Is it really about Quality – or is Cost the Driving Force ?

Over the years, there have been many instances where we’ve queried what our customers expect regarding product quality and cost.

Typically, everyone wants Rolls Royce quality, at British Leyland (who are they ! – google it!) prices. But does it really work out like that?

We introduce all sorts of systems to ensure quality – using the best tools, materials, processes, equipment and staff – and then include things like non-contact measurement, photo-video inspection etc etc. But all these things come at a cost – and are they really necessary?

Today, as we contemplate the purchase of yet another new machine – where the only real skill required will be in raising a CAD image of the product – we’re all being pushed by customers to make things cheaper and cheaper, in the hope they’ll win out over the competition.

The twists of quality and price-down pressures

We’ve seen many examples over the years where cost has become paramount over quality – and vice-versa.

This year for instance, we tendered for work – around £350k per annum – where we matched target prices on more than 50% of the products. The remaining products were being supplied at below our material cost – so we offered our best prices, but obviously we needed to make some profit from the work.

The customer had also asked other suppliers, so in turn had given their best prices and overall the buyer then had new target prices for his existing supplier to meet to ensure they retained the business. This means that they in turn have now had to offer a price-down for 2021 to retain the business and now have to produce many items below cost. In turn, to make these prices achievable, the lowest possible quality materials are now being used.

In turn, the customer has now hit his lowest possible UK cost prices for his components – meaning that there is now only one option for increasing profit further – and that is to close down production here in the UK – and move their entire manufacturing facility to the Far East!

By no means is this ‘sour grapes’ on our part – it is not business we’ve ever had, so there’s no loss to us – it is simply sad that another well-know British brand is now leaving our shores to be made overseas.

When Quality isn’t always the issue.

Several years ago, faced with a sealing issue on diesel engines with several gaskets – I realised that the standard ‘controlled swell’ materials being used, simply were not swelling enough. The material being used was simply too good quality-wise!

So – after trialling the lowest cost and quality material we had at the time – which effectively reacted with the various fluids in the engine – the leakage issues were almost totally eliminated as the new material swelled with the oils and greases, expanding to the extent that any gaps were simply filled with the swollen gasket!

Here we saw a case of quality being important – but in this instance, the lower the quality – the better!

In turn, it allowed for the parts to be made with both lower costs to the customer – but also a higher return to the supplier – our material GP ran up towards 78% for several years – something unheard of in the gasket trade – especially with a customer using more than £1.5m of parts per year!

Contact Us

Give us a call, or email us with your particular enquiries – both Quality and Price are important to us – and we always strive to give the Very Best Value for Money !