Management of oil contaminated sites P.18
See also
of how much grease each truck consumes.
If dispensing equipments are available, the
most convenient pack sizes would be drums.
Price and payment terms
Convenience is
determined by
factors such as, in
what quantities
will the product
be issued from
the stores to the
maintenance section,
what dispensing
units are available
and the available
storage space
January-March 2012 | Lubezine Magazine
yard and owns this stocks. From this stock,
the customer picks products based on their
immediate requirement and will accordingly
be invoiced for this quantity only. Consignment stocking eliminates the need for the
customer to worry about his stocks levels as
whatever runs out is quickly replenished from
the suppliers stocks on site.
Stocks keeping units (sku)
The supplier should supply products in
convenient pack sizes. Convenience is
determined by factors such as the quantities
in which the product will be issued from
the stores to the maintenance section,
what dispensing units are available and the
available storage space. If for example grease
is required regularly for application on wheel
bearings of trucks, small pack units say 3kgs
would be more convenient than larger packs
of 18 kgs as they would allow easier tracking
In a largely competitive market like ours, it is
likely that products meeting the same quality
levels would be in the same price range.
The competitive advantage of one supplier
over the other in terms of prices is thus of
minimal benefit. Price should therefore not be
accorded higher importance than the other
factors highlighted above. What would be
more important are the payment terms the
supplier is willing to extend.
Once a decision has been arrived at, it
is equally important to decide on whether
to go for a long term supply contract with
one supplier or to do spot purchasing every
month from a number of prequalified suppliers. Where supply is to be done through a
long term contract with one supplier, benefits
such as technical support and equipment
installations can be gained. The disadvantage
is that incase the sole supplier runs out of key
products, the operations of the organization
will be affected.
For spot buying, supply is always done on
the basis of lowest prices and is based on
the immediate needs of the company. For
example, if a construction company requires
8 drums, they will consider prices from a
number of prequalified suppliers and award to
the cheapest.
However, this arrangement rarely comes
with a comprehensive technical support or
lube dispensing equipment package. Also,
in case of a lubricant’s related problem
occurring in the machinery, it is impossible
to pinpoint which lubricants brand were
responsible.
Additionally, cases of different lubes
brands being mixed in application can occur
resulting in some undesirable effects.
The purchase decision for lubricants has
many factors to be considered and only by
getting the correct mix will the maintenance
needs of an organization be met at the most
efficient, professional and cost effective
manner.
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