-- Customers asking for thing outside of Scope --

How do you guys deal with customers requiring things that are outside of what you signed up for?

Seems like every project, they want to add this, remove that, make this faster even if we achieve cycle time, make SOP when that was not discussed, etc..


For the most part we always take care of the customer, but it is killing financially and time wise to do so. I'm just curious how to approach this nicely.





Thanks!

Happens always for us too.
If it doesn't take much time or money we just do it.
If it exceeds a certain value in material and labor or programming then we issue them an engineering change request - with a quote. If they buy it we do it, if they don't it stays as it is.

Yep, change order. Happens on almost every project.

Controlling the customer's expectations, as well as variations and how/when you present them are paramount. Everyone expects everything all the time, and they expect to pay nothing for it.

Phrog30 said:

Yep, change order. Happens on almost every project.

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Change orders require a project manager/management that is willing to push back to the customer. It also requires that there was a firm scope set up front, with defined expectations.


It's a rare thing, sadly.

I've spent time as project manager and engineer so I'm fairly familiar with both sides of the coin. There is a distinction to be made here about what is a sensible revision/omission and what represents a change in scope. Scope creep is always a problem.

The most powerful tool you have is to write a detailed FDS in advance of the engineering and have that agreed by the end user. An FDS is often a key deliverable/milestone in a project. Quotes and contracts are usually written by sales teams rather than engineering and can be "woolly" at best. A well written FDS should give clarity over what exactly will be delivered, how it will work and the major components it will be made up of; this then becomes "what was agreed" as deliverable.

Establish a company policy of change request and produce a "form that must be completed". Cost the change even if you then agree to do it for nothing - freebies are great but people appreciate them more if they know what they cost.

Nick

Timeismoney08 said:

How do you guys deal with customers requiring things that are outside of what you signed up for?

Seems like every project, they want to add this, remove that, make this faster even if we achieve cycle time, make SOP when that was not discussed, etc..

For the most part we always take care of the customer, but it is killing financially and time wise to do so. I'm just curious how to approach this nicely.

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I'm on the customer side... and although I've been on the supply side, I still get caught out because something obvious is assumed by me and not the other side.
The last one that ocurred to me was to install a new instance of an Historian onto the server infrastructure in the plant. I assumed that the windows license was included, the supplier did not. When it came time to do the project I was asked for a Windows license that hadn't been priced.

Obviously, you cannot include stuff that hasn't been discussed in the quote as it's going to potentially price you out against other competitors. But, raising some of the concerns out right or specifying in the quote that SOP is not included, etc... by default should go some way towards making the customer think or reassess their assumptions and ask the quote to be ammended.

Obviously, this is blue sky thinking. Some customers will take advantage. It's then a case to have a clearly defined scope to start the work and charge whenever some time and labour will be required. This too is a tricky balance, and it should depend on the relationship with the client since on some of these modifications you will be able to claim the money back in repeat business, other modifications are simply impossible to do that and hopefully the client understands it.
I'm no stranger to ask for something extra on a project with a PO in my hand for more work for example... although I don't ask for an extra 3% of work or parts either.

I don't know if it is common practice, but when I was working for system integrators the commissioning phase was usually charged by the hour separately. When the requests came and they came mostly during the commissioning, it was relatively easy to say that we should finish the original works first and I would give estimation on how much time it would require to do those changes after that. I also told that I can only do changes in the software side, any physical changes would have to go through project manager and it would not be possible to finish in the original schedule. This would usually filter out most of the wilder requests. I think part of it was that it is much easier to put pressure on the guy on site than actually take the time to compose email or grab the phone and explain it to someone else.

Luckily I also had the privilege of working with mostly reasonable customers.

Like others, I have been on both sides of this one...

I worked as a contractor for the water industry, and there was one job where a number of contractors were doing the same package for different pumping stations. Ended up we all had questions, designs were slightly different, as the client expected us to design and build and commission. He also kept adding things to the scope as instances were "found" at each station to be added to others. Told us to get on with it....
At the end of the job, there was an enquiry into why it had cost twice as much as estimated. Our companies had to compromise on the costs so we lost out....

Now, as client, I have attempted to write a detailed Electrical Specification for our needs, but our purchasers try to squeeze out the costs, so we have to accept somethings that do not meet the spec.
But when doing individual projects, I do try and think of all the things I would include or need, but when you are dealing with interfaces to existing and ageing plant, there are things that appear unexpected or not what was on the 1998 drawings, as changes were not always recorded.
You just have to agree a variation and detail it with extra costs, then move on.

Be professional and very detailed in your contract about your scope of supply.

If you are up against a competitor that agree to anything that the customer demands without payment, then you have no chance of competing. So just don't. Better to lose a contract than winning and taking a big hit for your efforts.
A customer that shops based entirely on the lowest price is always a nightmare.

Your best strategy is to deliver exactly what was agreed upon, without delays and without problems on your side. Over time you will build a reputation as a reliable vendor which will attract the customers that value these qualities. The professional customers will understand that a well put together contract is best for both parties. Expecting to change the design or scope of supply after signing is unacceptable.

Now, mistakes do happen, and something is discovered halfway through the project. Just be sure that the mistake is not by you ! If that happens, ask for a fair price (and possibly extension of the time of delivery or commisioning). But do NOT do it for free. It will create a bad precedent.

JohnCalderwood said:

He also kept adding things to the scope as instances were "found" at each station to be added to others. Told us to get on with it....

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I dont understand why you just caved to the customers demands. What were you to lose by sticking to the contract ?

I dont understand why you just caved to the customers demands. What were you to lose by sticking to the contract ?

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Ha....Framework contract with Scottish Water. You are on the framework agreement for a couple of years. How you "perform" is key to getting work from them, amongst other things...all very dodgy, these "agreements"...glad I am well out of it now.

Also, there will always be minor discrepancies during a project, on both sides.
Be sure to keep a record of everything, preferably mention the problems you encounter due to others at project meetings and that it is noted in the MoM.

It is possible that at the end of the project the customer will present you with a bill caused by delays or costs "caused by you". In that case you can possibly counter with that there were delays or costs caused by others, and you have the records to prove it.

Just ask them if they want the extras on a seperate PO or should your time be put on the PO that you are there working on... you can be polite asking but still be straight forward

Back in the day when I was on the other side I did the same thing, just trying to take advantage of the 'tallenent' being in the building and did not think about the cost side and where it would be expensed, my guess your customer is happy you are there and they want the machine (s) to be running the best they can be when you walk out the door.... because most of the time they know they will not see you again for sometime

Originally posted by geniusintraining:

Back in the day when I was on the other side I did the same thing, just trying to take advantage of the 'tallenent' being in the building ...

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This is just as likely a cause as anything else in most cases. Have you ever just said "No"? It is a pretty well established trend that you will get exactly nothing that you don't ask for. Couple that with the fact that asking for something comes with zero cost attached and you have the perfect environment for customers to just ask away and hope the supplier will do it.

That being said, I wholeheartedly agree that one side or the other needs to get into come detail concerning what will be provided and that needs to be a signed, archived document. It really does make things easier on both sides when this exists.

Keith

freebies are great but people appreciate them more if they know what they cost.

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It's a relevant boost to the people in the field doing the work, too. It really does change the way a project or site manager treats your crew based on what they think their value is, even if they're not paying it in dollars.