$107.23 and $12.63... Valid Prices for the Same Part?


We recently sourced a complex machined part, which is integrated into an even more complex medical device. Difficult-to-source tungsten alloy, five axis machining, very tight tolerances and granular testing requirements.

We reviewed the drawings and specification and sent the requirements (ten piece sample order, followed by a one hundred piece proof of concept order and then volume breaks at 20K, 50K and 100K) to five high end machine shops that we know well.

We expected that the quotations would be grouped in a +/-5% range… We were wrong.

The highest price was $285.00 per unit. Then we received two quotes around $125.00, one more at $107.23 and the last quotation at $12.63.

We tossed out the first quote as a prime example of ‘The Stupid Price’. A typical response would lead many of us to throw out the ‘low ball’ price and select one of the prices and vendors in the middle of the pack.

We dug deeper and learned that the low cost supplier is vertically integrated. They control everything from mining, to smelting, to casting and all the way on to machining and finishing. As tungsten is a strategic material, the market for the metal and related alloys is often fragmented and difficult to understand.

Identifying a machining vendor that had their own source of supply took an enormous amount of cost out of the equation.

The takeaway is that responsible sourcing directs us to always get more than one quote and not to throw out the lowest price.


Jack Daniels

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