Monday, August 6, 2007

Beyond Logic

Recently I was lucky enough to be in a meeting to review the results of a inventory audit. My company every quarter at the directive of the Brain Trust (ie Executive Management Staff) conducts a count of every piece of manufactured product we have stored in our warehouse. The big shots stress how important it is to conduct these counts to ensure everything is accurate. This would seem like a logical request as any company would want to make sure the inventory stored was as accurate as possible. But at my company what may seem logical on the surface becomes idiotic and wasteful when you drill down deeper.

Doing such a count at my company is pointless due to the fact that product cycles out of our warehouse very quickly. The product kept in our warehouse only sits in our warehouse for an average of 10 days. Also, we have people that are responsible for counting and reporting on inventory daily. They can't count every type of product we have stored, but they usually cycle through the various portions of our warehouse each month. So the directive to count product quarterly does nothing more than waste time, effort and money. Here's the results of our latest quarterly warehouse counting effort that proves that point:

Cost to Pay Employees to Count: $16,500 (combination of regular time and OT)
Unit Difference Actual Inventory vs. Reported Inventory: -8 units
Dollar Difference Actual Inventory vs. Reported Inventory: -$150
Inventory Accuracy %: 99.98%

So we spent $16,500 in labor to find a shortage of 8 units and $150. Now, I've tried to look at this to see how anyone could explain spending $16,500 to uncover $150. Alas, I haven't developed any new form of math or logic that could justify this.

Now as a Turtle I would normally just "lay low" and let this slide, but I had a moment of temporary insanity. When the costs and results were being reviewed I actually questioned why we would continuously conduct such a costly exercise knowing that each time our inventory nearly matches up perfectly. I was met with an "Who's on First" Abbot and Costello type response from the various head honchos in the meeting. I retreated back into my shell to avoid any further bullshit responses, but in the back of my mind I began thinking about what that wasted $16,500 could have been used for. It could have gone towards:

  • Better pay raises for me and my employees. It's nice watching the big shots drive around in expensive cars, wear expensive clothing, and take lavish vacations, while we get a pat on the back and a bag of donuts instead of raises.
  • Training. We get zero training at my company. The rivers would turn red, it would rain frogs and locusts would attack the day we actually had a training class at my company.
  • New cubicles. Our cubicles are seriously from the '70s. Many of my employees have Frankenstein cubicles made up of mismatched cubicle parts. Very professional!
  • Office Equipment. Since our printer and copier breakdown at least once a week.
  • Real Paper. We have this cheap paper that is so thin that it constantly gets caught in the printer causing it to jam up and overheat.

Smack! That's the sound of me crashing back to reality. The $16k could have applied to any of the above things, but instead my company will waste it on a pointless activity that has zero impact.


I really enjoyed this post "beyond logic!!"

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