You get what you pay for

We are constantly in a battle, no not a battle, maybe a reality, no not a reality, maybe just the push/pull factor between the opposing forces as we continue to build a great organization. This struggle is consistent in most organization. It’s the old conundrum of pick 2 of the 3.

Whether an organization is buying products or services, we’re always considering the triangle of Price, Service or Quality.

  • Price would be the ability of a supplier of goods or services to provide their goods/service at the lowest cost.
  • Service is the quality of the service they provide. Telephone calls or emails returned in a timely fashion. Is the work done when they say they will have it done, or before?  Do you ever wonder if they are going to deliver what was promised?
  • Quality refers to the level of detail and quality that is provided.  This can be through fit and finish or the quality of the products.

The challenge is rarely do you get all three, hence the choose two. We, in the government (probably because we spend other people’s money) have been focused on cost. You have probably heard lowest qualified bid referred to. So many times the people lose out on either quality or the service proved. The little secret is the lowest cost is not always cheapest (ah, but that’s another blog).

It’s not just in government; some of my contacts inside the auto industry said the same thing happens across their industry. Drive cost down was the focus, no matter what the cost (contradiction intended). Yes, you can get widgets cheaper, but that in turn made the end product less superior (quality).

I am sure there are many examples in many organizations across the spectrum where you could point to examples of choosing the wrong two. Of course our goal is to hit all three, but it is a balancing act where the pendulum can swing too far towards one of the three and throw the triangle out of whack (technical term). Our goal is to provide the highest level of service and the highest quality for the best price. The qualifier here is best price, not necessarily lowest.

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  • Peter Auger, Auburn Hills City Manager

    Peter Auger, Auburn Hills City Manager

    Thoughts on running a city, daily musings, and everything in between.