When starting a new relationship, all qualities of the partner in question should be reviewed. Cost considerations are, of course, an important part of the bidding process — but price can become a dangerous distraction. When choosing a vendor, it is important to remember that price is not the only component of value. Flawless functionality, not cost, should be the priority of critical-use manufacturing work. The right manufacturer will double as an partner to solve problems and provide solutions.
Cost vs. Value
When evaluating vendors, clients should be wary of manufacturers whose responses focus solely on cost recommendations and money-saving strategies. This is an indication that the vendor may not have the project's best interest in mind, and is instead trying to win the bid by undercutting.
The best vendors are those who add value not by slashing costs, but by eliminating unnecessary manufacturing efforts. A manufacturer that has the skill and experience to work as a partner can reduce expenses by simplifying the process and making it more efficient.
The value-centric vendor reduces cost by identifying waste and unnecessary complications, and then finding ways to reduce or eliminate them.
Risk Identification and Mitigation: Key Components of Value
No matter how low the cost, no value is added if the hardware does not function.
This reality separates low-cost vendors from high-value vendors.
No manufacturer can remove all risk and still maintain a reasonable price. The best vendors identify this risk and develop a plan to mitigate it. Value-centric manufacturers pride themselves on being upfront with their customers about potential risk, and working with them to find solutions as the project progresses. These elite manufacturers will not take a project past a point where recovery is impossible without first knowing what the results are going to be.
Communication: A Warning About Low-Cost Vendors
For customers who allow themselves to be wooed by a low bid, buyer's remorse often sets in when it becomes difficult to get their vendor on the phone. No news is not always good news, and when status updates become vague or infrequent, there is reason to worry and probe the situation.
Stalled communication could be indicative of a problem the manufacturer does not want to reveal to the customer. The key signatures of value-centric manufacturers are open dialogue, transparency and frequent updates.
The highest-value vendor is not always the lowest-priced vendor and the lowest-priced vendor does not always offer the most value. When evaluating manufacturers, builders should consider a potential vendor's past relationships and return business as closely as the cost of their bid.