October 12, 2022
Every order a company takes involves risk. Even after they ship, products are subject to warranty claims and, in the event of customer bankruptcies, the dreaded “claw back” of money already received. The first category in our inquiry evaluation system is financial risk. The ideal job, one to be given 5 points, does not require the purchase of new tools, machines, or even raw material. If a project could be completed using existing capabilities, it made sense to quote it aggressively. If a lesser level of expenditure was needed, 3 or 4 points might be assigned. The lower numbers, 1 or 2 points, would be given to jobs that needed “up-front” money that could endanger existing relationships with suppliers. Unless progress payments could be negotiated to cover pattern or die costs, for example, it was not practical to take those orders. We routinely no-quoted projects that were from new customers who could not, or would not, pay for tooling or raw material separately. To do otherwise makes you an investor — not a vendor. We viewed Technical Difficulty separately from Financial Risk. The assignment of points was less dramatic within this category as we usually had no-quoted the truly oddball inquiries, e.g. — perpetual motion machines, unobtainable materials, micro machines, gigantic machines. 5 points projects that were within the capabilities of most gear shops 4 points projects that were routine to us 3 points projects that would require special handling by us 2 points projects that would challenge our capabilities 1 point projects that had tolerances we hadn’t seen before 0 points projects that required features we doubted any shop could hold The next blog installment will continue with the Suitability category.