The stories below detail some of the cases I have come across on my Process Management journey.
PROJECT // 01 - The Car Repair Shop
More to come!
I spent some time in a car repair bodyshop reviewing their goods inwards department.
During this time it became clear that the department was constantly battling with the necessity to use a range of different suppliers to obtain parts for specific manufacturer vehicles - the use of this range of suppliers seemed too chaotic to be driven by cost alone.
Upon questioning the reason for this, I was advised that the business was often placed on an account hold (on stop) with suppliers at differing times within a month thus the necessity to find a supplier who was currently available for use.
This naturally prompted further investigation.
Along with a store room filled with unallocated parts, the department was regularly fielding phone calls requesting information on where parts were used, often with no traceable or reasonable conclusion.
So where had all the parts in the store room come from? Why were they unable to be allocated to any current jobs? What was the value of the parts? Why were all these brand new labelled parts there?
It transpired that the business had no defined 'Goods Returns' Process.
Painstakingly obtaining values of the parts and tracking through old incomplete invoices and reviewing information from suppliers who no longer dealt with the business because of debt, it was ascertained that the value of the parts which had only taken 6 months to amass, had a value of just short of £10,000! Upon my arrival this stock would have been the third batch to be scrapped at a close to repeatable value.
Through having no returns process, the business had not only lost approximately £30,000 in less than 2 years on parts but had also lost confidence and reputation with much needed suppliers.
A robust Goods Returns Process was developed for the business that integrated with their accounting processes and as much as possible was done to return any parts that would be accepted by suppliers to mitigate some of the losses.
With the right investigation, a business that had no idea why they were encountering financial difficulty and using excuses to explain their situation, a robust process could be developed to enhance their operation, remove the financial losses, create space in their stores and make positive steps towards re-establishing good relations with suppliers.