I faced an interesting case of procurement challenge as lead design engineer in one of my current projects. The bill of materials (BOM) of a few hundred of items was sent to our preferred overseas supplier and over a week period they sent back an original quote and a revised version of it. The items included assemblies, subassemblies and parts that were grouped in a few categories. The PM asked me to review both quotes and confirm we could cut the PO and move on to the next stage.

I am not sure what the conversation was between parties to generate the second quote; all I know is the second one was quite different, result of a possible communication problem. We all know written communication has its severe limitations and when you include different cultures, the potential for misunderstanding is quite high. The original quote was decent with a few expected mistakes in need of fixing. The second quote however was broken down in a very weird way. Putting them side by side you could tell the supplier was trying to achieve something he was told to, just to offer a completely mangled result in exchange. Items were mixed randomly between lines, descriptions were changed around between subassemblies and their components, plus some dollar figures were simply wrong. I did a review and provided feedback to the PM and supplier.

The third quote came back and at first glance it looked much better. The mixed items were fixed, descriptions corrected and a number of dollar figures were back where they were supposed to be. The amounts looked right as well. Do you know what detail caught my attention and made me examine the quote with care? The total amount quoted was identical (to the last cent) with the second quote. How could this be when the second quote had so many errors in it? Whoever did the quoting, also did a bit of Houdini work. You could see a funny rule developing: there were items in the original quote and the second one with different prices; in the third quote the higher price per item from previous quotes was used without exceptions. Given this detail it is indeed Houdini work to land on the same dollar figure.

Anyway the project is moving forward. Small details like including bolts in the quote but excluding the matching washers and nuts are still puzzling, but this is easy fixing. Since the project is for a product new to me, I am happy to be in the position to solve such challenges and learn the nuts and bolts of it. I can say “more news is good news” in this case!

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