Do the Job Right - The DunnWell Blog
How Much Extra Will Guaranteed Savings Cost You?
The easiest way to guarantee savings is to stop spending money.
And any vendor that promises you guaranteed savings is certain to put systems in place that limit the amount of money you spend. But "guaranteed savings" does not necessarily mean a better outcome or higher profits. It just means that you did not spend as much money over some arbitrary period of time relative to some other equally arbitrary period of time. Let's look at the simple example of a personal automobile.
If I want to "guarantee" that my car maintenance bill this year is lower than last year, I can just push out any maintenance expenses by avoiding maintenance. Absent a catastrophic failure of some system on the car, I will refuse to do anything. No oil changes this year. No alignment - even after I hit a pothole and notice a little shake. No tire rotations either. That slight ding in the windshield is going to wait. And there is no way I am going to have anyone investigate that "Check Engine Light."
A year later, and the things I noticed and ignored to "guarantee" savings have come home to roost. The tires are worn unevenly and their life has been reduce by 25% - now I need new tires. The little chip in the windshield grew to a 9 inch crack when the first cold weather set in - now it can't be repaired and I need a new windshield. And the "Check Engine Light" was throwing a code indicating the Camshaft Position Sensor was faulty. In this case, the replacement costs a bit over $100, and I "guaranteed" that I did not pay that amount in the past year. BUT a faulty CPS on my F250 Powerstroke can cause the engine to die spontaneously. What if I had my three little girls in the truck with my 7000 lb. boat in tow and the engine shutdown? While going downhill? How much extra might I have paid for "guaranteed savings?"
"Guaranteed savings" is a sham because what you really want is better information. Better information reduces cost and risk by enabling better decisions. Your vendors, the good ones, are your expert eyes and ears that devote the hours to understanding the situation with your equipment at your facility. When you have a management system that promotes communication between you and your vendors, you will get better outcomes - longer equipment life, less downtime, more revenue, and, yes, lower costs over a longer period of time. Never settle for "guaranteed savings" when what you really want is better information, better decisions, and better outcomes.
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