Profit Blog

Jarmo Manninen & Muutosdraiveri Oy


Are the services of your company's subcontractors and suppliers competitive?

15. huhtikuuta 2025

In this blog, I use the word service providers for subcontractors and suppliers, because both subcontractors' and suppliers' deliveries already involve more and more services now and in the future. In this context, I use the word services for service providers. In this context, I use the word client for the purchasing company. The perspective of the review is the client's financial management prerequisites for achieving performance targets. The starting point for the review is that the client has determined that it is worth purchasing the comparable services because the service providers are able to produce the services more cheaply than the client can produce them themselves.

The first thing that is worth finding out is whether the service providers' price levels are such that the client can achieve its performance targets with them? When comparing the price levels of service providers with each other, typical mistakes are made in the following areas:

1. A typical problem for suppliers in tender inquiries is that the liability limits of the supply chain are not defined precisely enough. For example, delivering goods to the customer's door is a completely different matter than delivering to a shelf location specified by the customer. This is not only a matter of the difference in transportation costs, but also of the fact that when delivering to a shelf location, the customer is not responsible for the storage costs.

2. Problems with subcontractor deliveries are typically related to either an increase in costs due to hourly pricing or, in fixed-price services, ambiguities in the content of the service, which results in additional costs for the customer.

3. Depending on the flexibility requirements related to the customer's business, a typical problem is that not all situations of flexibility requirements are defined with sufficient precision for service providers during the tendering phase, when exceptional situations in the customer's business increase the service providers' invoicing prices, causing even profitability problems for the customer in the worst case.

In terms of the final result, one of the most important things is that the client tells the service providers about their service needs in sufficient detail, openly and comprehensively during the tendering phase, so that they understand the client's service needs in different situations and are able to price their offer with the correct content. The biggest problems are typically that the client's service needs are not defined or limited precisely enough, or that for one reason or another there have been misunderstandings about the content of the service need. In the worst case, the selected subcontractor has been filed for bankruptcy.


Does your company face challenges in these matters?

I encourage you to share this blog post of mine on social media. If you have any suggestions for the topics of the next blog posts, I will gladly accept them.

I hope that you were interested in this matter and that you can continue to be involved.

I have written four books on creating the conditions for the company's financial management, and they are available in well-stocked bookstores and online bookstores in Finland, for example from BoD (Books On Demand) at:







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