The Chaos – 1

Since last one year, the CEO and Director were backing a particular supplier whom they want to see emerging as a strategic supplier. The duo have been trying in several ways and methods to push through this supplier. But due to unknown reasons, this supplier always met with resistance from the cartel, VP and the purchasing manager.  The operations’ guys went on finding one problem or the other in his supplies. Invariably, on each episode CEO and Director intervened to resolve the issues in favour of the supplier. Let us call this supplier RNC.

The recent case was that he supplied poor quality raw material to a toll processing location.  The toll processor refused to accept any responsibility as the material was supplied by us and our QA representatives were present in the location.

RNC vehemently refused to accept this allegation. His argument was that the rejection was notified to him only after 24 hours of supply. The Raw material being perishable in nature, the rejections have to be informed then and there, as the suppliers’ representative was present on the point of supply. RNC alleged that our QA representative informed him on phone as well as to his representative in person that material is good and he is clearing the material. But the next day morning the Purchase Manager called him on phone to inform that raw material had yellow spots, so the end product is also having yellow spots.

RNC said that after the trucks reached the toll processing unit on that particular day, he immediately called the Purchasing Manager on phone and asked if everything is in order. The Purchasing manager informed him the trucks had arrived  but he was waiting for QA’s clearance. RNC alleged that he again called up the purchasing manager after sometime and asked him “is everything in order?” to which the purchasing manager alleged to have replied “yes, all is well, no problem”. RNC further alleged that he did not receive any call until the next day morning to be told that 12 tonnes of raw material were of bad quality.

Purchasing manager told that he informed 12 tonnes rejection on the same day evening, but RNC refused to take back the goods and seemed to have uttered a few expletives during the phone call. Because RNC’s outburst, the Purchasing manager did not take further calls from RNC. As the material will get spoiled fully if not processed, the operations’ team decided to use up the raw material despite the yellow spot problem. So out of the total material produced at the toll processor’s facilities, around 12-15 tonnes are sub-standard and may not be accepted by the customers. This made butterflies fly in my stomach, made me wonder for a few minutes how I would be able to dispose of this 12-15 tonnes. After 5-6 months, these operational goof-ups would be forgotten, and the poor sales guy would be under guillotine for not being able to dispose of the material.

To me, many of the arguments and the counter-arguments put forward by RNC’s side and the Operations’ side did not tally in full.

Isn’t the raw material quality inspection a serious matter? isn’t it prudent that any quality deviation especially during a stage when it can be avoided be disposed off through appropriate and prompt action as quickly as possible? Why the delay in communicating to the party? Even if it was informed the same day evening as claimed by the purchasing manager, it was still not acceptable.

From the sketchy narration by both sides reveal that our guys forgot the standard operating procedures and RNC has no clue how a professional supplier will resolve such stalemate. RNC like a crying child, complained about all these to CEO and the Director. Both felt that some kind of injustice is being meted out to this fledgling supplier.

The director in his concluding remarks found blame with VP who had become dormant when these incidents were unfolding. The director also voiced the suspicion that the toll processor may have also played dirty in it, as his own production was also going on simultaneously with that of ours in his factory. The director said that we should have agreed for toll processing arrangement with the party only with the condition that our production will take place exclusively on the days he does not do his own production.

The points exchanged seemed to have contained subtle overtone. An indifferent observer could make out easily that the  CEO / Director combination was trying to nail down the VP for his omissions and commissions. They seemed to be in search of subtle clues of collusion between Purchasing Manager and VP. Throughout the meeting, VP was a man of few words. He wanted to emit the perception that he was not handling this and it was being managed entirely by Purchasing Manager and the other Cartel members.

Purchasing Manager was a glib talker. But one can’t help sensing rehearsed quality in his words. I think that for normal human beings, it is very difficult to stay unemotional when allegations are flying left, right and centre.

RNC got emotional many times, at times so emotional that he swore on kids that he was not lying. The purchasing manager to me appeared a bit guarded and appeared unmoved by RNC’s allusion of him lying.

The meeting ended a bit inconclusive. Both RNC and the Purchasing Manager were asked to shake hands. VP appeared nonchalant. I did not fail to notice that he ate very little during the joint lunch that we had after the meeting.

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