Purchasing & Supply Chain - Improving Sales Orders

It was mid-1979 and I had just been promoted to Purchasing and Materials Manager at an Eaton in Darlaston, West Midlands. It was a relatively small unit with 200 employees making heavy axles for lorries. Slightly different from the one in the North East, with higher volumes but no differential set so a lower unit price for the finished product. We supplied a range of customers including Foden who took a 1” thick axle which needed a 2000T press to bend and form. The whole building shook when this was in action.

It was fairly obvious from day one of the purchase of this factory from Rubery Owen that at some point in the future the two businesses would be amalgamated and a move back to the North would be on the cards. The largest purchase was sheet steel which came mostly from Scandinavia so the Supply Chain could be quite long, especially in the winter when the North Sea froze over!

There were only two suppliers in this business in those days, Eatons and another well-known automotive business, so there was quite a competitive environment for which one of us would get the most business. The buyers in the automotive trade were the best in the business and agreed with our sales people what percentage of the business would be allocated to each of us. This system applied to all the customers in the market and there was a constant competitive battle between the two suppliers.

I was drawn into this competitive battle because the business was not won on price alone but also on our delivery performance record, and I was encouraged by our Procurement Director to keep in close touch with our main customers and keep the supplies on time, which had not been happening recently.

So I began to hold a monthly meeting with the 2 main customers where more than 50% of the business was involved and quickly set up a good rapport. This involved a day long visit each month where a long drawn out boozy lunch was the order of the day, followed by detailed discussions of the next two months’ worth of orders. Whilst the business split was "locked in stone” by the supposed “agreed” split between us and the competition the detail of the actual orders in the following two months was left to the discretion of the schedulers at the factories who in reality wanted an easy life with a guarantee of delivery promised in stone. So we went through the actual schedules planned as orders where I was able to influence the numbers of axles line by line based on the numbers of units I could actually promise. These numbers were changed on the schedules and re-issued.

The bottom line then worked out that we always had the lions’ share of the business and the split moved to 60/40% split in volume terms in our favour and an increase in business. We got away with this as the other supplier did not realise the numbers were being modified and we always met the volumes as requested.

This went on for about a year before we actually closed the factory and transferred the business back to the factory in the North East from whence I had come a year earlier and I was one of only 2 people who was kept on and asked to return North to a higher level role.