Cheap or fast and reliable? Why you don’t just have to choose one

03.09.2019

 

“I want it to be good, I want it fast and I want cheap!”

That’s quite a common request, but as we examined in a previous post, that doesn’t make it any more realistic. In many scenarios, when it because clear that you can’t have all three, ‘cheap’ becomes the priority.

That’s when people forget how time sensitive transportation can be, or how capacity constraints can kick in at just the wrong time. Taking a big risk to save some money isn’t usually a good idea.

 

‘Cheap’ can end up costly

So let’s say you’ve just received what looks like a competitive tender. At first glance the price looks good. Really good. However, there are a few red flags - On your biggest lane, the transit time is longer than the current transit times. Also, the capacity offered, doesn’t match your requirements for a few very busy days.

Now you have two options: You ignore these details and hope it will all work out – this choice could come back to haunt you once the operational business starts. Or you do the opposite. You don’t consider the offer at all and you might miss out on a good opportunity to reduce your costs.

 

A deal that works for both parties

But isn’t there a third option? Of course there is, and, as so often in life, it is all about finding the right balance. What you can do in our example is adjust the offer by taking into consideration the charges that might occur for any additional day beyond your current lead times. Or add a fee when your capacity needs are not met.

For example, when the current lead time is three days, but you have a real good offer based on six days. You know that each additional day above the current lead time costs you a certain amount per day. Now you can include this amount in your calculations and “balance out” the offer. The price is not that great anymore, but possibly still better than other offers you have received based on the current lead time of three days.

What’s that? You don’t want to spend the whole day working on adjustments? Then we have good news for you: you don’t have to! TenderEasy makes it really easy to apply any adjustments in form of a bonus or malus.

Just reach out to us on annukka.jaeger@tendereasy.com if you want to know more!

 

Written by
Annukka Jäger

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