By Dr. Jerusha Myrick
Every purchasing agent has been told the same thing: “Get the lowest price.” On the surface, that sounds like good business. But if you’ve been in manufacturing long enough, you know e sometimes the “cheapest” part ends up being the most expensive decision you make.
It’s Not Just About the Part
When a quote comes in lower than the others, it’s tempting to move fast. Check the box. Hit the cost target. Keep things moving. But that one decision doesn’t live in isolation. It ripples through your entire operation.
From a systems perspective, that lower price can trigger a chain reaction:
- Delays on the floor because parts don’t fit quite right
- Extra labor for rework or adjustments
- Increased scrap
- Missed deadlines
- Strain on supplier relationships
And none of those show up on the quote.
The Real Cost Shows Up Later
We’ve seen it happen more times than we can count. A company saves $0.20 per part. Looks like a win.
But then:
- The parts require additional handling
- Production slows down
- A rush order gets triggered
- Expedited freight gets added
Now that “savings” turns into thousands of dollars in hidden costs.
Reinforcing the Wrong Outcomes
In systems thinking, we talk about reinforcing loops. If a purchasing team is consistently rewarded for lowest piece price, they will keep selecting the lowest bidder. But if that decision leads to more problems downstream, the system quietly gets worse over time. It causes more firefighting, less predictability, and increases pressure on teams. Often, no one can quite pinpoint why.
What High-Performing Teams Do Differently
The best purchasing and operations teams don’t just ask, “What’s the price per part?” They also ask, “What’s the total impact of this decision?” They look for suppliers who deliver consistent quality, understand production realities, communicate early and clearly, and help prevent problems instead of reacting to them. They know reliability is not an added bonus, it is part of the cost structure.
A Better Question to Ask
Next time you’re reviewing quotes, ask, “Which option gives us the most stable, predictable outcome?” That’s where the real savings are.