a PO for $1.08

[sammyg2]

I received a mail envelope today from one of our vendors. it had about 90 cents worth of stamps on it.
Inside? A 1/2" lock washer. no one knows what it is for.

I did some digging, there was actually a purchase order issued for $1.08.

I'm gonna push this one way up the ladder aways.
To write a purchase request, process the PO, pay the bill, do all the accounting, costs about $250 when it's all said and done.
What kind of dumass submits a PO for $1.08, and what kind of vendor accepts it and pays 90 cents to ship a freaking lockwasher than no one knows what it is for?
ARRRGGG!

[lendaddy]

Some ass munch middle manager probably told some project manager "everything gets a PO!".

[stomachmonkey]

Originally Posted by sammyg2

I received a mail envelope today from one of our vendors. it had about 90 cents worth of stamps on it.
Inside? A 1/2" lock washer. no one knows what it is for.

I did some digging, there was actually a purchase order issued for $1.08.

I'm gonna push this one way up the ladder aways.
To write a purchase request, process the PO, pay the bill, do all the accounting, costs about $250 when it's all said and done.
What kind of dumass submits a PO for $1.08, and what kind of vendor accepts it and pays 90 cents to ship a freaking lockwasher than no one knows what it is for?
ARRRGGG!

I have this sign hanging in my office.

It says "Nothing is insignificant"

On it is taped a 1/4 in white paper donut, kinda like those binder hole reinforcements that you see in three ring binders.

Years back one of my 72 in plotters had an intermittent malfunction. It had a paper take up roll on the bottom with 6 or so fans that would dry the print and roll it up on a tube. Essential when running graphics that were 100 ft long.

Damn take up roll never worked correctly. I had basically given up when one day had a guy out to service one of my other plotters, different brand BTW.

We are looking at the problem one and he asks me how I like it, told him I love it except for the flaky take up roll.

He bends down, looks at the sensor that detects paper and triggers the roll. He peels of the little donut and the fucher starts working.

Guy says they see it on their stuff, some of the early sensors were too sensitive and would make the roller run non stop so the manufacturer put the donut on which sometimes caused the opposite problem.

So my $30,000 piece of equipment had been crippled for two years by a paper donut.

Nothing is insignificant.

[stomachmonkey]

Originally Posted by lendaddy

Some ass munch middle manager probably told some project manager "everything gets a PO!".

You know that's the truth.

Probably someone trying to make a point.

[nostatic]

Originally Posted by stomachmonkey

So my $30,000 piece of equipment had been crippled for two years by a paper donut.

Nothing is insignificant.

[sammyg2]

Originally Posted by stomachmonkey

You know that's the truth.

Probably someone trying to make a point.

Yep, some worker-bee doing exactly what the boss told him or her to do is my bet.
Peter principle in action.

The shipping memo and the washer are going up on my wall of my office.
If I tried I bet I could find several hundred 1/2" lock washers in my shop made of steel, 300 or 400 series stainless steel, hastelloy, monel, you name it.

Ironically one of my vendors called me this afternoon asking why it was taking so long to get paid for about $10k worth of orders. I had to bite my tongue.

[David]

I'm constantly frustrated that as an engineer, who's not supposed to deal with commercial issues, I spend about 10% of my time with purchasing issues

I guess it comes back to the old saying that you can make engineer into an accountant but not the other way around.

Thankfully most of us are issued credit cards for the little stuff.

A couple weeks ago I needed to get some grinding done by an outside shop. Purchasing thinks all vendors are the same and that we all ready have too many grind shop vendors at three. So when those three can't do the grinding, I pay one of those three a 15% markup to cut a PO to the fourth shop

[competentone]

Originally Posted by sammyg2

To write a purchase request, process the PO, pay the bill, do all the accounting, costs about $250 when it's all said and done.

$250 for that!?!

It sounds like you should be working on the more serious problem with your accounting system rather than worrying about the lock-washer.

There is definitely a lot of fat that can be cut out of your business if it costs the company $250 of "processing" to make a single purchase.

It sounds like some "paper pushers" need to go.

[Zeke]

Originally Posted by competentone

$250 for that!?!

It sounds like you should be working on the more serious problem with your accounting system rather than worrying about the lock-washer.

There is definitely a lot of fat that can be cut out of your business if it costs the company $250 of "processing" to make a single purchase.

It sounds like some "paper pushers" need to go.

Sam works for a big oil company at a refinery. I imagine the washer was documented like an aircraft part. They just couldn't find where all that paperwork is. If they look, the washer will become a $5000 part.

[sammyg2]

Originally Posted by competentone

$250 for that!?!

It sounds like you should be working on the more serious problem with your accounting system rather than worrying about the lock-washer.

There is definitely a lot of fat that can be cut out of your business if it costs the company $250 of "processing" to make a single purchase.

It sounds like some "paper pushers" need to go.

Sigh, it's just business in the US.
A person enters a purchase request. Of course they need a work order to charge it to so they submit a notification that someone else plans and turns into a work order. That work order is tracked and eventually reconciled.
The purchasing department issues a PO from the purchase request. It's tracked and eventually paid. The account is managed, books are kept, all that takes time. people's time. Those people doing that work have supervisors. They have people in HR supporting them. they have people in IT supporting them. There are lots of hidden costs that you will never see until you do a total detailed analysis and I've done plenty over the years. Yes there are some silly steps that don't add any value but most are required by law to comply with acceptable business practices.

Even a little business with 10 employees will rack up accounting costs at a surprising rate when you factor in all the hidden costs to support them. Figure the cost of paying an acountant (and all the costs to support them) and spread that cost over the tasks he or she performs and you get the true cost to perform those tasks.
These numbers are usually not analyzed because they are considered indirect costs but if you really look at them you will see how much it really costs to do business. $200 to $250 to fully process a PO from start to finish isn't that unusual. That's only about 3 billable hours when total costs of payroll, benefits, office space, computers, software licencing, etc. are all considered.
That is why managers usually have gray hair.

Plus a business like the one I work for that does $28 billion a year in sales has to have a pretty big accounting department.
Accountants are like lawyers. They create their own need. They make their own rules. They make their own vocabulary. You can't do business without them.

[Rick Lee]

One of my large clients regularly sends us PO's for 5x what they actually spend, so they won't have to do another one if they have a big project that eats up the rest of the money.