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Manager okay with letting suppliers rip off the company

the part I wanted was $50, the part I got was not the one I ordered, it was comparable from the same catalog and it was $180. I can understand a little bit of a markup but 3.5x isnt it and like you said neither is 10x. As far as repairman and parts, they're supposed to charge you for the labor, not mark up the price of supplies. And as far as the 10x markup, I found the exact model online for $40-$120.
They do markup the price of spares, how do you think they pay for it and maintain cash flow. It's called the cost of money. The only time they don't get to mark up the spares is if you supply them.
 
The correct procedure here is to box it up and send back "not as ordered".
Do you have purchasing authority at your company? Could someone else above you have decided to buy the better drill?
Would be pretty rare for a vendor to sub a higher cost part without prior authorization. Written PO or a Verbal? Priced or advise cost?
It is possible that someone else decided to buy the better drill but it is much more likely that they would have checked with me first. I'm the only one that runs the CNCs.
 
Then do the right thing. If you brought it to her attention and she agreed that what is happening is unethical - but she continues to allow it; she has taken food from her own table.

Never sacrifice your moral values. If this is truly a problem, you must do what you think is right regardless of the consequences.
The problem is it is I don't have concrete proof. I have proof that the company is spending money unnecessarily and nothing is being done about it but that's about it. My biggest question is, Why do 2 different people feel comfortable enough to do this? I think she just doesn't care enough about saving the company money, not that she is doing anything nefarious.
 
It is possible that someone else decided to buy the better drill but it is much more likely that they would have checked with me first. I'm the only one that runs the CNCs.
Now that I think about it, I would think what probably happened is, he presented the drill as if it is the one I asked for and she okayed it. I think im going to talk with her today and find out. I did mention to her the other day when she showed me the billing, that I ordered a $20 drill but she didn't seem phased by it.
 
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To sum it up. You give the supplier a wish list, supplier gets a P.O. from purchasing and sends you whatever the supplier wants. To fix it there needs to be a process in place: You send a purchase requisition to purchasing/your manager, purchasing issues P.O. and orders tooling. If tooling comes in and isn't what you requested then you talk to purchasing. This way purchasing is responsible for setting the tool supplier straight. You can't cut P.O.s so the the tool saleman doesn't care if you're happy.
 
**Update**: I am not able to edit my original post at this point but I have good news. I spoke with my manager about it and she seemed surprised and upset that this happened. I told her everything that I knew and she said that she would either speak to him about it or keep an eye on it from now on. I believe she was genuine the only weird thing about was that she seemed more upset about this then the time the repair guy was charging us $1000 for a $70 POS from China. Either way, I am happy with her response and I appreciate all that gave good advice.
 
the part I wanted was $50, the part I got was not the one I ordered, it was comparable from the same catalog and it was $180. I can understand a little bit of a markup but 3.5x isnt it and like you said neither is 10x. As far as repairman and parts, they're supposed to charge you for the labor, not mark up the price of supplies. And as far as the 10x markup, I found the exact model online for $40-$120.
Repairmen absolutely mark up the parts they order for you. They take the time to order. They pay for it up front then have to wait to get paid by the customer (if they get paid…)
You need to charge for that. Personally I do 30% markup if it touched my hands. %100 if it’s under $20. Now if it’s a huge priced item maybe less.
But it’s riding on my credit untill(if) I get paid
 
imagine getting fired for trying to save the company money and not let them get stuff pulled over on them. don't project onto others, just because your job isnt secure doesnt mean others aren't either.
John has a long posting history of doing or complaining about rule breaking. That said, it’s a warning worth taking to heart. I’ve been in (and am glad to be out of) a few employers where the one bringing attention to issues could get one in trouble. Sometimes it was because it made someone in power look bad, either for wrongdoing or for letting it happen at all. Not every employer is like this, but enough are that you should be aware of the risk.

