End the practice of awarding business on the basis of price tag alone.Instead,minimizetotal cost. Move toward a single supplier for any oneitem, on a long-term relationshipof loyalty andtrust.
Without adequate measures of quality, business drifts to the lowest bidderevery time,therefore the result is low quality and high cost(rejects, rework, regret).Price has nomeaning without measure of the quality purchased.End the practice of awardingbusiness on a price tag alone. Instead, require meaningful measures of quality alongwithaprice.Reduce the number of suppliers for the same item, by eliminating thosethat do not qualify with statistical and other evidence of quality.The aim is for bothparties to work together, byminimizingvariation to increase quality, and tominimizetotal cost (not merely initial costs)for both parties.This will lead to continuousimprovement between both parties and as a result youwill get quality supplies atreduced costs.This is why Japanese manufacturers are so closely aligned to theirsuppliers.We often spend lots of time and money to find better suppliers and shiftrapidly between them for slight monetary gains. Instead of getting vendors to competeon price think longtermand help them work better for you.Why? Because weather yourealize it or not you are both in business together. Disagree? What happens when theirdelivery is late? Do you get to ship your products? I didn’t think so.Today manyorganizationsjust outsource to the cheapest supplier, and often to multiple supplierswithin the same business unit or project.Don't make the same mistake twice.
Eric Ciampoli Industrial Consultants Inc.
220 Highpoint Ave. Weehawken, New Jersey
Cell: 917-703-6079