Aug 28 2007 8:22AM | Permalink | Email this | Comments (1) |
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The concept of price visibility is not new; it has been practiced by builders for years and, with varying degrees of success.  Many builders have been trying to separate and identify the cost of material, the cost of service and the cost of installation in an attempt to better control supply chain costs. 

In my opinion, this is a good thing!  It allows everyone in the chain to identify the true cost of installed materials.  However, many manufacturers, distributors and trade contractors fight this concept.  Is it because they are truly charging too much for the product or service?  Are they afraid that the builder will attempt to beat them down when it comes to price?  Are distributors and trade contractors worried that their services may be eliminated?  The answers to these questions are most likely “yes”. 

It seems to me that if all members of the chain go into the price visibility process with an objective and open mind, the process will provide benefits for all in the chain.  A frank and honest discussion about each member’s role in the chain may actually reinforce the worth of each chain member.  Or it might uncover new areas of value that a member can offer to enhance the efficiency of the supply chain.

Since the builder is usually the one that instigates the price visibility process, it is important that the builder do so with the right attitude.  The builder can’t come down like Attila the Hun scattering blood and bones all over the place.  If the builder approaches this process looking for a “win” for all of the players in the chain, chances are the process will be successful and the supply chain will be more efficient.