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Old 07-01-2013, 05:09 AM
 
Location: Wartrace,TN
7,955 posts, read 12,637,997 times
Reputation: 16182

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A little rant and confusion why a business would send out 175 different items for bid and expect competitive prices in two weeks/

I work in cost accounting/estimating for a small manufacturer. There seems to be a move in the industry that is outsourcing some buying activity to third parties.

On Tuesday of last week we received a LARGE bid package from one of these third party companies that was buying for four other companies. There are 175 items they want quoted and they have given everyone two weeks. I might also mention they did this during a holiday week so there are only 9 working days.

The bid package was put together poorly. They omitted many material specifications and dimensions. They listed the quantity as a "yearly" amount without the timing on how it would be shipped. (They expect us to sit on inventory for up to a year?)

Many of the items they requested require specific hardware components that will take at LEAST a week to get pricing on PROVIDING our suppliers are in the office for the fourth of July week.

It appears to me this bidding process favors the existing suppliers which is not favorable for the companies this third party is buying for. Whats the point in sending out this bid package if you are not going to allow companies to give you their best pricing? We will do our best to bid on it but nothing will be our best price.

Bottom line- This third party purchasing company is WORTHLESS to their client company. They are not going to get the best pricing for their client. They are sloppy in their approach to purchasing in that they can not even provide specifics on what they want quoted.
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Old 07-01-2013, 05:57 AM
 
Location: The Triad
34,090 posts, read 82,592,203 times
Reputation: 43651
Quote:
Originally Posted by Wartrace View Post
A little rant and confusion why a business would send out 175 different items for bid
and expect competitive prices in two weeks/
Unless these are custom manufactured...
it shouldn't take more than a day or two to run the stock numbers though.
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Old 07-01-2013, 07:33 AM
 
105,997 posts, read 107,954,552 times
Reputation: 79589
We run into the same problem. On large bids you need time to get special pricing agreements in place and that takes time with vendors.

Usually 2 weeks is fine to get things approved . you need to beat the vendors up for pricing as if you don't your competitor will and goodbye orders .

Certain vendors take a week or longer to get approvals , we run into this with siemens alot and siemens is a multi-million dollar line for us.

Ge can take a while too.

when doing large bids you need to get the vendors involved to hold prices as well for an agreed upon time.

since many manufacturers count on futures contracts to hold price volatility down they need to check on their end too.

I won't even bring up lighting manufacturers who farm you out to their reps. you can grow a beard waiting sometimes.

It is much quicker next time if you have the agreements and they just have to be updated.

Last edited by mathjak107; 07-01-2013 at 08:37 AM..
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Old 07-01-2013, 09:16 AM
 
Location: Wartrace,TN
7,955 posts, read 12,637,997 times
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Quote:
Originally Posted by MrRational View Post
Unless these are custom manufactured...
it shouldn't take more than a day or two to run the stock numbers though.
Every part is custom. There are no "stock numbers".
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Old 07-01-2013, 09:19 AM
 
Location: Wartrace,TN
7,955 posts, read 12,637,997 times
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Quote:
Originally Posted by mathjak107 View Post
We run into the same problem. On large bids you need time to get special pricing agreements in place and that takes time with vendors.

Usually 2 weeks is fine to get things approved . you need to beat the vendors up for pricing as if you don't your competitor will and goodbye orders .

Certain vendors take a week or longer to get approvals , we run into this with siemens alot and siemens is a multi-million dollar line for us.

Ge can take a while too.

when doing large bids you need to get the vendors involved to hold prices as well for an agreed upon time.

since many manufacturers count on futures contracts to hold price volatility down they need to check on their end too.

I won't even bring up lighting manufacturers who farm you out to their reps. you can grow a beard waiting sometimes.

It is much quicker next time if you have the agreements and they just have to be updated.
I'm just worried about the holiday week and our suppliers. It may take until next week to get quotes and this bid package is due Tuesday.

My rant is how poorly planned this bid was presented. If you give suppliers time to work through a quote it often results in the best possible pricing. If you rush them they are going to err on the side of caution.
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Old 07-01-2013, 10:46 AM
 
105,997 posts, read 107,954,552 times
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no one knows our business like we do. our customers think they give you a list ,punch it in and done.

they do not realize it can take many days and there are many steps and a cast of others involved in the quoting process if they are to get the right price.
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Old 07-02-2013, 11:00 AM
 
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,226 posts, read 80,405,058 times
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Sometimes there's a big rush job that shortens everyone's time along the way. If your company can't meet their time frame for the quote, someone else will. Good estimators are valuable employees. Hopefully you get it done and they give you a raise.
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Old 07-02-2013, 12:09 PM
 
Location: North Idaho
32,528 posts, read 47,585,883 times
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I would expect 2 weeks to be plenty of time. If you want the contract, you will get it done.

Unless it is some sort of custom construction, you should be able to put together the prices on 175 items in an hour or so.

Maybe your real complaint is that your boss won't let anyone use a computer.

Seriously, I would not pay a worker for 2 weeks if he couldn't find pricing for 175 items in that time frame. What exactly are you getting your salary for?
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Old 07-02-2013, 12:39 PM
 
105,997 posts, read 107,954,552 times
Reputation: 79589
you guys not in the business do not have a clue what is involved on these large bids.

as an industrial and commercial electrical supply distributor for 40 years I will tell you.

as I stated up above , any salesman that quotes a large project without going back to the vendors and pulls costs out of our computer should be fired.

you need vendor price protection agreed to for whatever the time frame is , special inside pricing usually that is not typical pricing and a commitment from the vendor to stock the items if the bid is awarded .

that hold up is generally on the factory end with the approval chain of command taking so long.

entering the list takes no time. it is always factory response time that holds things up..

typically they want to know the competition price levels on competitive items if the

customer is buying them, yearly usage , many times they even want letters from the

customer saying they want to do business with you just in case they have other

distributors already holding the contracts for those items.

it can be a long drawn out process to get a customer the lowest possible pricing levels.

if we are not given enough time we will quote based on our into stock cost and either lose the quote or else the customer accepts our price and doesn't save what they might have had the factory been given enough time to be involved.

most of the time the chain of command is a local rep who goes to a district manger who goes to the factory ,all of which can be like watching paint dry.

to the op, I know exactly what you are saying.

Last edited by mathjak107; 07-02-2013 at 01:24 PM..
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Old 07-02-2013, 01:36 PM
 
Location: Keosauqua, Iowa
9,614 posts, read 21,172,262 times
Reputation: 13663
Quote:
Originally Posted by oregonwoodsmoke View Post
Unless it is some sort of custom construction, you should be able to put together the prices on 175 items in an hour or so.
It is. All 175 pieces are unique to the application and built to order, and require component costs from suppliers who may in turn require component costs from their suppliers. Having worked in job shops for many years, I got that from the original post.

I'd pass on this project myself. If the customer is going to be unreasonable regarding the quote they're going to be unreasonable in their production demands as well.
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