Three Reasons to Consider More Than Price When Choosing Vendors

In the last Homestead Post, we shared three productivity- and quality-boosting principles from management consultant W. Edwards Deming. In this issue, we’ll talk about another important Deming concept: End the practice of awarding business on the basis of price tag alone.

When choosing vendors, price means little without considering the measure of quality and efficiency that you get. Securing value when purchasing tools, equipment, materials, or services requires long-term thinking beyond the dollars and cents on a price sticker.

Buying goods or services from whoever gives the lowest price may seem to be a cost-effective way to do business. However, it can backfire.

  • Jumping from one vendor to the next based on prices requires a good deal of administrative time and may result in getting inferior materials.
  • In comparison, having a single, trusted source for a product or category of products helps ensure consistency in quality and availability of materials to meet your needs and deadlines.
  • Dealing with one vendor simplifies accounting, minimizes paperwork, and streamlines ordering.

In today’s competitive business environment, you can find a lower price on almost anything that you want to buy—but that doesn’t ensure value. Value comes from forming a long-standing relationship with a vendor that is dependable, trustworthy, and dedicated to satisfying your needs.

To learn more about Deming’s principles, visit The Deming Institute website at www.deming.org.