A common question that any large-scale industrial project owner is faced with, is to choose free-issued or vendor-supplied materials and equipment.
Free-issued materials are materials that are supplied and delivered by the customer for the vendor to use. Vendor-supplied materials are sourced directly by the vendor.
Here are five things to consider when deciding to choose free-issued or vendor-supplied industrial materials:
Quality
Quality is paramount to the success of any project. Many vendors have quality checks in place to ensure the materials they source meet high quality standards. Should a customer choose to free-issue project materials, the task of ensuring the materials are high-quality is now placed on them.
For some customers, this may be a great option if they have a high degree of familiarity and knowledge about the needed materials. Others may be engaging on a fabrication project first-time or have limited knowledge of fabrication, and in this case, using vendor-supplied materials from a vendor who has many years of experience sourcing high-quality materials may be the better option.
Locally-sourced values
For some locally-owned companies, using materials from a local source is part of their core values. For these customers, using materials that are locally-made when possible is a large consideration when choosing free-issued or vendor-supplied materials, depending on where the vendor’s materials have been sourced from.
These customers may also be keen on materials that are not only constructed from local resources, but have used local labor in the construction as well.
Costs
There are instances for both free-issued or vendor-sourced materials having better cost-savings advantages. In some cases, it’s cheaper for customers to free-issue materials when the customer has a direct relationship with the material source and thus better buying power. For example, on certain mechanical or equipment components, it may be more beneficial for the customer to setup a contract with the Original Equipment Manufacturer (OEM) and get volume pricing.
In other cases, vendors may have better buying power than the customer for main industrial materials such as steel because the volume they purchase over time gives them buying power. This is especially true for well-established companies that have been around for decades.
In addition, choosing vendor supply for major materials such as steel makes it easier for the vendor to control the purchase schedule – if the vendor receives material late, there is then added labor costs for running over the schedule.
Scheduling and shipment timing
One of the most important factors to consider when deciding to free-issue materials or go with a vendor supply is scheduling.
By choosing to free-issued materials, the delivery scheduling is now out of your vendor’s control. If the free-issued supplier is late, it can delay the project timeline. Vendors typically have more control over scheduling material than the customer for a variety of reasons:
- they may already have the material on-hand
- they are well-acquainted with the project’s
daily schedule, which may have changed over time - they typically already have relationships with
trusted material suppliers already established.
Delays in schedules can cause a plethora of problems in itself. In some cases, if a project’s shipping date is pushed into a road band season, shipping then becomes more complicated and the project’s delivery may be further delayed.
Combining free-issued & vendor-supplied materials
It’s common for projects to combine both free-issued and vendor-suppled materials, depending on the nature of the project and the factors discussed above. A common example of this hybrid typically found in the fabrication industry, is using vendor-supplied steel components, and free-issued mechanical components setup by the customer with OEMs for materials such as gear boxes, bearings, pumps, valves & instrumentation. This also help keep part numbers to a minimum and reduces the amount of spare parts on-site for the customer.
For some customers, choosing vendor-supplied materials is an attractive option because there are less contracts to manage, and subsequently less coordination and inspections to oversee.
Every fabrication project is unique, and every customer is unique in their values, existing manufacturer relationships and management capacities. With careful consideration and partnering with an experienced company like Saskarc, your fabrication project can be a success.
Saskarc has close to 30 years of experience providing superior steel fabrication solutions achieved by combining project analysis, stakeholder communications and design innovation for modularization. See what our customers have to say about working with us and contact us today to learn more about how we can make your fabrication project a success by utilizing modularization.
