[John:] I haven't had time to get it up on the machine to change again quickly but I've had a quick look at the situation with regard to the five per cent increase.
[Shane:] Yeah.
[John:] So the saving that we were going to make them, by reducing five per cent but increasing the lancer machine bearings and bumping this standard cost one up to well as it turned out, seventeen per cent margin. Yeah?
[Shane:] Mhm.
[John:] Would would ta make that three thousand pounds.
[Shane:] Which is the one we've just been talking about.
[John:] Yeah.
[Shane:] And so we were going up from that price to that price.
[John:] That's what I wanted to do.
[Shane:] That's what you wanted to do, you hadn't discussed these with them.
[John:] I've mentioned it to him and what he's saying is come back with a firm proposal. Obviously what happened then this was before
[Shane:] This is because this was the dead stock that we sent him.
[John:] The tools I wanted to get rid of.
[Shane:] Okay. Yeah.
[John:] It's changed really now because of the fact we pulled
[Shane:] Yeah.
[John:] we've got more of a leverage so we
[Shane:] Yeah.
[John:] need to re-look at how we Because he's mentioned straight away, as soon as he was in the mire
[Shane:] Right.
[John:] well you know, the five per cent reduction you know, don't worry about that at the minute and and all this sort of thing so
[Shane:] Right yeah.
[John:] it it does need another
[Shane:] Yeah.
[John:] looking at. Basically what if we do increase to that price.
[Shane:] Yeah.
[John:] On the machine build that he's given me for this year, of which that is an example. The two arrow machines use it and there's a hundred and two hundred and nine machines altogether
[Shane:] Yeah.
[John:] Mill which will have three of these one each machine. six hundred bearings pairs.
[Shane:] Six hundred and thirty seven to be precise
[John:] Right.
[Shane:] yes.
[John:] Well the difference is about six hundred and seventy two pounds.
[Shane:] You mean the increase in prices.
[John:] Yes that's how much extra it'll cost him.
[Shane:] Yeah.
[John:] Er we've run up a cost of two hundred and fifty quid getting.
[Shane:] And the rest and the rest.
[John:] Well this is this is what the point
[Shane:] Yeah.
[John:] I think now's the time. I want to try and get it done, bearing in mind Elaine's going to have to have the baby on Friday if she hasn't had it before.
[Shane:] Yeah.
[John:] So will more than likely be off next week, but I do want to try and get something done with this and some of the other accounts, I want to try and get them out the way before I
[Shane:] Right.
[John:] .
[Shane:] Now what's the the how have you calculated the five per cent erm reduction? Is th is that because all
[John:] Yeah.
[Shane:] these are down five per ce No that's not it.
[John:] That's down five, that's dow er that's up
[Shane:] That's up.
[John:] because it's the lancer machine. That one's up because it's the lancer machine. It's just those two that'll have gone down by five per cent which are the sabre machine bearings.
[Shane:] Right.
[John:] Okay?
[Shane:] So what's that five per cent negative worth to us?
[John:] Well what I what I did here, to work it out so I could come up to some sort of value, is I said I haven't had time to chuck these back on the screen yet to start again
[Shane:] Yeah.
[John:] but this is where it got to when we talked about it last time. Er is I'd looked at the using their machine build which I've built in,
[Shane:] Yeah.
[John:] on the sabre range, the lancers and the arrows,
[Shane:] Yeah.
[John:] it would mean that is the price that they would sell at the nineteen ninety four price volume. And that's the price... up to that one. Yeah that's it, the first five lines. So you're going for a five six to five nine, thirteen nine to fourteen six, thirteen seven to fourteen five.
[Shane:] So that that's the saving effect, the difference between those two is the saving.
[John:] Yeah, that is the saving that they would have made on each of those builds.
[Shane:] So we're talking there about
[John:] I'll I'll do it on the computer but
[Shane:] Savings savings of whatever this is, it's three hundred erm that's er seven hundred, that's a thousand. Er thirteen seven that's eight hundred, that's eighteen hundred. That's a big one isn't it.
[John:] About fifteen hundred.
[Shane:] Er that's three thousand three hundred
[John:] forty eight machines you see.
[Shane:] Right, so another sixteen hundred there. So so that's four or five thousand pounds that we're giving to them.
[John:] Right and and by putting these prices up on the lancer and that I was actually clawing a couple of thousand pound back off them. And that's I was trying to put myself in the position of before. Still offering them a three thousand pound saving.
[Shane:] Yeah.
[John:] But helping our spread if you know what I mean. Yeah?
