Optimizing offers under the delivery time criterion
Most companies entering tenders focus exclusively on lowering the price. This is a mistake that eats margin and leads to bankruptcy. At Konsens Logika, we analyzed 8 proceedings from 2023 where more expensive offers won, but were delivered faster by just 3 or 4 business days.
Time criterion as a profit lever
In June 2023, we analyzed a tender for a manufacturing company near Łódź. The ordering party assigned a weight of 60% to price and 40% to delivery time. Most bidders fought for every penny, lowering their profitability to 2.4%. We proposed a different path. Instead of cutting material costs, we checked 12 behavioral variants of competition and logistics. It turned out that shortening the deadline by 72 hours gives more points than a price reduction of 11,000 PLN. Mathematics has no emotions, and in this case, the numbers clearly indicated that time is worth more than cash.
Many entrepreneurs are afraid to declare short deadlines. They fear contractual penalties, which in 2024 average 0.1% of the order value for each day of delay. However, with a margin of 14%, the risk of paying a penalty for a 2-day delay is mathematically more profitable than starting with a price close to production costs. We include these variables in our models. We calculate the probability of a blockage on a 147-kilometer route and check if 4 extra hours of warehouse work on a Saturday realistically brings us closer to victory in bidding.
Shortening the deadline by 72 hours gives more points than a price reduction of 11,000 PLN.
Analysis of 8 tenders from last year
We scrutinized exactly 8 public and private proceedings from the second half of 2023. In 6 of them, the ordering party was willing to pay 4.8% more for goods that reached them before the end of the calendar month. Why does this happen? Budgets must be settled, and assembly line downtime costs an average of 3,200 PLN per hour. Your rival has already calculated their chances and likely assumed no one would jump the barrier of 10 business days. We prove that with a properly arranged schedule, 7 days is realistic without a drastic increase in costs.
During a project in October, we noticed that competition always provides round deadlines like 14 or 21 days. This is a signal they aren't calculating real processing capacities but are just shooting in the dark. We introduced a model that accounted for 3 key transshipment points and the work time of 5 specific drivers. Thanks to this, our client submitted an offer for 11 days. They won, even though their price was 8,400 PLN higher than the cheapest proposal. Numbers speak louder than a bluff, and a precise delivery deadline is the strongest argument in a salesman's hand.
Your rival had already calculated their chances, but likely based them on wrong assumptions.
How to check 12 behavioral variants?
At Konsens Logika, we don't read tea leaves. Every offer we prepare goes through a game theory simulation. We check what competitor A will do if they know we have a warehouse in Łódź. We analyze how competitor B will react to a change in the time criterion in the specification of essential terms of the order. It often turns out that companies act schematically. If in three previous tenders a given player gave a 14-day deadline, there is an 83% probability they will do the same a fourth time. This is where mathematics allows us to take control over the result.
You might think your logistics isn't flexible enough. This is a frequent argument, but it usually stems from a lack of hard data. (By the way, most companies in Poland lose about 2h 14min a day on poor communication between the office and forwarding). When we eliminate these gaps, it suddenly turns out those missing 2 days to win a tender are within reach. You don't need to invest in a new fleet; you just need to arrange the blocks you already have on your desk differently. We show you how to do it without unnecessary risk and empty promises.
Practical steps before the next tender
Start with a simple operation. Take the 3 last result sheets from proceedings you participated in. Check how many points you lost in the time criterion. If that difference is greater than 5 points, it means you're forfeiting orders by default. In November 2023, we helped a construction company regain profitability precisely by correcting deadlines. Instead of 30 days, they started offering 26. Their additional cost was 1,200 PLN per month (an extra warehouse shift), while the profit from won contracts increased by 42,000 PLN.
Every tender is a game of chess. You can play with pawns and hope for luck, or use mathematics and predict your rivals' moves. At Konsens Logika, we build models that take emotions out of the decision-making process. We aren't interested in what the competition says about their quality. We are interested in what they will do when they see your offer, which is precisely aimed at their weak points. If you want to stop bidding on price alone, it's time to look at the watch and the calculator.
