Posted by James d on May 28, 2004, 10:00 pm, in reply to "Re: Parts supply"
Hi Phil
Exactly my point. If they are daft enough!
They are all chasing your parts pound, but the pressure to maintain their margin is making them look a cost reduction (or margin preservation measures) such as alternative supply.
I have been to the Far East recently and I can tell you that neither European (even the old Eastern Bloc) nor South America (Mexico)- the alternative to the 'traditional' supply chain - can hope to compete with these guys. The Asians will work all day every day, for two fifths of naff all, and without any HSE, human rights etc, and whistle while they work!
The parts suppliers have got themselves into a slightly untenable position with their cost base (although there is still fair margin to be made on 'wholesale' parts), and this is maybe why some of them are looking to diversify into other revenue streams (such as garage equipment).
When you deal with a commodity product, price is king, or you have to exploit other differentiators, such as deliveries every 10 mins, and complimentary sticky buns on a Friday (or win a free DVD/digicam/infotainment centre if you reach your target spend this quarter).