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Procurement Solutions
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Lean Manufacturing Articles

pays them the biggest commission. Your own sales force is an expensive proposition. After all, for every $100 in sales, you make $3 in profit. So paying the salaries and overhead needed to support a sales force is an expensive proposition. Finally, turning to customers you already have is a tough sell. They know about you and would probably have already come to you if there were something diey diought you could supply them with. Even if they did need something, relying on the same customers over and over again can be danger­ous—especially if they start to account for a large part of your business.

Ask Questions about RFQs


Finally, you find an RFQ. Unfortunately, many buyers don't do a good job of providing detailed RFQs. They often will have poor drawings, not specify the applica­tion the item will be used for, the materials tolerances needed, etc. So you'll have to get on the phone or start sending faxes to ask the questions you need answered to prepare your bid. This can take a while. You'll also wonder if some other supplier who is bidding will be asking questions you never thought to ask and getting an unfair advantage due to the answers he gets.

Prepare your Bid

Finally, you'll have all the answers or you'll simply be out of time to ask them so you submit your bid. But submitting your bid is like tossing a piece of paper into a black hole. You have no idea where you stand relative to other bidders.

Answer Questions from the Buyer

The buyer may come back to you with a counter-proposal. If you bid $12k, they may come back and say that they have a bid for $1 Ik. The problem is, you have no idea if this is true. The buyer could be bluffing in an effort to get you to lower your price. But what choice do you have? You can call their bluff and hope your right or you can lower your bid, get the business and hope you get more profitable follow-up business down the road.

Win the Business (Maybe)

After all of this back and forth, you may win the busi­ness. But if you lose it, you may never really know why. And now you have to start the whole process all over again in an effort to find the new business.

Now that we understand the current pain, let's move on to the solutions that are emerging and taking hold.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 14

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