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Let’s Take Stock Of This Flawed System

, , , , , | Working | October 30, 2020

I work in an ops team that handles the deliveries of our stock. One day, my boss gives me a task to problem-solve a list of deliveries for one of our big customers.

Usually, what happens is we import the stock, store it in a warehouse, and then tell the warehouse how much to deliver while removing the stock from our system. But for this specific customer, we import the stock and deliver by the container to the customer’s own warehouse. They then help themselves to the stock they need and send us a self-bill detailing what they have used at the end of every week. We’re talking around fifteen metric tons of various stock per week. On receiving the self-bill, my department amends our system to signify that the stock has been used and is no longer in the warehouse.

Now, at this point, you might be thinking to yourself, “That sounds like a terrible system with a massive margin for error,” and as it turns out, you’re absolutely right.

This customer is managed by my coworker who, while nice enough, has a tendency to blaze through all her work and not look back. What could possibly go wrong, you ask? At the end of the financial year, the discrepancies in the system are something like 20,000 kg surplus of Product A in blue, 12,000 kg missing of Product A in pink, and 10,087.5k g missing of Product B. How we ended with a discrepancy of 87.5 kg of a product we sold by the metric ton is beyond me.

Coworker: “[Boss], what should I do about this self-bill? The stock doesn’t exist on our system.”

Boss: “Take it to [My Name]. They’re great with this sort of thing.”

My analytical brain and I get dropped into this problem of finding what happened to over £100,000 worth of stock. This first involves me combing through a year’s worth of orders and cross-referencing the customer’s order list against our own, and let me tell you, that was a fun afternoon, reading sixteen-digit reference numbers over and over.

On identifying the discrepancies, I then pull the self-bill we received and compare it to the invoice on our system to spot the difference. That’s easier said than done, because the self-bill lists the quantity by the number of cartons instead of the weight of the order. I see on the self-bill 360 cartons and have to manually work this out to its weight in kilos to compare to our order list. It wouldn’t be a big deal if they were 10 kg boxes, but, obviously, they’re a random weight of 22.68kg.

Of the five issues that I find, two of the self-bills haven’t been received for whatever reason.

One week’s self-bill includes 10,000 kg of Product A in blue but was, in fact, processed as 20,000 kg of Product B.

Another week’s self-bill is for 4,000 kg of Product A in blue and 4,000 kg in pink. Guess what was invoiced? 8,000 kg in pink and none in blue.

The final one is the icing on the cake. The self–bill comes through for 8,000 kg of Product A in blue, 4,000 kg of Product A in pink, and 2,000 kg of Product B. I am scratching my head over this one for a long time because the amount that the customer paid us matched perfectly with what our system said they owed for that week.

As it turns out, our stock was put on as 12,000 kg of Product A in pink and 2,000 kg of Product A in blue, with none of Product B. While the correct weight of stock was removed, the different products had different sale prices, so there was an extra line at the bottom of the invoice that said, “Adjustment to make invoice correct,” and a charge of the £3,000 or so that let the invoice match what the customer paid us. So, my coworker had added £3,000 to the invoice for absolutely nothing and promptly forgot about it. Due to the self-bills, the customer doesn’t see our invoice copy so the error wasn’t picked up for months.

I never found the final 87.5 kg of missing stock, but given the value of the rest of the issues, my directors told me not to worry about it. In retrospect, it was probably due to some damaged boxes that we credited their account with.

We don’t send them stock this way anymore.

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