[Shane:] Right.
[John:] Now it's a different ball game because we I think we have an opportunity to maintain that price for a while. I mean i it's it's where we feel we need to make the emphasis.
[Shane:] This is based on full full year isn't it.
[John:] Yeah.
[Shane:] Erm one of the things that er... would be nice to end up with is a price on the books which is the higher price.
[John:] Yeah.
[Shane:] So that the price we want to end up with on the books is is
[John:] Mhm.
[Shane:] that one, that one, that one
[John:] Yeah.
[Shane:] that one and that one.
[John:] Yeah, now well this is
[Shane:] [cough]
[John:] That one e erm I mean I'm a I was just I I said twenty pound O six, it was a quick calculation, it ends up at seventeen per cent margin. Erm you see it's it's balancing that between the fact that we don't
[Shane:] Mm.
[John:] But we're s we're gonna be charging it approximately twice as much as would. But we've helped him. And I think we've got
[Shane:] But but but we're only charging twice as much as would erm because are providing a standard bearing.
[John:] Er well selected for their standards that we think is the only way they could do it.
[Shane:] Yeah.
[John:] Although, understanding the way, volume manufacture and I would say they've probably if they've got similar production facilities, got a very good chance of producing good stuff anyway. Along the lines of, there's a very good probability they'll just take
[Shane:] Mm.
[John:] it straight off the line knowing that it's coming in. We we haven't got as precision.
[Shane:] So what's the advantage of of our product over theirs.
[John:] Nothing really.
[Shane:] Think of one.
[John:] Well er [LAUGHTER].
[Shane:] There must be some dimensions that have been more thoroughly checked than than er
[John:] Well no because I c I can't say exactly how 's applying their product. They could be doing it on a Yes well ninety per cent of them will be P five. They could be selecting them off the
[Shane:] Yeah.
[John:] line. Yeah if they if their churning out the stock that tu tend to churn out, I mean I go along for an enquiry for a few and find they've got thousands in stock. You know. And you think, Bloody hell, well I'm not surprised they can guarantee getting P fives. If I had all them to choose from, I could guarantee it.
[Shane:] [cough]
[John:] I don't know how they're achieving the price. I mean they're they're s they were something like twelve quid a pair. Yeah? Now... John says he he can only imagine that they're selecting them out. But then again, John's a precision man.
[Shane:] Yeah.
[John:] Yeah? So you know, coming to terms with how manage to do what they do, you can see it's probably actually not too bad a price to charge when they can get them cheaper.
[Shane:] Yeah yeah yeah yeah. But but we also know that if er [yawning] select from the end of the line of [] standard production. They don't select on every feature, they only select on some. Don't they?
[John:] No not necessarily they could er they could check for all tolerances
[Shane:] [sigh]
[John:] And I don't know how they do it. This is it I don't know how they do it. It's only dimensional tolerances don't forget. They don't have to test them or anything.
[Shane:] Well according to the the P Thanks Carol, the the the P five specs no doesn't involve noise testing.
[John:] No it's purely dimensional. The thing is, the machine tool industry or super precision requirements be become use and take for granted a noise specification, the fact that it must run quietly. But you can get P
[Shane:] Right well that's something that's something that you've got to you've got to differentiate.
[John:] Mm.
[Shane:] Ours are noise tested correct?
[John:] Yeah.
[Shane:] P five does not require a noise test.
[John:] No.
[Shane:] Correct?
[John:] Yeah.
[Shane:] Right so what you're getting from us is a noise tested bearing.
[John:] Right okay.
[Shane:] Secondly er
[John:] We guarantee P five.
[Shane:] We we are we're guaranteeing P five plus a noise level.
[John:] Yeah.
[Shane:] So you're actually getting something that you terribly badly need
[John:] I put the seed of doubt into Steve's mind about the fact that I could not say that er bearings could be guaranteed P five at that price. I said, the way they're picking them out, I couldn't say that they can guarantee every bearing.
[Shane:] Right and and what's the noise test that we put ours through, is that three dimensional noise testing there frequencies and and so on and
[John:] Yeah the normal.
[Shane:] Right, so so what we're doing is a noise test to super precision
[John:] Yeah.
[Shane:] limits.
[John:] Yeah.
[Shane:] Right is [yawning] there anything else like that pardon me, oh dear []. Is there anything else like that which erm er which we do that they may not do.
[John:] Not really. Cage it'd be interesting to find out what cage material they're supplying.
[Shane:] What cage material are you supplying?
