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Our contract with one of our biggest vendor has expired. They've put it out to tender meaning that any company can throw their hat in the ring, whoever comes in with best price wins the new contract.
Okay, pretty standard, now we hit out snag. Our old contract gave them an hourly rate, they send a plan to us, we evaluate and give a price based on our time and manpower estimates. (Honestly, I don't know how that whole process got sorted out, but things did work). But now they want menu pricing, a set rate for anything we have to do. So diving into this:
For starters, they are no longer allowing dispatch fees. Okay, we do jobs province wide, even country wide. The dispatch fees cover the cost to drive the distance to where the job is located. They expect us to charge to same to do a job across the street as we would for a job 100, 500, 2500 km away. I don't know how that can possibly work, or how anybody can fail to see the problem here.
So there's problem #1. There's hundreds or even thousands of dollars in potential expenses that they want us to factor into the menu price, or it's a local job and those expenses are not there. Set the price too low, you lose money on every job. Set the price too high, you get out bid.
The real problem comes with the work once we get there. Furniture comes in all sizes, all configurations, there are literally tens of thousands of possibilities. Granted it's all relatively the same, but each potential component adds to the workload. A dozen small pieces easily fit on one truck and can be handled by 1 or 2 guys. A dozen large pieces can fit on 1 truck, but might need 2 or 3 or 10. And the order will be for 1 unit, or 2 units, or 100, or 1000, or 100 000. We need to set a price for each one of the potential thousands of configurations, then set a price factoring in all expenses associated with getting the product where it needs to go.
Then we get to accessories. Keyboard trays, monitor arms, other various add ons. Okay, once I'm on site and set up where I am, these are small tasks. So if it's a complete furniture install and they want a monitor arm added to the new desk, that's adding 5 minutes on to my time to complete the job. But what about when it's something existing and one of these accessories is added as it's own order. Okay, I've got to drive there, creating vehicle expenses as well as the time required, then I've got to get set up, then I've got to do the 5 minute job.
On top of wanting this 1 price for all contingencies, they also want comparables. They want us to provide them with invoices of previous jobs showing what we have charged for the work they are requesting. Okay, that's none of your damn business. Whatever factors we have to decide a price for that client are independent to that client. If you are worried that we are trying to price gauge you, that is why this contract goes out to tender, so that you can get multiple prices and compare things that way.
So this is the headache that my boss is facing. Consider a list of infinite possibilities and expenses, and set a price that will win us the contract and won't bankrupt the company.
Which brings us to the MiM portion of the story. While I do often butt heads with my boss, I do genuinely like him, and feel great empathy and sympathy for him. The whole company revolves around him and he's got to hold it all together. He is ridiculously overworked at the best of times. So there's that. Then there's the fact that one of the office workers just left. He assisted in these operations, getting the groundwork done and presenting things to my boss and the president at a 50-90% completion level. He's gone, so it's up to my boss to do the whole thing.
So what better time for the president and vice president to take a holiday. My boss has to handle his duties, their duties, and has all this dropped in front of him. I have no idea how he is keeping it all together, and I don't know if he can. This is a make or break opportunity for the company and they are off sipping margaritas.
Okay, pretty standard, now we hit out snag. Our old contract gave them an hourly rate, they send a plan to us, we evaluate and give a price based on our time and manpower estimates. (Honestly, I don't know how that whole process got sorted out, but things did work). But now they want menu pricing, a set rate for anything we have to do. So diving into this:
For starters, they are no longer allowing dispatch fees. Okay, we do jobs province wide, even country wide. The dispatch fees cover the cost to drive the distance to where the job is located. They expect us to charge to same to do a job across the street as we would for a job 100, 500, 2500 km away. I don't know how that can possibly work, or how anybody can fail to see the problem here.
So there's problem #1. There's hundreds or even thousands of dollars in potential expenses that they want us to factor into the menu price, or it's a local job and those expenses are not there. Set the price too low, you lose money on every job. Set the price too high, you get out bid.
The real problem comes with the work once we get there. Furniture comes in all sizes, all configurations, there are literally tens of thousands of possibilities. Granted it's all relatively the same, but each potential component adds to the workload. A dozen small pieces easily fit on one truck and can be handled by 1 or 2 guys. A dozen large pieces can fit on 1 truck, but might need 2 or 3 or 10. And the order will be for 1 unit, or 2 units, or 100, or 1000, or 100 000. We need to set a price for each one of the potential thousands of configurations, then set a price factoring in all expenses associated with getting the product where it needs to go.
Then we get to accessories. Keyboard trays, monitor arms, other various add ons. Okay, once I'm on site and set up where I am, these are small tasks. So if it's a complete furniture install and they want a monitor arm added to the new desk, that's adding 5 minutes on to my time to complete the job. But what about when it's something existing and one of these accessories is added as it's own order. Okay, I've got to drive there, creating vehicle expenses as well as the time required, then I've got to get set up, then I've got to do the 5 minute job.
On top of wanting this 1 price for all contingencies, they also want comparables. They want us to provide them with invoices of previous jobs showing what we have charged for the work they are requesting. Okay, that's none of your damn business. Whatever factors we have to decide a price for that client are independent to that client. If you are worried that we are trying to price gauge you, that is why this contract goes out to tender, so that you can get multiple prices and compare things that way.
So this is the headache that my boss is facing. Consider a list of infinite possibilities and expenses, and set a price that will win us the contract and won't bankrupt the company.
Which brings us to the MiM portion of the story. While I do often butt heads with my boss, I do genuinely like him, and feel great empathy and sympathy for him. The whole company revolves around him and he's got to hold it all together. He is ridiculously overworked at the best of times. So there's that. Then there's the fact that one of the office workers just left. He assisted in these operations, getting the groundwork done and presenting things to my boss and the president at a 50-90% completion level. He's gone, so it's up to my boss to do the whole thing.
So what better time for the president and vice president to take a holiday. My boss has to handle his duties, their duties, and has all this dropped in front of him. I have no idea how he is keeping it all together, and I don't know if he can. This is a make or break opportunity for the company and they are off sipping margaritas.
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