Picture this: A Sales person/designer accidentally orders a WC2442 instead of a WC2430 corner cabinet. The mistaken cabinet is not caught, so purchasing places the order with the manufacturer. Then the order is received into the warehouse and delivered to the job without anyone noticing the problem.
The installation has been scheduled, and when the installer begins installing the kitchen, the 1st cabinet he has to install is incorrect. Now the installer has to explain the situation to the installation coordinator and leave the job unfinished until he receives the correct corner cabinet. There is no WC2430 in the warehouse, so it could be weeks before the job can be finished.
Then the installation coordinator calls the salesperson and explains the situation. The salesperson frantically begins looking for a WC2430 to steal from another job, but to no avail. So he or she has to order the cabinet with a “RUSH” lead time. The sales rep now gets the scheduler to reschedule the installation. The builder or homeowner reschedules all other trades around cabinets and grows frustrated.
After two weeks the cabinet finally arrives. The warehouse tells the installation coordinator that the cabinet has arrived. The coordinator schedules the installation again; hoping that the salesperson ordered the right cabinet.
A seemingly minor mistake at the start, but often those “harmless” mistakes can create a disaster. Take a look at who in the company was negatively affected (some multiple times) by this “minor” mistake:
- Purchasing Person
- Installation Coordinator
- Superintendent / Homeowner
- Other Trades
- Even the manufacturer had to scramble
That’s pretty much everyone that’s involved with the job! A little focus and effort in the beginning of the process saves a lot of time and money. Here are some tips to make sure you have fewer “minor errors”.
How to Minimize Order Preparation Errors
1) Stop Rolling the Dice
- It’s a statistical fact that 1 out of every X orders that your people hand write (or hand key) will have an error (X varies by company). Every time a human writes or keys an order it’s a potential problem. The problem is especially acute when someone is re-writing or re-keying the same information, AGAIN. The answer: get rid of hand writing or re-keying information. Solve the problem at the SOURCE, instead of having employees double check others work multiple times.
- The only other way to reduce X in this is by double-checking orders more frequently in order to find these problems before moving forward. This is a very expensive option.
2) Control the Pricing Process
- While visiting a dealer in Washington, I watched a salesperson one time as he priced a kitchen. I was amazed at how he did it. He took the drawing and picked the largest, most expensive base cabinet and looked up the price. Then he took that price times the total number of base cabinets, essentially charging an inflated price for all but 1 base cabinet.THEN he did the exact same thing with the wall cabinets. I thought to myself, “Wow, this guy must be making the company big bucks”. He was doing high-end kitchens so I thought maybe that’s why he gets away with it. To my amazement, when I discussed this with the owner, his comment was “yep, and he loses money on most of them. He’ll either order it wrong or forget to price other items.”
- When you let salespeople have their way in the way they price or order, you might think you’re winning. A salesperson will always be proud of the job where they threw in an extra 5% or 10% margin just because they could, and talk about how much money they made the company.
But if they have that flexibility, you must know that there are just as many, and most likely more, that are sold for 5% or 10% less than you want it sold for. To avoid this you must have a consistent process that everyone follows.
3) Find Your People’s Core Competency and Design their Job Around it.
- We’ve all tried it; look for the salesperson that can do it all: design effectively, write up orders correctly, use a tape measure, remember to order everything, follow up on all the parts and pieces, etc. The problem is that these people don’t exist, and you’re fooling yourself if you’re still trying to train them to be that way.
- Find the right role for each one of your people, and let them thrive on what they do best. A great salesperson and a great designer will do more business than 2 good salespeople/designers. And they’ll produce more profit at the same time.
4) One Source of Information
- You must have a single reliable source of all pricing information, preferably in a system and available to everyone. It needs to be an up-to-date repository that everyone can have access to in order to have a correct foundation for their quotes. This repository cannot reside in a file cabinet. It needs to be a company-wide system.
With some dedicated focus in the right areas, you can alleviate your company from many of the order preparation issues that otherwise seem unsolvable. There are so many headaches in the cabinet industry already. Don’t torture yourself by struggling with the unnecessary ones.
This article was originally published in the Kitchen & Bath Business magazine in November 2007.