Are your contractors and suppliers being competitive?

Paul Bellville — Sun, 05 Jul 2009 15:31:00 GMT

Are your contractors and suppliers being competitive? It is a simple question, but the answer may not be so simple. If a contractor or vendor becomes comfortable, prices trend higher and services have a tendency to slip… Contractors and suppliers will charge as much for their services and supplies as they can…it’s human nature, and in most cases they will do as little as possible to meet the project criteria assigned to them. Many times I have seen the same contractor or vendor called upon because; “they all ready know the facility”, “ Their prices seems fair”, “I do not know who else to call” “they are already on-site” ect…

All facilities need multiple suppliers of services and products. If contractors and vendors are aware that you will be seeking prices from multiple sources, their products and services will be more competitively priced. If a contractor or supplier is always last in price during the bidding process, drop them from the list and get another qualified provider.

Too many contractors charge extra for every little thing….fuel surcharges, two people for a one person job, travel time, tool charges, truck charges, ect… I thought most of these items were required to perform a job... Why are you paying extra?

Example: I had one customer that wanted to automate a system of industrial blowers. They called the engineering firm that they usually use (only one firm). They performed the engineering work ($7500.00) and suggested a $25,000 control cabinet with touch screen display. My customer ordered the control cabinet., I was called to perform installation ($4,200) and when I looked at the system, I quickly determined they did not need the control cabinet. The infrastructure was already there… all they had to do was activate the HMI (human machine interface) screen already present, and pull some wires from their PLC system to existing blower control cabinet. The total cost of the project should have been less than $10,000 it topped out at $33,200. The customer was not happy…they called a meeting with all parties involved and after a short meeting, the engineering firm admitted they made an error but they could only reduce their engineering charges, the control cabinet was non-returnable. The customer in the end paid for a control panel they did not need and added additional componets to their facility equipment (spare parts, training, ect...)

Example: I recently sent a request for a quotation for a flow meter I needed for a project. The vendor’s (3) prices came back and their prices were a little high. When one of the vendors called to see what I thought of his price, I told him that it was out of line…He said he could do better. He called back one half hour later and dropped his price by $1000.00 on a $8000.00 item… The other vendors did better as well ($600-$700).

In the end I ordered the flow meter from the vendor that dropped his price the most, after all it is the same product supplied by all three vendors.

In the end my customer saved $1000. and I got the job.

Always press for a better way and a better price, but always keep in mind that the most important price is the life cycle cost over time (subject for another time)…

Questions:

How often do you perform the checks needed to keep prices inline?
How do you know when your supplier’s provide value?
Do you inspect their work (even in hidden areas like suspended ceilings, electric rooms, boil rooms, ect…)?
Do you compare prices from vendor to vendor and contractor to contactor?
Are you getting value added services (free) from you contractors and vendors: free training, electronic equipment libraries, quick scan thermograpghy checks of equipment, maintenance reliability improvement techniques, ect…

In the end, a contractor or vendor must provide value added services to your organization. Just coming to your facility to perform a function that any other contractor or vendor can do, just dose not get it done. In the end they must provide product, services and value that helps your organization succeed.

Best Regards.

Paul Bellville

Solutions-North East

301 Newbury Street #171

Danvers, MA 01923

Introduction

Paul Bellville — Sun, 05 Jul 2009 13:55:00 GMT

Hi Everyone,

My name is Paul Bellville and I live in northern Massachusetts. I joind this network to meet people that are involved with facility and equipment maintenance and management . I am sure that I will have questions from time to time that I will post, so thanks in advance for the help. I will also actively help out where I can...I will respond to both postings and also e-mails and phone calls...so do not hesitate to contact me if you think I can answer a question......

I own a contracting firm named Solutions-North East (www.solutions-northeast.com) . We offer electrical, instrumentation, automation services as well as predictive and preventive maintenance and reliability programs. I have been involved with building and equipment maintenance for over twenty years and in a variety of capacities (Supervision, technician licensed electrician, maintenance reliability, ect) both for my own company, a large Fortune 500 company and a large contracting firm.

If I can be of services to anyone, just let me know... I may be able to solve some problems with a simple answer to an e-mail or phone conversation.

Regards.

Managing during a down economy.

Paul Bellville — Sun, 05 Jul 2009 13:55:00 GMT

Facilities of all types in various industries are struggling with reduced budgets and ever growing obstacles to overcome. The obstacles can range from small to large, long range to short range. Of course you are required to provide better service at lower cost without sacrificing: quality of services delivered, safety of personnel or you customers, all while reducing your organizations impact on the environment…

We all face similar problems:

· How is you organization coping with the changes required for success during a down economy?

· What challenges do you face within your organization?

· What is your litmus test for success?

· Looking back, what worked and what did not…

· I look forward to hearing from you.

Best Regards.

Paul Bellville

Paul_Bellville

Are your contractors and suppliers being competitive?

Introduction

Managing during a down economy.