The Riches are in the Niches
How automation and machinery builders can build their empires in narrow subsectors
It all Started with a Valve Machine
When RND Automation was a very young company we were approached by a local hydraulic valve manufacturer to build a simple machine. It handled valve “poppets” and through a series of processes it put a fine finish on the part.
It was a simple operation but helped remove the tedious tasks from humans. We were soon rewarded by the same company with another machine that assembled o-ring onto the valves.
Next we won a project from them that was our largest to date. A $1 million plus machine that assembled cartridge valves. That was almost 20 years ago and the machine runs to this day, having produced millions upon millions of valves.
Most people would be happy with 3 machines from one company. And don’t get me wrong, we were; but I wanted more. This is where I find that many machine builders miss a great opportunity. They simply move onto the next custom application.
Wouldn’t a better tactic be to go find the same (or similar) applications with other companies?
After these 3 machines (we ended up building dozens of machines for this company over the years) I began to seek out every hydraulic valve and actuator manufacturer in the US. We had become very knowledgeable in valve assembly so why not capitalize on that expertise.
From Hydraulics to Irrigation to Medical Device
As a small machine builder we had several disadvantages competing against other, larger firms. However we had one big advantage; we had done valve assembly before. When we showed these companies that we had done similar machines or operations we began to win jobs from others.
No longer were we selling a concept. We were selling a solution.
While at first it was not hydraulic valves, we did work for irrigation valve companies, faucet cartridge valve manufacturers, and eventually medical device valves (which then got us into our largest vertical, medical device assembly). It took a while, but we did eventually get more hydraulic companies as clients.
Over the years, after building these various valve machines, RND became known as “the valve guys”. If it was a valve, had tight tolerances, and needed to be assembled, we were the “go to” shop. In fact for several years, entering “valve assembly” into Google yielded us as the top hit.
It’s Not Just Industries
Keep in mind it’s not just industries of products that can create a niche. It can be platforms. I’ve written before about standardization and machine platforms. These can also help you lever your niche in multiple industries. By having these standard platforms you can easily show the customer how they may vary slightly to handle their unique product. Again, you’re selling a solution, not a concept.
Just be wary of tryng to create too many niches. Once you try to become a jack of all trades you become a master of none. There is phrase I was taught years ago:
You can be a mile wide and an inch deep, or a inch wide and a mile deep.
I’ll take the latter anyday.
Conclusion
As a custom automation builder you need to focus on taking the knowledge and experience you have gained from one application and find others that are similar. As the article title states the “riches are in the niches”. Find that special nich that no one else is offering and become and expert at it. While there are certainly IP and trade secret issues that need to be considered, in many cases it’s a conceptual theory that is repeated, not an exact process or formula. You’ve probably already built that “niche” machine in the past. You just need to find other customers that need that similar solution.
The Automation Navigator is brought to you by Automation AMA, a company founded and run by an industry leader in assembly, robotics and packaging. Automation AMA offers a variety of services to help you on your automation journey or to help fine tune your engineering, sales, operations and business development departments. Learn more at www.automationAMA.com or shoot me an introductory email.
