This is not rocket science because anyone with a brain cell would ask questions if you are suddenly using more product and the monthly expense increases. Maybe this is slowly done over a few years to not make it so obvious, but surely someone should notice.
This morning we had another enquiry with regard to a new client looking for a new packaging supplier. What was the elephant in the room with this enquiry was how much they were being ripped off and had no idea it was even happening.
This is what happens when your buying department is separate from those using the products as the buyers lack of knowledge is going to cost the company money. In this instance I blame all those involved because at some point when the short delivery was taking place the numbers would have risen and the questions should have been asked. Are we suddenly far busier and the reason why we are using more product is the obvious question.
This particular company is buying a 400m pallet wrap roll of 13 microns weighing at 1.5kg which should in fact be 2.3 kg's so they are being short changed by 0.8kg's on every roll. They are receiving roughly 66% of what they should be and over a period of time this adds up so quickly.
Calculating their monthly expense on what I would be charging them which will be cheaper than their current supplier they would be paying R254K for 3200 rolls. Knowing they will only need in the region of 2100 rolls at the right weight they are over paying by around R85K monthly and I would say more due to a higher price than what we offer.
This equates to a saving of R1 million per annum which is close to $60K and in this economic environment could be the difference from keeping an extra 5-10 staff employed or not. I dare say if this is happening with only one item if I took a closer look I would find many other items with the same issues.
Sadly this is a story I hear too often and it kind of infuriates me as how can this even be allowed to happen. Where are the people who are paying attention to what is happening in the business?
In theory I could quote like for like and continue the rip off, but I have morals and the most enjoyable part for myself is finding a savings for my clients wherever possible. That is what I really enjoy and oddly enough this is more important than the money earned for our company as I feel it has to be earned in the right way.
These numbers make our company a decent profit upwards of R25K ($1.5k) monthly compared to the crooked profit of R90K ($5.5K). Knowing you are doing right by everyone is what should matter because in 5 years time this should still be your client whereas the crooked suppliers you would like to think would be caught out.
As frustrating as this may sound I do not understand how companies can be run this way and this is all down to not understanding the business and over looking what is right in front of them. Call it ignorance or just laziness I do not know as the employees today are definitely not hands on and have no idea what they are doing and the damage they are causing these businesses long term.