Balancing quality,cost and fast delivery

“You ought to pay the price for the privilege of supplying your products to Sony”, I was told. I asked – “What is the price you are talking about?”,to which he responded,”The price is that you have to sell your product at a loss!”.
This conversation took place years ago(perhaps in late 90s)when our company wanted to sell ‘copper clad laminates’ to Sony,Japan. That was the height of arrogance on the part of the Japanese giant at that time(I wonder how they treat their vendors today). And it was not without reason. They knew quite well that the mere fact of a sale to Sony was great advertisement for vendors to promote their products elsewhere. No wonder they demanded quality products at the lowest possible prices. It is a different matter that our management at that time decided against selling at a loss.

Quite interestingly,I have recently had a somewhat similar experience, with the roles reversed. This time around,I was the buyer negotiating a purchase of Rs 25 lakh worth of an equipment from two American MNCs. Both are very highly reputed companies known for world class quality and were desperate to bag the order. And both confessed they needed our account very badly and the deal was very important to them. There was a flurry of activity from both parties as they made several power point technical presentations followed by hectic lobbying at various levels. One of the parties seemed to have a slight technical edge as well as a reputation for better service. When they tried to use that as a reason for their slightly higher price,I straight away put them on the defensive saying that a better service could at best give them a slight edge in securing the order and certainly not justify any premium. To cut a rather long story short,we got the best possible deal as an important and influential customer.

It is often said that it is quite rare to get high quality,low cost and fast delivery at the same time. But,as our present experience proved,in today’s competitive world and especially in emerging markets (such as India and China),it is possible to get all three at the same time.

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Published in: on November 13, 2009 at 6:01 pm  Leave a Comment  
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