How (and how not) to throw money down the drain with process

You'd think that in the midst of the "GFC" companies would be looking at ways to make their processes more efficient, yet there are still many companies out there that like to throw money away hand over fist.

One of these companies is a furniture chain called Fantastic Furniture ("The package deal kings"). I like fantastic furniture. I don't like all their products, but I get what they are trying to do. They are the budget furniture company and they've pretty much got hold of their target market by the short and curlies. Now this isn't a story about customer service - it's a story of internal process. I'm not going to whinge about them from a personal point of view as when you buy something  cheap you often get cheap service - I can live with that if the price is right. But what I find amazing is when a company like theirs wastes money. OK, here's the story...

I looked online at their website and found a bed and cabinets that I wanted to buy. Actually I'd already seen it in the store. I would have loved to have bought online, but alas, no online store.

Mistake no 1: no online store.

So I call my local store and ask if it's in stock. Yes the bed is in stock he tells me but the cabinets will take longer. OK, says I, can I buy the bed now and collect the cabinets later? Yes, says he. All I need to do is pay a deposit over the phone go to the store, pay for the bed and then go and collect it at the warehouse?

Excuse me? says I. Can't I just pay for it over the phone and collect it from the warehouse? No says the man.

Mistake no 2: Poor process design fed by bureaucracy.

So I go to the store they look me up in the computer and alas I'm not there. We spend 10 minutes wrestling with the system and several calls to a mystery voice of god that tells them that that particular till doesn't work. They then find me and I actually get to pay for my bed.

Mistake no 3: Poor communication & IT support processes.

They then tell me that my items are all in stock - but wait didn't they tell me that my bedside cabinets were out of stock only 2 days ago?

Mistake no 4: Poor stock control and inventory processes

So I finally complete my transaction. Or at least I think so. The staff then take a manual docket pad and write out my receipt. Let me repeat that - THEY WRITE OUT MY RECEIPT. What on earth does their system do if it can't track stock and it can't print a receipt?

Mistake 4: Manual processes due to poor system functionality

So I take my hand written docket and drive to the warehouse. They give me an inaccurate map which gets me lost before I eventually find it. I get there and give my receipt to the chap at the warehouse. He looks at it and asks why I don't have a green slip. I tell him that's all they gave me. He grumbles that as they didn't write it out fully it will take longer to find the stock. He then proceeds to look up the computer and...write out another receipt. Did you get that HE WRITES OUT ANOTHER RECEIPT and gives that to me.

Mistake 5: lack of quality controls to ensure processes are followed

I eventually get all my stuff. It only took me 1.5 hours. But what did it cost Fantastic?

• Phone call - 5 mins
• Staff computer error - 5 mins
• Writing Docket - 2 mins
• Looking up system & re-writing docket - 5 mins

Total "lost" time = 17mins FOR ONE CUSTOMER AND ONE TRANSACTION!!!!

If you think about this in terms of the cost for 17 minutes of staff time multiplied by thousands of transactions you can envisage the amount of money fantastic are throwing away. Of course they could have avoided this entire 17 minute cost if they had an online system. But even if they didn't all they need is to update their system to be able to track stock in real-time and to eliminate the inefficient paper based system that they have become accustomed to. This would allow online tracking, reduce admin costs, control stock flow more efficiently and reduce customer touch time to allow their staff to concentrate on selling rather than performing laborious admin.

Fantastic, the Ninja has spoken. Please stop throwing your money away.

Comments

[AJ]

This is not surprising, I have found that many Australian companies operate like this. It seems that the good times (pre-GFC) has caused everyone to become lax and non-client focused. I have even come across financial companies (super, banking etc) that operate much in the same way as described above. Coming from a 3rd world country like South Africa, I have to say that Aus is at least 5 years behind as far as process control and customer service is concerned.