopardize some of our secrets in car making. Robotics is important in producing precise measurements for automobile parts which we cannot outsource from other companies as we cannot divulge trade secrets. The parts we manufacture in-house are machine and motor parts where we apply trade secrets for speed and accuracy in driving.
Software has already been installed in most of our cars and in manufacturing hybrid cars but we still lack the machinery and robotics for more efficient production. The marketing department contacted several companies specializing in machineries with our specification and need. The marketing and R&D departments had regular conferences and brainstorming to determine the right seller for the equipment we needed. Finally, top management made a decision about the different opinions and suggestions provided by the purchasing team.
The choice was narrowed down to two firms which could give us what we needed for our manufacturing plants. After further discussion and brainstorming between R&D, marketing, and the IT departments, we finally made our choice – the Matsushita Company of Japan. We had regular communication with Matsushita Company, a global firm specializing in plant machineries, robotics, machines and engines. Communication in this purchase was made easy for the parties involved as we used computer-mediated communications (CMC) which is now a common practice in business-to-business sales processes to enhance the effectiveness and efficiency of the sales process.
We used emails, the Internet and extranet for fast and effective communication among the personnel involved in the purchase. Computer-mediated communication enhances the flow of the volumes of information involved in the business transactions. (Cano, Boles, & Bean, 2005, p. 283) The people involved in the negotiation were the managers and personnel of the marketing and the IT departments. Various topics were discussed during the initial stages of the negotiation. The seller would provide the product including maintenance and repair services, delivery of spare parts, expert services, and field services.
The delivery and installation of the robots and machinery were completed in two months’ time and became operational after another two months. Close coordination was conducted between our IT personnel, workers, and the seller’s engineers and IT technicians. Training and orientation of our workers was part of the contract and this was managed by the seller’s working staff composed of engineers and experts on robotics and software to command the robots and machinery. It was agreed that the product did not just include the physical or tangible product, but also spare parts, documentation, and maintenance tools.
Along with these are the services that should be provided to support the product, such as spare/warranty parts and maintenance tools. These services should be provided to overcome any weaknesses due to design constraints. Maintenance includes services such as lubrication, filter change, and cleaning. The communication process was first conducted through Internet chat and video presentation. I was part of the negotiating team to conduct inspection on the quality and viability of the product for our manufacturing plants.
Our team was composed of marketing executives, IT experts and their technical assistants, and those responsible for research and development (R&D). The purchasing situation was first made possible through the Internet and video presentation. We had constant communication with the seller and our own team studied the advantages and disadvantages of the purchase process. The pros and cons were weighed down and when we reached a conclusion that the purchase of machineries would have more advantages and stronger competitive advantage, we recommended to the top management that the purchase is necessary and should proceed as planned.
Our team personally went to Japan to talk with the Matsushita counterpart and formulate the contents of the contract regarding the machinery sale and installation to our plants. We were ushered to the company’s manufacturing plant and their display center which consisted of various types of machineries and robotics used in manufacturing cars and other products. It was a memorable experience to most of us, me particularly as it was my first time to be in the land of the rising sun and the company Matsushita which looked like an alien land.
The team’s counterpart was composed of marketing people and technical men who demonstrated how the machinery would work during actual operation. They used video, slides, and all sorts of graphics to convince us. Most of the video presentations are available through the Internet. But of course it was different when they were presented to us live. They assured us that the operation and handling of the machineries would be their responsibility and they would not leave us until we become experts in the operation of the machineries. We had twenty manufacturing plants to be applied with robotic technology.
A pilot team was to install and make operational the machinery in one of our plants. This was to make sure that the equipment was in good condition and could effectively provide precise products for the company. Our company’s quality assurance team composed of engineers and technical people tested the equipment to see if they performed according to specifications in the contract. Matsushita informed us that they had close contact with their suppliers and if something went wrong, they were ready with the spare parts.
Maintenance and spare parts were one of the additional services provided in the contract. This is a model conceptual framework when two organizations are working together (Golicic, Broyles, & Woodruff, 2003). Engineers, technicians and assistants from both seller and buyer installed and tested the machineries in a plant which was the pilot plant. It took them two months to put the robots and machineries into operational use, although there were some faults and malfunctioning that occurred during the actual run.
The Matsushita engineers proved their expertise in the operation and trained our own engineers and assistants. Maintenance parts and the needed expertise were available all the time so that no big hitch occurred. Our two organizations, which comprised the seller and buyer, collaborated in the process of purchase. The purchase did not stop at the mere possession of the machineries and robotics, but the process has been extended up to the time we have possessed these equipments because it is part of the contract. Collaboration of the two firms is known as a win-win situation where problems are predicted and solutions are right there before the problem occurs.
This is a positive situation for the two sets of employees. (Bobot, 2010, p. 295) References Bobot, L. (2010). Conflict management in buyer-seller relationships. Conflict Resolution Quarterly, 27(3), 291-319. doi: 10.1002/crq Cano, C., Boles, J., & Bean, C. (2005). Communication media preferences in business-to-business transactions: An examination of the purchase process. Journal of Personal Selling & Sales Management, 25(3), 283-294. Golicic, S., Broyles, S. A., & Woodruff, R. (2003). A conceptual look at the influence of relationship structure on disconfirmation process in a business-business context.
Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior, 16(1), 119-131. Kumar, R., Markeset, T., & Kumar, U. (2004). Maintenance of machinery: negotiating service contracts in business-to-business marketing. International Journal of Service Industry Management, 15(3-4), 400-413. doi: 10.1108/09564230410552077