[VIDEO] The problem with delegating ordering tasks to staff

When I first met with this particular client he had huge cash flow problems in his business. When we sat down and spoke about these issues whilst working on the performance review for his business, we realised that there was a trend.

The Challenge…

His staff, who had full control over ordering the stock in his business, were not doing it as regularly as they should have been. That is, instead of ordering stock every month, they were ordering around every three months or so, and it was very, very irregular. Because the ordering of stock was so irregular he had these huge bills come in every three months which obviously impacted his cash flow significantly causing a lot of frustration for him.

What we did…
We looked at his stock and saw how much stock on average he ordered in a year or what the proportion of stock ordered was based on his sales. We decided to do a very simple thing. We looked at how much stock was ordered in a year, divided that by 12 and determined the amount that his staff should be ordering every month.

The Result…
This created a performance measure for the staff, or a Key Performance Indicator (KPI) which allowed him to track their performance. This meant that when it comes to salary increase, bonus time or staff performance reviews he actually had an indicator or target that he could make sure the staff were maintaining. It also helped his cash flow and improved the relationship and communication between the staff and the business owner.

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