I was on the phone with a supplier and wanted to argue with him. It took immense self-control.
We needed an actuator for a maintenance project, so I called the supplier for a quote.
The actuator cost between $15,000 to $25,000 depending on the condition.
He had one serviceable (SV) and overhauled (OH) unit.
He asked me what condition I preferred. I told him it depends on the tag date, but I prefer overhauled.
In a quick reply, he said he had both, but he’ll quote SV as why would I pay for OH when SV costs less?
His SV unit had a 2014 tag.
My response was, “that’s not accurate.”
Hidden costs are everywhere.
He then asked me if I buy a car with the most repair work done?
Of course not, but I want good tires, a well-maintained engine, an interior that’s not torn, a radio that works, and a car that doesn’t break down.
Not a car that was only verified to turn on.
It will cost me more money over time to own a car that wasn’t maintained.
The car can break down.
It could leak oil.
It might need new tires.
This view is flawed, one that many people believe, a cheaper “price” is always better.
His SV unit, since it was only functional tested, could fail on install. He said it comes with a warranty, but that doesn’t help everything.
The failed unit will incur additional shipping costs. I might need to find another aircraft component to avoid a possible AOG while this unit goes through warranty consideration.
Or maybe the unit has an early removal due to an issue.
It all costs money.
Just because something is cheaper doesn’t always make it better. It can make things a lot worse.
The real determination is the total cost of ownership or total material costs
When purchasing aircraft material, you have to look at the bigger picture. The cheapest price component can cost you the most money.
It’s confusing if this is the first time you’ve heard that.
In my earlier story, the older SV unit could fail on install.
I would then need to spend my teams’ time coordinating warranty, spend money shipping the return unit back and forth, determining if the aircraft is AOG and spending the time resolving an AOG.
My “cheaper” unit got costly.
I also look at the overall service level of my suppliers.
Are they easy to communicate with? Do they help me resolve issues? Do I have terms with them?
If not, these things lead to issues and issues, cost time and money.