Lifetime Buy

We’re running out of components to keep our instrument line alive. I mentioned that we contract with companies we call Sunset Houses, and we’ve had troubles with some of these shady businesses. When we know that a trusted manufacturer of a certain kind of thru hole component is going to cease production we usually try to book what is called a Lifetime Buy. Lifetime Buys are a final bulk purchase of a known, good part that should carry us on for years after a component has been discontinued. Employees called “buyers” maintain on hand inventory of parts and try to figure out what our useage will be for years in advance even after a product line is obsoleted. So far, none of the buyers have done a very good job predicting what a particular part’s demand will be and we inevitably run out of supply years too soon. Then we’re in serious shit.

The moment our in house stock of an item is depleted, we end up scrounging around for any suitable replacement part. Many of the Sunset Houses promise us good components but when we get the stuff in and start testing it, frequently it turns out to be junk. It’s a real mess. I don’t know if there is a better solution but what I do know is that the longer we support this vintage product family the more hassle we have trying to keep it alive. In the meantime our marketers price gouge the shit out of our customers that buy these boxes. If the finished unit costs us $11,000 to build and test, they sell it for $60,000 to $70,000 to the end user. That’s one hell of a markup, and a cash cow for Bill and Dave’s company.


~ by factorypeasant on August 11, 2005.

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