Lowest price does not mean lowest cost
on June 30, 2013
When choosing a supplier for your company, cost is (and should be) a major factor in the selection process. This is true for all industries and across all markets. But sometimes companies only look at the piece part price on a quote and act as if that will give them the entire cost picture. In reality the price is only part of the total cost.
Packnet believes that there are many hidden costs in doing business with someone. Total costs don’t always get captured in a purchase order but will significantly impact a company’s bottom line. This is especially true when dealing with custom engineered solutions.
Some of the added cost factors:
- Time: Time is money and long lead times and response times by your supplier can add costs to your company. Added support time, increased inventory, expedited shipping and even higher scrap costs can result if your vendor is not responsive enough.
- Quality: Custom Engineered Solutions are often a one-time development process; coming up with a solution that does not quite do the job can cost a huge amount of money in added rework and damaged product. Even if the vendor redesigns the solution for free, it doesn’t compensate you for the time, rework and scrap that you sunk into the project. An experience packaging company with skilled engineering will make sure that the solution fully meets your needs. In other words, doing it right the first time.
- Expertise: Some suppliers that bid on projects are just tweaking a standard solution and trying to make it work. They have very little knowledge or experience outside of their “sweet spot” and give very little support to the customer who needs help with other areas.
- On Going Support: Some suppliers offer very little support after the product is delivered, or charge for support that you may have thought should be part of the package.
Packnet believes that when a customer takes time to review the value of the solution being offered, we will be seen as the lowest cost solution. We call it “The Packnet Difference”; it’s our proven 6 step process of how we interact with customers and each other.