Is it really that hard to deliver products on time and as ordered? David Moore from retailer Moore by Design has a few home truths for manufacturers... 

Now that the furore surrounding the KBSA is abating a little, I would like to highlight an issue that, I suspect, affects more retailers more frequently than any problems with the KBSA, yet which receives virtually no attention.

I'm talking about stock control and order processing among the leading appliance manufacturers.

Out of the last ten kitchens we have ordered only four appliance orders were received in their entirety at the correct time - a 60% failure rate.

As a bit of background, my company employs the services of a warehousing company to receive goods and redeliver to clients. We account for this service in the cost of each kitchen but it only works financially if the goods we order arrive in their entirety in the week for which they were ordered, and we give between 5 and twelve weeks notice. If they arrive late and the kitchen has left the warehouse for delivery to the client then we must pay extra to deliver the late items. If they arrive early we have to pay to store the goods until they are required. 

If appliances are out of stock we have a couple of options, each with its own risks: 

* Rearrange the late delivery to our premises to avoid handling and delivery charges - this often means the suppliers system must re-process the order and we lose our place in the backorder queue. Plus we have to waste valuable fitters time asking them to collect and deliver appliances from our premises - not their job or their problem, and not paid for. Sometimes, our new delivery instructions are simply lost in the system and goods arrive at the warehouse regardless. 

* Keep delivery to our warehouse (and keep our slot in the backorder queue) and incur handling/storage and delivery costs. 

Either way, if appliances are out of stock there is significant management time involved in organising a backup plan with future deliveries and installations to arrange and pay for, not to mention breaking the news to an annoyed client. If more than one supplier lets us down on any one kitchen, the annoyance becomes disbelief and we are (understandably) seen as utterly incompetent. The trust we have spent months building upon can be destroyed overnight. We can only ever be as good as the suppliers we depend upon, however many failsafe and quality control procedures we have in place. 

We order our appliances at the same time as the furniture so when they arrive early we also have costs. Each order is clearly marked with a forward delivery date but goods still arrive early because the order was not read correctly. 

When appliances arrive early we are faced with two options: 

* Supplier uplifts and redelivers - Given the choice of either paying storage charges (average £10-£200 depending on time and size of delivery) or collecting and redelivering all suppliers so far opt to collect and redeliver. In the best case scenario we still pay for storage of the goods for a week while they await collection. In the worst case they fail to collect but then redeliver a duplicate order which results in duplicate goods, duplicate storage, confused accounts people at both ends, and untold hassle in unravelling the problem. Either way the responsibility becomes ours to check and make sure they do collect the goods as they promised (more management time and scheduling). 

* We could keep early goods in stock until required, and treat the incoming invoice with extended credit to the month it was ordered for and deduct the storage costs from the supplier's payment. No suppliers have ever opted to leave appliances in storage and pay for the costs but we often agree to swallow the extra storage costs simply to avoid the hassle and likelihood of future problems with collection and redelivery.

In these situations to give credit where it's due (no pun intended!) they always agree to adjust the payment terms accordingly.  I suspect each supplier is aware of the problems they have but I doubt each supplier knows that the compound consequences across all suppliers for each dealer can easily run into thousands of pounds of wasted money (profit) every year - using the table and expanded to our annual average of 80-100 kitchens, we (ourselves and/or our suppliers) are wasting over £6,000. Some of our suppliers reimburse us although the responsibility is on us to change our ordering procedure, and our internal accounts procedure to ensure this (and it’s different for each supplier!). Either way, whether the cost is reimbursed or not surely it is a waste of money which could be avoided?

Given that this is not a new phenomenon and doesn't appear to be significantly improving I can only see four explanations: a) our suppliers are intentionally running low stock levels to save a few quid; b) they are unable to operate efficient stock control procedures; c) they are unable to produce enough products or d) they believe this is an acceptable standard. I suspect it is a combination of all three with the emphasis on (a). 

I would point out that most of our suppliers at sales office level, and in particular their area sales managers, do their utmost to alleviate the consequences of these issues and in many cases are very successful. However the fact remains that the industry as a whole is suffering and I would like to see the stock and ordering problems eradicated at source.  Project managers up and down the country must waste hour after hour, on a weekly basis (at a hidden industry-wide cost of hundreds of thousands of pounds annually), dealing with problems beyond the occasional, tolerable hiccup.

Can our suppliers deliver our complete order, when we want it, as the rule not the exception? If not, can they tell us what we can do to minimize the impact these problems have on our businesses? - some manufacturers ask for as much notice as possible, whereas with others a long lead time is, believe or not, actually detrimental.

Am I expecting too much? 

What do you think? Letters@kbbreview.com