Are Low-Price, Poor-Quality Competitors Killing Your Business?

"OUR INDUSTRY is dying because we are content to accept what is given to us by others rather than to push forward with imagination, dedication, research and development of what we have available to us."

The above quote is excerpted from a lengthy letter (see page 37) we received last month from a pair of disgruntled Canadian woodworkers. Mohammad Alaghehbandi of Falcon Pre-Finishing and Mark Hennebury of Speciality Wood Products say they are fed up with a system that too often rewards bids mainly on price. In Alaghehbandi's and Hennebury's opinion, "(T)here are companies with few skills and knowledge, inadequate equipment and facilities, and a lack of ethics. These companies are bidding on the same jobs as the top-of-the-line companies that have the latest equipment and highest ethical standards -- with nothing in place (for bid awarders) to tell the difference."

The authors' comments echo sentiments occasionally expressed to us by other woodworkers who lost out on bids they deemed way too low to be profitable. The epitome of disgust vented our way has come from representatives of high-end architectural woodworking firms that were riled beyond belief after losing a high-profile job to a low-balling, snake-in-the-grass garage shop.

Just Cause or Sour Grapes?

Undoubtedly there are many bids won by companies that are desperate for work to keep busy, find ways to cut corners or miscalculated their quote. But, I think it is safe to say that most bids are won by experienced companies that either have mastered a specialty or have reduced their operating costs by updating their equipment and methodologies.

In their letter, the authors recommend that a set of "industry-wide standards" be enacted. They further suggest that the woodworking industry, "Implement a policy of using expert consultants to draw up detailed specifications, monitor progress and certify that it has been done to standards."

The woodworking industry is far too fragmented and diversified to incorporate a set of one-size-fits-all standards.

The authors believe these efforts and the related remedies they recommend will improve the woodworking industry's image, raise the value of work, and thus make woodworking jobs more attractive because those who fill them will be better paid.

We're all for addressing issues that will help better the industry, its quality and its stature. However, we can't help but ask what's wrong with the standards that are already in place and being amended on a regular basis? The woodworking industry is far too fragmented and diversified to incorporate a set of one-size-fits-all standards. That's why one of the major missions of dedicated trade associations like the Architectural Woodwork Institute, Kitchen Cabinet Manufacturers Assn. and Business & Institutional Furniture Manufacturers Assn. is to create, review and update standards tailored to their specific industry sector's needs.

It's important to note that these quality standards are voluntary. Still they establish important benchmarks for the expected minimum performance of everything from cabinet hinges to the finishing of architectural millwork.

In our free market economy, companies that do shoddy work relative to the amount of money they are paid, ultimately get run out of business. Those that are unethical stand not only to damage their reputation in the business community, but potentially incur the wrath of the law.

Our recommendations are simple, if high-quality is your company's strong suit, then learn to use that as your trump card in the marketplace. Begin by building relationships with customers and prospective customers by offering your time and expertise to educate them about the various aspects of quality work.

(I)f high-quality is your company's strong suit, then learn to use that as your trump card in the marketplace.

At the same time, never stop looking for ways to improve your company's ability to add to the bottom line by reducing costs. And don't forget to scrutinize the professionalism of your portfolio of completed projects and bid packets.

Stand and Be Counted

If you have an opinion or story to share about quality standards, the bidding system or any other subject related to this column or the letters beginning on page 37, then send it our way.