MD – Can someone please tell me why we are still spending £1,000s per month on waste collections when I signed off on a waste compactor purchase that was to save us £30k in year one?
Operations Manager – Well the machine has had a number of faults and has broken down a lot. It worked OK for the first few weeks but had been nothing but trouble since. When it’s down we have no choice but to get an open skip in from ABC waste but it always takes at least 24 hours.
This means we have waste everywhere and have to pay Dave in the yard overtime to pick it all up again and load it into the skip. I won’t even go into the knock on problems it causes production, goods in and dispatch.
MD – So what do the suppliers say about the problems with the machine? If they can’t get it fixed just tell them to take it out and give us our money back.
Operations Manager – If only it were that simple. We got it on a lease deal with a finance company, so we don’t deal with the supplier directly. ABC waste don’t have any engineers as they just do the bins and they shut at 4pm as they start early. They tell me it’s down to the supplier who keeps telling me they will get it fixed but its always 2-3 days before they get an engineer in and then he doesn’t carry spares and has to order them from the Far East!
By the time the engineer gets back in, the machine has been down for a week at least. On more than one occasion its been down for over 3 weeks! Turns out the supplier doesn’t even employ any engineers and uses subcontractors.
What’s even worse is the warranty is parts only on exchange so we have to pay their invoices for labour and travel and for whatever parts are ordered before they will ship them.
Then if we don’t send the broken parts back to the manufacturer at our expense, they won’t even look at crediting us. I’ve got a box in my office with all the failed spares in but haven’t shipped them to the manufacturer due to the cost…. it’s a nightmare!
So far we’ve spent over £3,000 on labour, travel and replacement parts that should be under warranty. We’ve also spent a small fortune on additional skips, overtime and downtime and I’ve got no budget to pay for any of it as the money was allocated to paying the lease costs on the compactor.
MD – Who set this deal up? I thought procurement were involved?
Procurement Manager – *gulp* We were involved Sir. We followed our standard procedures and got 2 alternate quotes but they were both dearer and had longer lead times than the co we went with. They were highly recommended by ABC waste who said they’d dealt with them before and they put a temporary machine in on free trial while they built ours.
Sound familiar?
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