What is meant by the right quality at the right time and at the right price?

For many years, logistics management was viewed as a necessary evil. That is, logistics activities had were needed for a manufacturing or retail firm to stay in business, but these activities were not seen as “strategic. As logistics managers sought to make the value-added contribution of logistics more visible to upper management, the “seven rights” of logistics were coined and publicized. The seven rights are, to deliver the right product, in the right quantity and the right condition, to the right place at the right time for the right customer at the right price. These seven rights highlighted the importance of moving and storing materials in an efficient, timely, and reliable manner. The seven rights also linked logistics to the key strategic objectives of cost competitiveness, quality, flexibility, and delivery. The seven rights demonstrate that logistic activities provided the foundation for high levels of customer satisfaction.


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  • DOI: 10.1007/1-4020-0612-8_871
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© 2000 Kluwer Academic Publishers

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(2000). SEVEN “RIGHTS” OF LOGISTICS . In: Swamidass, P.M. (eds) Encyclopedia of Production and Manufacturing Management. Springer, Boston, MA . https://doi.org/10.1007/1-4020-0612-8_871

Price, according to Lysons and Farrington’s book purchasing and supply chain management, can be defined as the value of a commodity or service measured in terms of the standard monetary unit. This is what the seller charges for the goods and service they are offering. But it is important for you to realize that price is not the same as cost. Your duty as a procurement officer is to compare the prices suppliers have in relation to the value they are offering.

While trying to figure out what is the right price, you should be careful not to compromise the other key purchasing variables. You could assume that the right price is the lowest one after comparing what other suppliers are proposing as their prices, but what about the right quality? What about time of delivery? Then again you could factor in all these purchasing factors (5R of procurement) and realize you have to pay slightly higher, in which case, what about your organization’s ability to make profit?

In short the ‘right price’ will be the lowest price available, consistent with ensuring the right quality, quantity, timing and delivery.

From a suppliers point of view

As a seller you could be wondering what is the right price to charge and the answer will be along the lines of;

  1. A price that a buyer and therefore the market is willing to pay. In short a price which the market will bear
  2. Since attaining competitive advantage over other suppliers in your niche is important this price should be the kind that allows you a win over the said competitors.
  3. A win for you is practically useless if the price you choose does not allow you to recover your costs and make profit. The price should be able to do that given that the main objective of a business is to make profits.
What is meant by the right quality at the right time and at the right price?
What is meant by the right quality at the right time and at the right price?

What is the right price according to the buyer?

The buyer doesn’t look at the price the same way the seller does. To a buyer price is an element in the total cost of ownership and this will be compared to the value the product or service has to offer. The right price will therefore be;

  1. A price that the buyer can afford and allows them to recover the cost of production and make profit assuming the buyer is in business.
  2. A price that seem fair from value point of view given the goods or services they are purchasing
  3. From a competition point of view, the right price enables the buyer to compete more effectively in their own market.

How do buyers decide on price?

Not that we have mentioned what qualifies as a ‘right price’ to a buyer and that purchases will make a bigger part of your cost of goods sold in the income statement, it is important to understand some of the factors to consider when deciding on whether to say yes or no to a price as a buyer.

What is meant by right quality?

The “Right Quality”: Obtaining goods which are of satisfactory quality and fit for their purpose (suited to internal and external customer's needs), by: Accurate specification of requirements and quality standards.

How important is it to acquire the right quality of material at the right time in the right quantity from the right source at the right price?

The success of any manufacturing activity is largely dependent on the procurement of materials of right quality, in the right quantities, from the right source, at right time and at right price – popularly known as five 'R's of the art of efficient purchasing .

What are the right quantities?

Right Quantity: The right quantity is the quantity that may be purchased at a time with the minimum total cost and which obviates shortage of materials. Ensuring and maintaining a regular flow of materials for carrying the production activity is the vital aim of any purchase organisation.

What is the importance of right quantity?

Right Quantity: The term right quantity refers to procuring a sufficient amount of products to meet the demand and lessen the excess stock by forecasting demand, inventory management, etc. Insufficient quantity can lead to stock-outs, will lose credibility in sales as well as goodwill, etc.