Bad descriptions. Bad decisions. High costs.

The world of MRO is replete with holes, errors and uncontrolled costs (not just price). One example is the condition of product descriptions. It is rare that a company’s SKU (stock keeping unit) listing has complete descriptions; most are missing one or more important attributes. In an effort to reduce cost, the purchasing group will put together a Request for Quote (RFQ) for commodities. With inadequate descriptions, the company is open to price responses that can cause dangerous situations.For example, an RFQ on fuses has the brand and the amps; the volts and part numbers are missing. The supplier will quote the price of the fuse with the lowest volts because it is the cheapest. If the supplier is awarded the business and then told the fuses are wrong (i.e., the higher voltage is required), the price goes up. It is now too late to switch suppliers.

The same thing occurs when a brand is not specified. The lowest price is quoted only to find out that only Buss, e.g., is acceptable. Again, it is too late to change.

Many RFQs do not include quantities or consistent units of measure. A supplier can quote an assumption of order quantity and then raise the price when the order quantities are small or broken package. When the unit of measure for ordering is different than the unit of issue, the quantities on the RFQ can be misleading and cause inconsistent price quotes.

The effect of inadequate information is a potentially costly, and perhaps dangerous, situation where savings are lost and/or inadequate parts are used.