David Nystrom, TSi Power Products

David Nystrom,

TSi Power Products

David Nystrom is the general manager of TSi Power Products in Antigo, Wis. Nystrom has more than eight years of experience in the power conversion industry. He began his career in manufacturing and progressed to sales and marketing prior to leading TSi Power Products. TSi Power Products is a subsidiary of TSi Power, a partner member of the Control System Integrators Association (CSIA).

Q: In your opinion, what are the most important characteristics an OEM/system integrator should look for in a technology supplier?

A: This question will naturally be defined by the OEM’s own needs, which will necessarily differ based on the organization.
If I must narrow it down to a single characteristic relevant to all OEMs, I would say accountability. The supplier must make every good faith effort to deliver on its claims and to stand by its product. Lead times should be accurate, prices should not change without notice, and service and warranty issues should be handled in a straightforward fashion.

Without accountability, the relationship between the OEM and technology supplier is inherently unstable. No matter how good prices or technology specifications are today, there is no guarantee this will remain so tomorrow. Worst of all, without accountability the OEM cannot count on long-term support and may be stuck servicing complex technology.

Q: If you could recommend one key first step for an OEM/system integrator entering the technology evaluation process, what would it be?

A: The first step must be for the OEM to thoroughly educate itself on the technology it intends to acquire. Without thorough knowledge of the technology, how can the OEM properly evaluate prospective vendors and their solutions? Only a shallow evaluation based on price, lead time, and marketing buzzwords will be possible.

TSi Power Uninterruptible Power Supply
A TSi Power outdoor uninterruptible power supply serves a mission-critical system at a nuclear power plant.

Today this is much simpler than it once was. Reputable industry associations and trade groups, whether professional associations such as the IEEE or trade groups like the Control System Integrators Association (CSIA), make a wealth of literature and training materials available online. Much of this is free to boot.

READ ALSO: Control System Integrators Association Launches New Website

Q: How can OEMs / system integrators effectively balance the price versus performance tradeoff when considering potential technology partners? What advice can you offer OEMs / system integrators to help them ensure they aren’t employing overly sophisticated solutions or putting too much emphasis on the up-front cost (or cost savings) of an embedded technology?

A: The tradeoff depends on what performance characteristics are demanded by the application. In an application demanding very precise tolerances and control, a less sophisticated and less expensive solution will ultimately cost more because it will fail to deliver adequate performance. But in a simpler system requiring lower tolerances and control, the old saying, “better is the enemy of good enough,” applies. Not only would the user be paying more than needed upfront, but more complex systems tend to have inherently higher failure rates—increasing operating costs.

The question of capital costs versus operating costs is a common dilemma. In my experience, too many OEMs are biased toward scrimping on the capital budget, only to suffer higher operating expenses down the road. Acquisitions cannot be handled solely by purchasing managers. Field service managers, and other users of the technology must be involved in the procurement process with a strong focus on total cost of ownership. Unfortunately, it is sometimes hard to make the case to spend more now to save more later.

Q: What are some red flags OEMs / system integrators should keep an eye out for when interfacing with equipment suppliers? How can an OEM / system integrator make an early diagnosis on a technology partnership that may be going the wrong way?  

A: This brings us back to the first question, and the matter of accountability. One strong red flag is if no single person at the equipment provider is in charge of the relationship with the OEM. If no one is in charge, no one is responsible. That is the exact opposite of accountability!

Missed deadlines, vague commitments, and changing specifications or prices are all red flags. A good equipment supplier communicates all of these things clearly, which is essential for the OEM to be able to make plans. Is your equipment supplier consistently failing to deliver what it has promised? You need to find a new supplier.

One less obvious red flag is when an equipment supplier is too quick to claim it has the perfect solution. If an equipment supplier claims its technology meets all of your requirements and then some, it may be overpromising in an effort to secure your business. In the real world, few existing technology solutions are perfect, and even custom-developed technology involves tradeoffs—not least of which is time and cost.

The best early diagnosis of an equipment supplier can be made by seeing if it can fulfill simple requirements, as promised in accordance with the OEM’s needs. If the equipment supplier can’t solve simple problems, it will fail to solve complex ones.

Q: What are some best practices OEMs / system integrators can employ to effectively manage partnerships with technology suppliers throughout the product development lifecycle?
A: This comes down to two practices—measurement and communication. An OEM needs to define what performance acquired technology is to achieve and verify this. Whether the technology performs or not, the information must be communicated to the equipment supplier in a timely fashion. Otherwise, there is no way for an equipment supplier to respond to changing conditions in the field.

Additionally, it benefits an OEM to communicate details seemingly unrelated about the complete system’s performance rather than only the performance of a particular vendor’s technology. Good equipment suppliers are more familiar with their product than the OEM is, and they may be aware of second order effects the OEM is not. Communicating this information can result in unexpected cost savings and performance improvements.

How has the OEM / system integrator marketplace and/or technology landscape changed over the past 10-20 years? Are there any external factors/trends in recent years that have had a significant impact on how OEM / system integrator solutions are developed?
Old-fashioned “middleman” integrators and OEMs are disappearing. In the past, end-users relied on integrators and OEMs not just to do field installations, but also to procure parts. This created some stable environments in which integrators were able to profit on markups without adding a great deal of value.
Increasingly, manufacturers and end-users are bypassing resellers and dealing with each other directly. Intermediary companies without expertise in systems integration, long-term maintenance, and other value-added services have seen their position erode.

At the same time, more opportunities have been created for those integrators and OEMs with specific expertise. Manufacturers have substantially increased the range and capability of their products. This has led to new opportunities for intermediaries to offer long-term maintenance contracts, turnkey setup deals, and even the complete takeover of end-user operations in some applications.

Q: What do you see as the key influencers in the OEM / system integrator marketplace going forward? How will the OEM / system integrator marketplace be different in the future than it is today?
The biggest influence I see is the rapid diffusion of information and communications technology (ICT). Whereas once the Internet primarily connected people and organizations, increasingly ICT now connects machines. Much press has been made of this in the past few years, for instance, General Electric’s “Internet of Things” initiative or the German government’s Industry 4.0 initiative.

Manufacturers are now incorporating Internet-connected sensors into their products, allowing for precise measurement and control from remote locations. More advanced sensors and controls allow for autonomous operation in some applications as well.

The OEMs and system integrators that survive and thrive in the future will be those that master ICT. End-users often do not have the time or resources to setup and maintain complex computer networking technology, but they will demand the benefits provided by such networks. Intermediary companies that master this valuable service will succeed. www.controlsys.org, www.tsipower.com

Interview conducted by Matt Migliore, director of content for Flow Control magazine and FlowControlNetwork.com. You can reach Matt at Matt@GrandViewMedia.com. Follow Matt on Google+. Connect with Matt on LinkedIn.