Partnering the way of the future: DBT

FOUR months after taking the reigns as general manager of the DBT Queensland customer service center, Bob Sherack spoke to ILN about emerging trends in the relationship between Original Equipment Manufacturers (OEMs) and their customers.

Staff Reporter

The German-owned companies which preceded DBT had a long Australian presence, but they did not maintain market share in the early 80s. Since 1995, with renewed marketing and corporate focus DBT has won 70% of new longwall orders in Australia.

The company has grown from 45 people with little longwall experience to today 125 people dedicated totally to longwall products.

Importantly, the recent winning of the contract for MIM's Oaky No 1 extension is DBT's first major repeat business in Australia. This is an important psychological victory, underlined by DBT's global motto: "New sales creates after sales activities, but only good after sales activities creates new sales".

"Mines have traditionally seen buying equipment based on technical and financial merit. In this case the mine recognized there is another vital ingredient when evaluating equipment and there's no question that our relationship with the customer played a significant part of the mine’s decision making process," Sherack said.

The Oaky deal was also characterised by an emphasis on what would happen after the equipment was purchased. According to Sherack, this was fairly unusual and a different point of focus in the negotiations.

While Sherack declined to provide any details of the structure of the deal he did say this: "We've defined and agreed the manner in which we are going to do business for three years after the equipment starts producing. This will include monthly meetings, and an incentive for the mine for agreeing to do all their business with DBT."

This kind of agreement has to be accompanied by a certain amount of openness and trust between the OEM and the customer, as opposed to the old-fashioned adversarial relationships.

Sherack said typically when a mine experienced an equipment failure everyone tried to rush for cover; the mine to avoid warranty issues, the OEM to avoid negative publicity. In recent times DBT has begun to put in place innovative agreements with certain customers to avoid this type of 'non-productive activity'. In one instance, management from DBT and a customer have negotiated at senior level a different kind of approach, rather than wasting energy to pin blame when something goes wrong.

"If equipment's late returning after an overhaul it can cost the mine up to $1 million a day in loss of production. We're finding with one customer, because we're not haggling over a couple of thousand dollars, all our people focus on getting equipment out on time."

This has also provided DBT with an incentive to inform customers about potential problems, before they arise. This shift in emphasis from the original sale to the longer-term relationship, is evident by the global implementation of customer service centers to provide after-sales service to DBT customers.

"The intention with those centers is once equipment is at the mine, every single thing after that, is handled through that center. This includes not only traditional activities such as repair, overhaul and servicing, but all aspects of doing business such as issue resolution. The buck stops with the service center." Sherack said.

"We deal in big lumps of steel but it's always through people. Equipment suppliers are not always that good at relating to customers. Geoff Newby's role (in Queensland as account manager) is to improve customer relations in a long-term way."

Sherack said Queensland Bowen Basin longwall mines were driving these changes as their dependency on OEMs has grown and internal engineering staff numbers have shrunk. These mines, Sherack said, "have doubled production whilst at the same time halved manning levels as compared to predecessors only five years earlier".

According to Sherack the role of the DBT service engineer is changing dramatically. Increasingly they are becoming a part of our customer’s business and play a logistics role co-ordinating repairs and maintenance issues between the customer and OEM.

"This area of our business is our present focus for improvement, we have an excellent service team that will soon be provided with planning and scheduling tools to assist them in their day to day work."

Nevertheless, as Sherack acknowledged, there will always be breakdowns and operational problems.

"What really matters is how you deal with them when they happen. When dealt with in an open and effective manner the relationship is usually strengthened. We don't want short-term gain and long-term shame. We want our customer for ten years or so, leading to repeat new equipment sales. And the cycle continues."