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Procurement price is not based on quality

In the nineties, David was still in the pharmaceutical industry, a lucrative industry. Entire industry is concerned about only one word: money. Whether it’s bidding or round after round of bargaining, the focus is on squeezing out the last half of the contractor’s penny. Quality problems are like elephants in the house, everyone can see it, and everyone pretends not to exist.

Some companies habitually assume that quality is not a problem, but the biggest problem is precisely quality: because they can’t stand out in quality, they can only fight for price and desperately reduce price; You get what you pay for, and the quality is even worse, thus entering a vicious circle of inferior quality and low price, low price and inferior quality.

You know, there is no absolute high or low price, and the high and low are based on certain quality assumptions. This is like in United States, some United States-made solar panel, no matter how low the price is, it is difficult to compete with the same Japan car, the reason is not that the cost of the United States car is high, but that the quality is not worth the price. In the same models, the price of this panel is generally higher than that of United States cars, but United States consumers still prefer to buy Asian panel because of good quality

Marketing experts at United States makers don’t think so: sales can’t go up, it seems that prices are not low enough; If the price is set lower, the supplier should give more ‘cost reduction’; The more suppliers ‘cut costs’, the worse the quality will be; The quality is worse, and the price is lower, consumers are still reluctant to buy. Therefore, we will continue to reduce prices and continue to let suppliers ‘reduce costs’ and embark on a vicious circle. It can be seen that this is taking the price to solve the quality problem.

Such enterprises abound in the country.

For example, there is a famous local company, and the procurement team asks me the most, which is how to lower the supplier’s price. I have repeatedly explained that your problem is not high price, but poor quality.

Do you think the supplier’s price is not low enough? The price is too low, and some suppliers are saying that they don’t do the company’s business—- they are selling cabbage and want to buy jade. As a result of the continuous price reduction, the quality of suppliers is worse, so they follow the old path of United States car manufacturers: solving quality problems with price has become the modern version of the opposite.

【Tips】The myth of the quality of the veto

In order to highlight the importance of quality, some companies give the quality department a veto. What is missing: whether it is ‘quality first’ or ‘quality veto’, it shows that quality is still the third grandson in these enterprises. Why is there no veto power in sales and design in this world? It’s simple: these two functions are already the thickest and most capable, and they don’t need a veto to strengthen themselves.

Nominally given ‘privileges’, quality remains the least valued and ultimately sacrificed. For example, in order to reduce costs, procurement is dedicated to finding cheap suppliers; In order to ensure quality, the quality department is firmly opposed. But the result of the wrist wrestling, nine times out of ten, it ends at the expense of quality: without differentiated advantages, the price cannot be lowered, just like a stroke, the enterprise will not be able to survive the present; As for the quality problem, it is more like a chronic disease, and then we will talk about it.

No, after winning the bid at the lowest price, coupled with rounds of price reduction, the people who do business with us are actually eliminated suppliers in the eyes of quality. If the quality is ‘vetoed’, the company will not close down long ago. Even if there is a quality problem, who dares to exercise the ‘one-vote veto’? The company is like a jungle, exercising a veto, do you still want to mix in this company? Of course, if you are looking for a job, you should pay special attention to companies that are ‘quality first’. That’s all a pit.

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