Put quotations on the same basis
Compare specifications, volumes, delivery terms and payment periods. Show product prices, tooling, transport, duties and agreed inspection costs separately. Keep unknown items visible instead of silently treating them as zero.
Distinguish cost from capital tied up
Total procurement cost and the duration of capital tied up are separate measures. Record payment timing, transit time and inventory. Shorter capital tie-up improves access to funds; it does not automatically create an equivalent cash saving.
A sound basis for comparing quotations
Begin with the same specification and volume assumptions. Keep unknown cost items visible instead of treating them as zero.
- Product and tooling
- Compare specification revision, material, annual volume, minimum lot size, tooling cost and ownership.
- Quality and evidence
- Include inspection scope, sampling, required evidence and the response to non-conformities in the quotation.
- Transport and import
- Compare delivery terms, packaging, route, insurance and applicable import costs on the same basis.
- Capital and inventory
- Show payment milestones, transit time, safety stock and financing separately from the unit price.
Award decisions should consider technical equivalence, total costs and supply continuity together. A lower unit price alone does not demonstrate savings.
Two separate client projects
Large building materials manufacturer · Asian procurement
In this project, total procurement costs were sustainably reduced by 13%, and the average duration of capital tied up was reduced by 23 days. The cost comparison covers total procurement costs on an annual basis.
View the case study ↗Automotive supplier · Welded assemblies for a German vehicle manufacturer
Total procurement costs in this project were reduced by 27% while maintaining the required quality standards. The cost comparison covers total procurement costs on an annual basis.
View the case study ↗These statements concern individual anonymised projects. Results are project-specific and are not a promise for future assignments.