As Management Consultants, our work often mirrors everyday experiences. Take, for example, a visit to the doctor. While the doctor initially focuses on symptoms, their primary concern is identifying the underlying cause. Once the root cause is addressed, long-term health can be achieved.
Similarly, businesses often call us in to solve specific issues, which are usually symptoms of a deeper problem.
One such case was a building products company that approached us because they were facing an “inventory problem”. They had too much stock, much of which was slow-moving or, worse, not moving at all.
When we arrived at the client’s site, the issue became immediately clear. Both the undercover warehouses and the open yard were filled with stock in various sizes, shapes, and configurations. Our task was to determine the root cause of this excessive inventory.
Common assumptions might include:
However, at Stoke Consulting, we don’t jump to conclusions. Instead, we began by asking key questions to some of the client’s most knowledgeable employees:
We asked the same questions to different people and compared their responses. In this case, none of the commonly assumed causes were responsible for the overstock.
So, we dug deeper, employing a method similar to the Japanese “Lean, 5 Whys” technique, where we ask “why” multiple times to uncover the root cause. Our questions included:
Our findings were surprising and unexpected:
The initial orders for many of the overstocked items came from the Sales department in response to specific customer requests. These items were often obscure: unusual colours, dimensions, small quantities, and similar niche products. Despite the limited demand, orders were placed with suppliers for minimum quantities, which far exceeded what the customers needed.
These orders were largely unchecked. Purchasing and Finance departments were often overruled, and the orders were placed anyway.
The result? The client’s warehouses became filled with large quantities of leftover stock that had been sold in small lots. Worse, these products were so unusual that other customers had no interest in them, leading to significant overstocking.
Stoke Consulting recommended the following actions to the client, which were agreed upon:
The end results were highly positive:
Do you have a problem in your business? Do you need help to get to the bottom of its cause?
Stoke Consulting can help you with this. Contact us to find out more
Previous line management roles (Supply Chain, Customer Service, Logistics, Sales Management) in SME businesses through to large companies have underpinned Rod’s success with a variety of clients. Key solutions in previous engagements have included Project Management, Business Improvement programs, Facility Development and Relocations and Company Governance.