Coping With Price Pressures

For Manufactures Only Coping With Price Pressures By Richard Rowe April 2001 One manufacturer spoke with such feeling about the subject of price pressures that we let him have the column all to himself for this issue. Although we have retained...

Each manufacturer might use the same general nomenclature to describe a particular product, but the technology used, features included, true quality, overall reliability, genuine product support capability, and the real cost to produce their products, can and does vary greatly.

Most airlines contract a third party A& E to determine the product's specification. This results in an RFQ/tender with a vague specification that consists of a conglomeration of excerpts from various manufacturers' product literature (whether true or not) about their capabilities or features. The tender ended up calling for a piece of equipment that was either technically impractical/unrealistic, did not exist, or could not be met completely by any one, or worse yet, by just by one questionable manufacturer. In some cases, the tender specified a system or product that was not even properly designed or suited for the application. You don't ask for a motor cross jeep when you want to drive the autobahn at 200 mph, or ask for a Mercedes to run the Baja. It is like an airline asking for an airplane with a Boeing fuselage, Airbus wings, a MD landing gear, and Lockheed tail section. All of which must travel through the air at 1,000 Knots per hour, fly around the world without refueling, and be propelled by solar cells. After all, the parts and technologies do exist, so why can’t you put them all together, and don't you dare take an exception to the spec or we’ll disqualify you.

In many cases, the writer of the spec is either not the end user, or up-to-date on what is available on the market. Many are not specialists on that product, or were just trying to be fair by including everyone in the spec. Worse yet, they could create a situation that might be construed as being politically influenced or simply used to drive down the end sell price.

The real technology specialists are the manufacturers' design engineers, not a general product spec writer or the over worked airline GSE manager. The airlines need the very best technology to support their aircraft and keep their GSE departments running smooth. But, in many cases, they are forced (by the lowest price pressures) to accept equipment that is technically unsuited and/or gives them nothing but trouble, costs more in the long run, and can ruin their image or on time departure record.

So, what is my suggested solution? First, it would be in an airline's best interest to have their GSE managers and experienced engineers (or their A&Es) thoroughly investigate the products available by visiting a manufacturer's facilities on a regular basis. Then, qualify each manufacturer's capabilities in terms of their technology, special features, and performance capabilities. They could then better understand whether it is indeed a quality product, confirm that the equipment can do what the manufacturer says it can, and determine how much the product would cost to maintain.

Then, just maybe, the airlines could save some money. Find out if the manufacturer offers a complete maintenance and service contract which would guarantee a product’s performance for many years. Believe it or not, companies like this do exist. I know because I work for one. The airline should also look at the manufacturer's years of experience in that technology field, although longevity alone does not always mean they have kept up with the latest technology advancements or have the support infrastructure in place. Airlines should evaluate the manufacturer's financial resources and stability, as well as product support capabilities and general business practices before they begin to consider their products. A second step would be for the airline to determine their real operating requirements for that product. Also, take into consideration both the standard and optional features and determine the benefit they can provide in terms of safety, reliability, and ease of management.Airlines and A&Es should not tell the manufacturer how to build the product or what technology to use, and certainly not what parts to use, because then the customer becomes the novice design engineer and is unlikely to request a product with the best design features.

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