Steve Johnson of Johnson Stephens Consulting agrees with our guest columnist Jim Barnes on the value of a straight consulting approach (versus design-build) for distribution automation projects…
On Design-Build… or Not
I couldn’t agree more with Jim Barnes about the clear advantages of using an independent consultant for your distribution center design vs. a material handling equipment supplier/design-build approach. Companies should remember that when offered a highly discounted or “free” design that “Nothing is free!” This is the proverbial “fox guarding the hen house.”
A recent tactic employed by design-build MHE suppliers is to offer that “we will bid the design to three vendors.” The problem here is that the three equipment vendors are the three brands of equipment that the design-build firm installs. This is not a true competitive bid, as the design-build MHE supplier will still, in the end, be the installer of the equipment (and the provider of the equipment bids – all of them!), no matter which brand is chosen from their offering!
While most buyers are astute and can see the difference, nevertheless, to confuse the market, many MHE design-build firms are now advertising themselves as “consultants,” so much so that you have to dig deep into their literature and website to realize that they are indeed an equipment supplier first, not an independent consultant. They may have added planning service, but, in the end, they are still in the business of selling and installing their brands of equipment. This is their source of income. The bottom line is the buyer of such equipment will pay 20 to 30% more (we have documented this time and time again) than had they employed a true competitive bidding approach using an unbiased, consultant/client designed solution.
Johnson Stephens Consulting, Inc.