Cost cutting lead to increased breakage and customer dissatisfaction

I got a phone call from our largest customer that the last delivery contained some broken jars. I apologized and had someone drive over with replacements.

I then asked everyone how this could have happened. The production manager said he wanted to save money and reduced the amount of packaging we were using. I told him what happened and how this wasn’t a good way to save money.  He looked sheepish and said there was 12 more deliveries with less packaging.

I made him ring each customer. We found six more broken jars.

With inflation and currency devaluation, delays in payment are causing us to lose real money

When we wrote our business plan and figured out our working capital, we thought we would be paid within 30 days of sending out the invoice. To be safe, we used 45 days in our models and made sure to have funds available.

The inflation rate is now over 10% and there has been a 40% devaluation of the currency. This means it is really important to collect cash quickly.

We just signed a new agreement with a mobile platform and it stated they would pay within 30 days. They did on the first three invoices, but then they took 60 days and now are up to 120 days. They are much bigger than us and we need them to survive but with a 120 delay in payments we are running out of cash every month. The banks won’t help. In real terms, we never get our money back. We can’t delay our payments out to 120 days.

I fired Alan after he was rude to a customer

This was the third time Alan had been rude to a customer. I spoke to him but he ignored me and didn’t listen to what I had to tell him.

This time the customer wrote to me and told me what had happened and said this was the last time he would do business with us. He bought 3.4% of everything we sold, so I went to see him myself and said I would handle his account. He demanded we fire Alan. I was so mad that when I got back to the office, I called Alan into my office and fired him. I refused to write a reference and just paid him until the end of the month.

Everyone in the office was surprised by my reaction but no one said anything.