I found an egregious, and IMO systemic, safety risk at a Fortune 100 company. The problem was that I (intentionally) chose to bring light to the issue in a strongly worded email to the plant manager. He was able to swallow his pride just fine, but didn’t like that I had put it into (legally discoverable) writing. Fortunately for me I was willing to lose my job over if, and my boss had both the ability and interest in backing me up because I was right. Had I tried that at some of my other employers I wouldn’t have gotten a raise at the end of the year for “performance issues”, assuming I still had a job.
 
Repairmen absolutely mark up the parts they order for you. They take the time to order. They pay for it up front then have to wait to get paid by the customer (if they get paid…)
You need to charge for that. Personally I do 30% markup if it touched my hands. %100 if it’s under $20. Now if it’s a huge priced item maybe less.
But it’s riding on my credit untill(if) I get paid
And that seems fine. 1000% and above is not
 
John has a long posting history of doing or complaining about rule breaking. That said, it’s a warning worth taking to heart. I’ve been in (and am glad to be out of) a few employers where the one bringing attention to issues could get one in trouble. Sometimes it was because it made someone in power look bad, either for wrongdoing or for letting it happen at all. Not every employer is like this, but enough are that you should be aware of the risk.

I found an egregious, and IMO systemic, safety risk at a Fortune 100 company. The problem was that I (intentionally) chose to bring light to the issue in a strongly worded email to the plant manager. He was able to swallow his pride just fine, but didn’t like that I had put it into (legally discoverable) writing. Fortunately for me I was willing to lose my job over if, and my boss had both the ability and interest in backing me up because I was right. Had I tried that at some of my other employers I wouldn’t have gotten a raise at the end of the year for “performance issues”, assuming I still had a job.
I didnt take what that donkey and some of the other JOs said to heart. I was trying to point to their stupidity and negativity on the small chance that they may look in the mirror and reflect. As to your other point, I agree there is always a risk. I highly doubt I would lose my job if I brought it to the higher ups' attentions. I am not naive, rarely is a job ever fully secure but I am pretty valuable to this company. This doesn't mean I can do whatever I want but I do have some leeway as far as I can tell. What I was worried about is what was happening, what would happen to my manager, and what our relationship would turn into. Lucky for me, I brought up what happened to her today and I was happy with her response.
 
So a $930 markup on a $70 item sounds reasonable to you? sheeesh
The statement was that the person doing the repair doesn't get to mark up for their work of acquiring the part, that is naivety. Whether the price charged is fair is a completely different matter.
 
A new start guy asked me where the 'suggestion box' was ,because he had some ideas for improvement .......I says put your suggestions in a sealed water proof envelope ,and deposit it third cubicle from the left .....then flush ...............Col (the boss) calls any suggestion about the business "argufying".....and it will get you fired.... quick smart!
 
Why can't you get an MSC, McMaster or some other account setup so you're authorized to buy your own stuff?

Seems like a lot of bureaucracy for a small company. If they don't trust you, maybe it's time to move on.

"Holacracy" or Decentralized command - Jocko and Tony Hsieh style of management empowers the whole team to make decisions.
 
Your manager may know all the computer programs necessary to run an office but may not know the difference between a hatchet and a drill. People are reluctant to admit they are ignorant about things. Most larger co's have a purchasing agent, which is a job by it's self.
So she just processes the paper work with out question. You bought it to her attention which was the right thing.

I've been on both sides as sales and consumer. We had an MSC salesman when I started here and he was very good, knew the product and pricing was never a problem.He would never do something like your drill drama without asking. However the hardware sales people are all terrible.
A large corp like ours the worst thing to do is let one of the major suppliers come in manage your hardware especially nuts and bolts. About the only good that has come out of it is we got some really nice bins and cabinets.

We have had only one bad maintenance supervisor. He started bringing in outside contractors to do work we always did in house. When I questioned him about it he put me on night shift. Turned out he was getting kick backs from the contractors. I told him what I thought of him in front of the HR department head. Funny ,I was actually somewhat relieved because I was doing a major rebuild job that during days it was hard to keep focased on with constant interruptions.
I was suprised the day they fired him the CEO came by and said to start back on days now.
 
