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byHoratio/Tools/03 · Supplier reach

How many suppliers can you afford to ask? Slide it and see the ceiling.

Every supplier you ask for a price is another enquiry to assemble by hand and another set of replies to read and retype. That is why buying quietly gets rationed to three. This shows what each extra supplier costs in office hours, what ten would take, and why asking the whole database by hand is not a decision but an impossibility.

Tool03 · Supplier reach ceiling
InputsYour load, your database, your minutes
OutputHours and people per supplier asked
Proven inCase study 002
CostFree · nothing stored
Line-quotes lines × loads × suppliersEnquiry hours copies × minutesRetype hours replies × minutesPer extra supplier about 120 hours a yearWhole database full-time people, not hoursOne press zero Line-quotes lines × loads × suppliersEnquiry hours copies × minutesRetype hours replies × minutesPer extra supplier about 120 hours a yearWhole database full-time people, not hoursOne press zero

Nobody decides to ask only three suppliers. It happens because the fourth costs another email assembled by hand from the same lines, and another set of replies read and retyped — so the working day sets the number, not the buyer. This shows the hours behind each supplier asked, what ten would take, and what asking everybody would take, which is the number that explains the whole thing.

To ask the whole database by hand

Your buying · ten numbers

Your buying
The manual method
%
£

The ceiling · full-time people

—to ask your whole supplier database by hand, every line, every load
Line-quotes a year, at the suppliers asked today
Office hours a year, today
of which reaching suppliers
as wages
Each extra supplier asked costs
Asking ten suppliers a line
as full-time people
Asking the whole database
as wages
Asking any number with one press
Full-time people to ask the whole database by hand
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Pre-filled from case study 002, a UK horticultural importer buying from European growers. Nothing you type is stored or sent anywhere.

What the number means

  • Each supplier asked costs a fixed number of office hours per line: the minutes to copy the line into their enquiry, plus the minutes to retype the price that comes back. At the defaults that is about 119 hours a year per extra supplier.
  • Asking three growers a line for 2,800 lines a year is 8,400 line-quotes and about 800 hours. Ten is a full-time person. The whole database of 100 is 7.5 full-time people — not a choice, an impossibility.
  • With a pricing page per supplier, the enquiry costs the same whether it goes to three or a hundred, and the prices land in a comparison matrix rather than an inbox.
  • A supplier who was never asked cannot undercut the one who was. The margin cost of the ceiling is invisible on any timesheet, which is why it survives.

How is the supplier ceiling calculated?

Line-quotes are the unit that matters: one line, asked of one supplier, once. Multiply lines per load by loads a year by suppliers asked and you have how many of them your office produces. Each one costs the minutes to copy the line into that supplier's enquiry, and — for the share that reply — the minutes to read the answer and retype the price somewhere it can be compared. Add the buying admin that does not change with reach, and that is the year.

The interesting line is the marginal one. Because every supplier you add multiplies the line-quotes, each extra supplier costs the same fixed block of hours — at the defaults about 119 a year. That block is what a buyer weighs, without ever writing it down, when deciding whether to ask a fourth. Three working weeks of copying and retyping for a price that might be a few per cent better is a bad trade, and they are right. The problem is not the judgement; it is the price of the enquiry.

Why does this stop being an admin story?

A grower who was never asked cannot undercut the one who was. Every line quoted against three suppliers instead of a hundred carried an invisible margin cost that nobody could see, price or argue with — and in the busy season, when stock is short, the difference between asking four and asking a hundred is not a better price. It is whether the order can be filled at all.

In the importer this tool loads with, one press now sends every supplier on the route a password-free pricing page of their own. Their answers land in a comparison matrix labelled as theirs. Reaching the whole database costs exactly what reaching three used to, and the system counts the difference between the dearest offer and the one taken — a number that could not exist until the enquiry became free.

3 → 100+growers asked, at no extra cost in office time. About 280,000 line-quotes a year of reach, against 8,400 before.

A worked example

The defaults are the importer's own. Fifty-six lines a load, fifty loads a year, three growers asked: 8,400 line-quotes. At a minute and a half to copy each into an enquiry, a 70% reply rate and a minute and a half to retype each price, that is 357 hours of reaching suppliers; add 444 hours of the buying admin that does not change with reach and the year is about 800 hours. Each extra grower adds 119. Ten growers is 1,634 hours, one full-time person. The whole database of 100 is 12,344 hours — 7.5 full-time people, which is why it has never been asked.

What does the number leave out?

  • The negotiation saving. This tool prices the hours; it does not estimate what wider comparison saves on the stock itself. That number should come from your own system, counted per line, not from a calculator.
  • Availability. At peak, the supplier you never asked may be the only one with the stock. That is worth more than any price difference and is not in the total.
  • Quality of the comparison. Prices retyped into a spreadsheet get compared badly, or not at all. A matrix with the best matched-specification price highlighted is a different decision.
  • The concurrency. The importer has 78 orders live at once and 150 at peak. A workbook holds the rows; it cannot tell you where each has got to.

What do you do with the number?

Slide the suppliers-asked figure up to your whole database and read the full-time people. That is the size of the comparison you are not making, and it is not a discipline problem. The fix is a pricing page per supplier so the enquiry costs the same at any count — which is what the operations audit would map first in a buying operation, alongside the concurrency and the goods-in evidence. The cost of standing still does the same job for quoting, and the short version of the method is on the byHoratio homepage.

Questions people ask about comparing supplier quotes

How many suppliers should you get quotes from?

As many as you have, once the enquiry costs the same whether it goes to three or a hundred. Under a manual method the answer is set by the working day rather than by judgement: each extra supplier means another enquiry assembled by hand and another set of replies retyped, at the defaults about 119 office hours a year. That is why most buying is rationed to two to four, and it is why the calculator expresses the whole database as full-time people rather than hours.

What is a line-quote?

One product line, asked of one supplier, once. It is the unit that actually costs office time. Fifty-six lines a load, fifty loads a year and three suppliers is 8,400 line-quotes; the same with the whole database of a hundred suppliers is 280,000. The manual method pays per line-quote; a pricing page per supplier does not.

How do suppliers price without an inbox in the middle?

Each gets an unguessable link to a page showing only their own lines. They enter a price, mark anything unavailable, adjust the specification if they would supply something slightly different, and add a note. Their answers land in a comparison matrix labelled as theirs, and a blind save can never overwrite a supplier's own answer. A supplier who telephones has their column typed in on one screen instead.

Does asking more suppliers actually save money?

It saves what it saves, and the honest answer is that you cannot know until the comparison is happening. What you can know is that a supplier who was never asked cannot undercut the one who was, so every line quoted against three carries an invisible margin cost. The importer's system now counts the difference between the dearest offer and the one taken on every line — the direct return on being able to ask everybody.

Why is the whole database shown as people rather than hours?

Because 12,344 hours reads like a big number and 7.5 full-time people reads like the truth. Nobody is going to hire seven people to copy and retype, so by hand the database will simply never be asked. Once it is people rather than hours, the decision stops being about effort and becomes about the method.

—One next step

Who did you not ask?

The supplier you never reached cannot undercut the one you did. Make the enquiry free at any count and the comparison finally happens. Twenty minutes, no deck, no pitch.

HORATIO@BYHORATIO.COM

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