You can’t fault people for trying to find your company the best bargain … unless it creates more expensive problems.
That’s the problem one controller we know was facing.
His company’s purchasing department was top-notch at securing lower prices. Unfortunately, not all of those purchases were the best for their company.
Any front-end savings were lost when the company wound up spending double on re-work to make up for lesser quality products.
Clearly not everyone understood that the total value of a purchase was more than just the price they secured.
So they came up with a way to do drive that message home.
Let them see for themselves
The key: Get purchasers away from their desks and on the production floor.
That would let them see first-hand the problems that the cheaper materials caused manufacturing and the final product.
The message? Cheaper isn’t always better.
Of course, we still encouraged them to seek out cost-effective deals. Just as long as they kept the big picture in mind. (Something that was easier to do now that they saw the consequences with their own eyes.)
The message stuck at this company. Granted, purchasing costs rose a bit, but they were able to reduce back-end expenses by a whopping 50%.