Candle is Burning

Posted by stephens on Jun 11, 2009 in Automated Transactions, Rants, Tips & Techniques, Web Technologies | 0 comments

Die shops and components suppliers have been doing business the same way pretty much since the Candlestick telephone was invented. The last game-changing technology revolution to hit this space was the fax machine.

The Request For Quotation (RFQ) process sucks. It is error-prone and time-consuming for the buyer of tooling components. It is labor-intensive and high-risk for the seller of tooling components. The process is a lose-lose.

I often equate the RFQ transaction to the Candlestick telephone. In those days, the transaction between callers was interrupted by the switchboard operator. Speaking with the operator first is a barrier to what the caller really wants: to speak to the person they called.

If the person did not answer, one had to call back three times to communicate their message. It is like sending out three quotes: you hope to get one response as quickly as possible.

The reality of quoting is this: at a $65 burden rate, it costs the buyer of tooling components $1 per minute per person just to purchase something.

The adage is spend money to MAKE money, not spend money to spend MORE money.

The seller of tooling components has the same problem: burn $1 per minute per person to quote jobs that they have a 33% chance, at best, of closing.

The die industry needs a new phone.

The key to increasing the competitive strength of manufacturing is to automate custom transactions in the front office.