Stop Over-reliance on Vendors when Purchasing Equipment

Purchasing costly automated equipment requires that we partner with the vendor to select the equipment we need. Unfortunately, Over-reliance on vendors in the purchase resulting in equipment that does not fit the need as planned. This article will help scientists and automation engineers to stop over-relying on the vendors in purchase of new equipment.

Laboratory function increasingly relies on expensive capital items and high priced consumables. This means that Labs have to manage the risk associated with their supply chain and equipment needs to deliver the science. Supplier risk management is the term used to describe this risk management.

Over-reliance on vendor mistake #1: The vendor knows more about the equipment and capabilities that my lab needs than I do.

Problem:

We have made a number of purchases where the vendor does not understand what we are doing with their product. Salespeople are trained to sell equipment, but it is rare for them to have experience using the product. You may hit the jackpot and the salesperson has worked in automation and understand the needs of a customer; if this is the case, keep that unicorn by your side.

More often, the sales person only knows their product from a hypothetical; what it looks like in a catalog or on a showroom floor perspective, but they have never actually used it. We have even had sales-reps tell us that our current implementation of their product was not possible. We have also seen vendors remove features from products that were critical to our workflows because they didn’t understand them.

Solution:

When you embark on purchasing equipment from a vendor, explain what you want to do to the salesperson. They may not understand, but will listen if you make it clear that these are requirements for a sale. You know what you are currently doing in your laboratory. You know what you need the product to do. Make them understand. Have your workflows drawn out, simplified, with the critical aspects highlighted for a non-technical audience. Ask to speak with the product designers, product managers, technicians who are building/supporting the product. This is a good first step to stop over-relying on vendors.

Over-reliance on vendor mistake #2: Vendors will inform me if an instrument update will be released within a few months of my purchase.

Problem:

Have you ever bought an expensive piece of equipment and found out that it was obsolete within a year? Or that an instrument will no longer be supported before the depreciation is completed? Vendors may not disclose about unreleased products to a prospective customer if this means a delay in the sales commission. This is especially true if the sales rep does not believe there will be repeat business from you. Purchasing equipment that is obsolete immediately after installation is a great way to look bad in front of your manager. Following the suggestions below can save you embarrassment help you stop over-relying on vendors.

Solution:

Vendors tend to know their product roadmap years in advance; there may be exceptions, but this will be the minority for big capital purchases. The salesperson may not know what is coming but their supervisor likely does and the product manager definitely will. We now warn all salespeople that they need to disclose upcoming improvements/replacements for a product before making a large sale. You could even write this into a contractual relationship with repeat vendors. When you are building a relationship with a new vendor, you should request a non-disclosure agreement; this will allow you to talk freely with them your needs and their product plans.

Over-reliance on vendor mistake 3: The sales representative knows the reliability and maintenance needs and vendor’s capabilities to repair the equipment I’m buying

Problem:

As stated earlier your salesperson probably doesn’t use the device you are planning to buy. They may know the details about available service contracts; but they likely won’t be able to tell you the parts which will need to be replaced and the frequency. If the product has been on the market for a while, there should be real world numbers. However, if it is a new product, they’ll be basically guessing based on their own in house testing. When a vendor misstates a product’s life expectancy, it is akin to a new car requiring repairs the warranty expires. Unfortunately, most laboratory instruments don’t have an odometer; it will be up to you to prove that the instrument failed prematurely.

Solution:

Provisional purchase contracts detail the criteria for site acceptance of equipment. They usually include details of expected instrument lifetime; they may even include details of parts and maintenance performed. You will also need to keep track of system usage metrics and ensure that you are keeping your vendors honest. This will likely not be an issue for a vendor you do significant business with. They will not jeopardize the next sales because this one went awry.

Over-reliance on vendor mistake 4: The vendor I am dealing with is the only one who makes what I need

Problem:

Equipment required in your laboratory is only sold by one vendor. That vendor has increased the price of the equipment. They own the market and YOU have no option but to pay the price and accept their demands.

We were recently told that devices we depend on in the laboratory were no longer requiring replacement parts. The replacement cost for new instruments is $300,000-$400,000 apiece to replace them; the new price is over $100,000 more than the original unit. They told us we could get 5% back on trade in if we give them back the old units. The vendor also informed us that any other technologies/assays we might consider were obviously inferior.

Solution:

This happens a lot and you owe it to yourself to determine if the vendor is right. With a little digging, there is usually another vendor with an equivalent product, who is doing their best impression of David versus Goliath. Smaller vendors are far more likely to want to work with you and develop technologies targeted at your business. RaveRobot does our best to provide scientists with automated options out there. Check out our liquid handling robot list and automated decapper list as examples.

Maybe you can’t switch your vendor because your business is risk averse and a small startup is too high a risk to use as a primary vendor. That’s ok, your big vendor doesn’t know that unless you told them. Let them know you are looking at alternatives and that the alternatives are working with you.

Bring in the new vendor’s product for a demo, do a head to head comparison and if the data is similar make sure you let both parties know. For the above example that’s what we did, the correlation between the two assays had an R-squared value greater than 0.90. The time to run the assays was the same. The consumable cost for the new technology was 2-3X larger, but even with that difference in cost, it would take me over 10 years to equal the cost of the big vendor’s hardware.

We are curious of your thoughts about this points or if there are any other mistakes you’ve encountered and solutions to them? Please let us know in the comments below if you have anything to contribute.