Delay as a consequence of the supply
One of our Clients, a leading company in the cosmetic packaging sector, in 2014 decided to change supplier of gaskets (O-Ring customized) and to choose a more economic competitor.
AFTER SIX MONTHS WE WERE CONTACTED BY THE PURCHASING DEPARTMENT ABOUT AN URGENT PROBLEM: A STOPPAGE IN PRODUCTION BECAUSE OF A FAILURE TO DELIVER THE MATERIAL IN THE TIME REQUESTED.
Product: O-Ring | Produzione O-RIng. / Application: Packaging | Guarnizione per Packaging / Compound: NBR - butadiene acrilonitrile | Mescole NBR per guarnizioni
DESCRIPTION OF THE PROBLEM
The Purchasing Department of the company in question, after eight years of collaboration, decided to try a more economic competitor of TS International®.
It is not a new thing for our Marketing Department to have an offer refused by a Client who does not know us because of the "Price" but, rarely, it happens that a Client with high levels of quality, who have already had experience of our service (our company retention rate is one of our strong points) decides to prefer a more economic competitor and expose himself to risk as a result of this choice.
After only six months the Client contacted us urgently saying that he had a problem with the new supplier: he had just received the news that the delivery of the special O-Rings ordered would not be respected according to the agreement and this, would have caused a very costly stoppage in production.
OUR SOLUTION TO THE PROBLEM
The manager of the Sales department of TS International® took on the project and defined a schedule of Urgent Production.
After a rapid meeting with the Technical and Production managers the Urgent Production schedule was started; in twelve days the Client received the requested gaskets, ready to be assembled.
Problem resolved, client satisfied and loyal.
SUGGESTION: when a Purchasing Department evaluates new suppliers it is natural to bear in mind the price as crucial, decisive criteria. Anyway, we advise them that they should consider in the price the "Total Cost of the Product" derived, as well as the price of the purchase, also from:
- Cost of assembly
- Risk of stoppage in production
- Slowing down because of imperfect products
- Resetting of the machines, etc.
[OFFICIAL DATA]: Increase in sales with the Client of the Case Study of +73%
MORAL OF THE CASE STUDY
When you evaluate the offer of a supplier, you must bear in mind not only the price of the purchase of the product supplied, but also the total cost of the finished product. If you change supplier and only because of the price, you should provision for the possibility of experiencing new problems, which, for example, lack of respect for the delivery time, with costly consequences in stoppages in production.