I am not sure if I am posting in the right place per usual but I have an issue. I work at a place that is owned by another company. Before we order something, it has to be okayed by them. Ok now to the meat. I have been getting very bothered lately. Our suppliers and repairman either keep overcharging us or order more expensive tools that we didnt ask for. The first time I noticed it, the repairman bought a cheap part that I found the exact one online for $70. The cheapest I found it was $40 and the most was about $120. He was charging us $1000 for the part alone. I brought it to my manager's attention, mind you this is after I told her that he does poor work. Sure things get fixed but they are just barely adequate. For one he changed the tool probe and it was misaligned. Sure I could use it but he was too lazy to make it how it should be. Among many other things, like that I had to stop him from overcomplicating things, therefore making things more expensive.
Back to the meat, I brought it to my manager's attention and she seemed to be on my side but then she still let him charge us $800 for part. She still continues to use him to this day, which is fine to an extent but what else is he overcharging for? Now onto our supplier. A while ago, I ordered a tool from him and I believe it was $50, I saw the invoice and it was a comparable tool from the same catalog but it was $180. I mentioned it to the manager in passing but didnt make a big deal. Nothing changed. Now I just ordered another tool and it was $20. Guess what? We got a comparable tool instead, again from the same catalog, and it was $125. He even tried to lead me away from it when I was ordering but I pointed to the one I wanted, he took a picture and said he would get it. I just dont know what to do anymore. Im not one of those suckups that is corporate this and corporate that but I do know what it is like to run a small business. Every dollar matters. What do I do? As of right now, I get paid an amount of money that I can't complain about, my job is pretty cushy and I don't want to make waves. On the other hand, I don't feel right just standing by idly and letting us get overcharged for things that we don't need. Also why do these people feel like it's ok to keep doing it? Is my manager knowingly letting them do it? Any input would be appreciated. Also I have proof that I went to my manager and told her about the $1000 overcharge but I don't want to get someone fired. Do I get more proof for this time and do something about it if nothing happens? Quite the pickle.
This won't ever be fixed unless the Managers and/or people responsible for administering vendors & subcontractors are responsible, competent, and "problem solvers" (e.g. watch dogging vendor's & subcontractor and having alternates identified, on-hand if something goes south with a current one). If you've got an admin layer simply accepting vendor quotes with little or no behind the scenes "trust but verify", this is what happens.
 
I'm not sure about your contractor but your tooling provider may have simply supplied an alternative due to stocking issues. It's happened with me a few times where I've spoken to my tooling rep, ordered a drill for a job that's in the machine tomorrow morning. Their stores identified a stocking issue and supplied the closest alternate product they had. In my instance I was notified but I can see if they have multiple points of contact within your company then the word may not feed back to you.

I would query directly with the person responsible for cutting the PO and get them to look into it. If this is happening routinely then speak to them about alternate vendors. There are loads around and most of them are hungry for your business so switching shouldn't cause any problems your end.

For your contractor it could be down to their source of the parts. For instance I broke a shear pin in my Marposs probe in my HAAS about a year ago. HAAS sold the replacement for something crazy. Can't remember exactly but if it was under £100-150 I would have just sucked it up and bought it so my guess would be somewhere around £200. I spoke with Marposs directly and after a bit of back and forwards to identify the correct pin they managed to supply 5 pins (to meet their minimum order charge) for something like £70. Now if I had bought someone in to replace the pin in the probe and recalibrate I would expect that they would go direct to the OEM for parts and apply their own markup on top. You'll know a lot more by having a conversation with the service engineer. If you just mention that you think you were overcharged for parts fitted they should at least be able to justify the costs. If not then it's worth looking around for a new service engineer but that would be down to the company (better the devil you know and all that).

All you can really do in this situation is make your manager or purchasing person aware. If they choose not to act on that then it's probably not worth it for you to rock the boat as you may be seen as a problem maker by going above their heads.
 








 
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