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Applying W. Edwards Deming to Small Business Management
 
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Cost Verses Price

 
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Louis Altazan



Joined: 15 May 2007
Posts: 774
Location: Baton Rouge, LA

PostPosted: Mon Nov 12, 2007 3:34 pm    Post subject: Cost Verses Price Reply with quote

There is a shop down the street and they sometimes bring vehicles to us. Today they dropped a Chrysler to have the instrument panel flashed. The shop owner asked what type tool they would have to have to be able to flash the vehicle? I told them we used the OEM scan tools. “Man, I can’t afford that!”

While they were here, a local dealership delivered a window regulator. As soon as the delivery person left, the shop owner told me, “ You know you can get those aftermarket, they’re much cheaper.” I told him I appreciate the tip, but, I couldn’t afford to use the cheaper part.

He looked a little confused. Again he offered, “You do know the aftermarket part cost a lot less?” Well, I know the price is less, but I find the cost is much higher than I can afford. At this he gave up, with “Give me a call when the instrument panel is done.” “I sure will, thanks.”

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Louis Altazan
Owner/Manager AGCO Automotive Corporation
Baton Rouge, LA
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MattFMN



Joined: 15 May 2007
Posts: 146
Location: Garden City, KS

PostPosted: Fri Nov 16, 2007 11:51 am    Post subject: Reply with quote

Spending money the right way the first time often means you'll only be spending your money for that item or service once. Businesses and clients often can't see that. I guess, just because people can "see", doesn't always mean they "look".

It can be seen in products/parts we use and sell. Installing a sensor twice because it didn't repair the problem, or worse yet created a different problem. Warranting a water pump because it failed before the part's warranty or the shop's warranty expired. You know the drill.

We also see it in equipment. As Louis mentioned in his post, a module is replaced (in that case it was the Instrument Cluster) and now the shop still can't finish the repair because the module requires programming, initializing, or coding. This costs time because the vehicle needs o be driven somewhere and finished for them. There are also many tests available to OE scan tools that aftermarket tool manufacturers saw fit not to include in their tool. This costs time.

How can anyone afford not to spend their money or invest their time wisely?

Nice post, Louis. Later, Matt.

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Matt Fanslow
ASE CMAT/L1
Crag-Technologies, Inc
www.wavehook.com
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Louis Altazan



Joined: 15 May 2007
Posts: 774
Location: Baton Rouge, LA

PostPosted: Sat Nov 24, 2007 9:31 am    Post subject: Reply with quote

Hi Matt,

MattFMN wrote:
How can anyone afford not to spend their money or invest their time wisely?


Excellent question. Deming always asked, "Doesn't anybody care about making a profit? Thanks Matt, I appreciate the reply.

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Louis Altazan
Owner/Manager AGCO Automotive Corporation
Baton Rouge, LA
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