[John:] I've a feeling B E T N.
[Shane:] B E T N.
[John:] Yeah so it's the er cage. the buttress type thing.
[Shane:] Yeah [cough].
[John:] Er okay, so you've got your quiet noise running. Quiet noise.
[Shane:] Be sure about the cage.
[John:] Yeah, it's the one, I'm not so sure what they would supply you see. Possibly nylon. They do tend to have single nylon that's a single strip that just folds round. They do a lot of that support frames.
[Shane:] Do they?
[John:] Yeah, a single strip that they actually just feed into the ring and then put the balls in. So it's not actually a solid ring, it's n nylon thing which sits in. Oh yeah they use that f in in the in the P two class product they have some of those in. Japanese do it as well. they works, I mean you know, our point is we always you know, we've got the guarantee with the cage and that. But er
[Shane:] Well [cough] okay so so you're going to you're going to erm emphasize the er the fact that what we are supplying is a noise tested
[John:] Mhm.
[Shane:] P five bearing.
[John:] Yeah.
[Shane:] You're going to emphasize the fact that our cage of course is erm a buttress cage
[John:] Mhm.
[Shane:] er out of er Polyamide six six.
[John:] Yeah.
[Shane:] Is it still polyamide sixty six, not.
[John:] I don't think it's changed yet.
[Shane:] Erm
[John:] Our stocks over there would still be that anyway.
[Shane:] And er er and and that that these have er substantial advantages for them and and don't know but but there's got to be an element of doubt.
[John:] Yeah yeah.
[Shane:] Erm and although they may say they're noise tested, erm I think you've gotta question whether they're noise tested to the level. And you've seen our facilities here. Er and and you know how
[John:] Yeah.
[Shane:] how very very careful we are.
[John:] Mm.
[Shane:] So what you're what you can be sure of getting from us is absolutely on line and of course you're getting a service.
[John:] Right. Erm e mainly it's where do I put the emphasis. I know we've got a lever now, yeah, we're gonna get rid of this in other words, Steve's gonna give us something for it.
[Shane:] Yeah.
[John:] Yeah, it's identifying where we want to get it. Now okay, I know what you mean by saying yes, you want to get the higher price everywhere. But if we took the highest price of everything then we're making thousands and thousands and thousands. Now
[Shane:] Yeah well presumably we're reversing this position.
[John:] That's right, we've got to balance that with the fact that we did promise them a decrease, but we've got the erm leverage of having helped them. So if we've got
[Shane:] Well hang on hang on, hang on. I'll tell you what we'll do. I'll tell you what we'll do.
[John:] Yeah.
[Shane:] How about we leave the price as it is. We'll we'll we'll leave no no we'll no no we'll leave these these prices here which we were gonna reduce, we're gonna
[John:] Yeah.
[Shane:] leave them as they are.
[John:] Right.
[Shane:] But we will give them a five per cent reduction on those prices wh for deliveries between March and September.
[John:] So we're giving em it for six months.
[Shane:] We're giving it for six months.
[John:] .
[Shane:] That's worth two and a half thousand quid.
[John:] Yeah. Mm. Er June to December he'll say.
[Shane:] Alright June to December but that's Yeah
[John:] Just easier you see, cos he'll say the then for when we do a price increase next time. Cos if you go back up in September, it's higher for the increase next January.
[Shane:] Well that's exactly right.
[John:] [LAUGHTER].
[Shane:] But [LAUGHTER] but at Yeah okay but at least we've got the price on the table. Maybe we don't increase it next January.
[John:] Mm.
[Shane:] Maybe we leave it where it is, but at least that price is on the table.
[John:] Right.
[Shane:] Whereas anything else we do, we've got to fight ou we've got to claw our way back to that.
[John:] I'll tell you what then, we've got the two options, we've got the one area of this five per cent where
[Shane:] Yeah.
[John:] we don't want to give em it for the whole year.
[Shane:] Yeah.
[John:] And I've got the standard cost here I need to get up.
[Shane:] Right.
[John:] Right, now erm I want to get that up first.
[Shane:] Yeah.
[John:] I want to make profit on one size rather than er
[Shane:] Yeah.
[John:] Yeah, keep it on others.
[Shane:] Yeah.
[John:] So how about if I look at the six monthly saving,
[Shane:] Yes.
[John:] Yeah.
[Shane:] Yeah.
[John:] I look at what that is in value, about two and a half thousand, I'll look at this one,
[Shane:] Yeah.
[John:] I'll put a reasonable price in there, I see what that's gonn [recording ends]