At T&D Manufacturing, the procedure to obtain needed tooling is to
have the tools designed in house by company tool engineers. When the design is approved,
part prints and specifications are mailed to at least three approved outside vendors. The
outside shop supplying the best price and delivery date is usually awarded a contract to
produce the tool.
T&D also has an internal tool and die department. In the past this
department has been used primarily to resharpen and repair the tools that are purchased
outside. However, now the head of the department has requested management to allow them to
offer a price to produce the tooling internally. This request is approved. Next the
department head places a call to the Purchasing Department and asks for the prices
obtained from the outside vendors before he submits his quote.
Is there anything wrong with the department head making this request?
How should Purchasing respond?
Outside vendors discover that T&D's Purchasing Department has
shared their quotes with T&D's tool and die department head. They complain that
T&D has acted in bad faith with outside vendors. Outside vendors are, in effect,
providing free advice to T&D -- and they will very likely lose out in the bidding.
"At the very least," one of the vendors objects, "you should tell us what
your procedure is. Then see how many of us will be interested in providing quotes at all.
Why should we invest our time and energy in this only to have you pave the way for your
own department to do the business we are seeking? We don't object to your department
entering the competition, but only on a level playing field. You have to play fair with us
-- otherwise we don't play."