“Just put the juice on the table, and please bring the liquor over here Juan.” “Sí señor.” Isaac has come in early, because this is the day he receives his inventory. “You didn’t have Gin on your list Mr. Isaac, I brought some just in case.” “That’s fine Juan, I will use it eventually.” The two men finish unloading the supplies, then Juan heads for the door. “Hasta luego Señor Isaac.”
During the past two years, Isaac has been able to get a fairly good idea of what sells, and how often. He also knows that some products are often backordered depending on the season, so he makes sure he adjusts his ordering accordingly, and allows enough lead time. If he wants to compete with the other bars, he certainly cannot be running out of product.
“Good Morning Isaac!” “Carter! I’m surprised to see you up so early. Where are the others?” Isaac does not normally see Carter until much later in the day, and always with his friends. “I had to take it easy last night and didn’t sleep well.” “Good God man! What happened to your face?” Isaac has just noticed a great deal of swelling on Carter’s left cheek. “I was in the jungle, and I got stung by a bee.” “Did you get it looked at?” “Yes, I went to the doctor, and he gave me antihistamine, and said I’d be fine.” “Bees! At least they have a purpose, unlike wasps!”
“Looks like delivery day Isaac. Need a hand putting things away?” This is a side of Carter Isaac has not seen yet; up to this point he has appeared to be a young partygoer who is a little self centred. That being said, Isaac did get him out of jail the other day. “Sure, why don’t you put the beer away, and I will take care of the rest.” The two casually start placing all the bottles and cartons on their respective shelves.
“Do you have a system for ordering Isaac?” “Absolutely, I don’t want to run out of anything, but I don’t want to tie up too much money in stock and warehousing space either.” “I remember this part Isaac; Economic Order Quantity, Just-in-Time...” “It’s all very real Carter, it’s not just theory. The only problem is, knowing where to use which method, and how.” “How’s that?” “Well take this bar for instance; if I knew that every day I was going to sell the exact same things in a specific volume, I could use a system such as Just-in-time. But I don’t know, I only have an approximation based on analysis over time; furthermore, it changes depending on the seasons, and the clients that come with them. For example, spring break, which is actually several weeks, but the various schools stagger the dates, brings in a certain age group, with a somewhat predictable profile; this means they are fairly consistent in what they buy. I don’t normally sell Vermouth or Cognac at spring break, and even Cosmos and Long Islands are something students will get from their all-inclusive at the resort. That being said, I do get lots of orders for Margaritas.” “And beer!?” “Mostly beer.” The two laugh. “But you see Carter, that changes during non-spring break season, when I get the mid-thirties married crowd, who are getting away from their children.” “So, you’re not making cars where you need 500 tires and rims every day 365 days per year?” “Precisely.”
The two finish putting the way the inventory, and Carter heads for a stool to take a break. “Let me buy you a drink for helping me Carter.” “You don’t have to do that, you got me out of jail.” The two laugh, and Isaac starts to make a Piña Colada for his young friend. “Something cold with a straw will be easier on that face.” “And rum.”
“I remember working for this program in a prison, that was a sheltered workshop, they made blankets and sheets, mostly for the military. We would get orders in the final quarter of the year because this is when they knew if they had extra money; of course, they needed delivery by the last day of the year. The problem was, we couldn’t make that much stuff in that short of a period of time, and our policy was not only that we couldn’t make inventory ahead of time, but we also weren’t supposed to buy the material before we received an order.” “Wow!” “To add to that, the material typically came from over seas, as we didn’t have a great deal of sheet and blanket material being manufactured there.” “Well that’s a dumb policy!” “No, there was a reason for it Carter, even though we could recover the cost of material through sales, it was tax dollars we were laying out front, and our authorities restricted how much money could be fronted.” “Like an overdraft.” “Exactly, even a Corporation doesn’t have bottomless line of credit.” “So, what did you do?” “We looked at various alternatives such as a contract with the customers to guarantee sales, and tried to get suppliers to risk manage by keeping some material on hand on this side of the pond; but it wasn’t easy, as people were risk averse.” “Sounds a bit tricky” “And I haven’t even explained the procurement rules yet.” “Oh, I can imagine.” “People who think it’s easy working for government, should try working with the hiring, firing, and purchasing rules.” Isaac and Carter share another laugh. “But did it work out?” “For the most part, history tends to repeat itself, where everyone gets the job done, and everyone gets paid.” “Well what’s the problem then?” “Things did change over time, we ended up with a government that had a different agenda, and our risk aversity grew as our budgets decreased.” “That can happen in business as well though.” “You bet it can Carter; the business world went on a roller coaster from a politician who would say one thing in the morning, and another just before the markets closed.”
“You know Carter, I remember a story that fits perfectly into this theme, and one you would appreciate given your run in with the bee.” “Do we need another drink before we start?” “Oh I think so.” Isaac is already one step ahead, as he pours the rum into the mixer.
“A big part of our programs in jail was reintegration; in particular, providing vocational training so that inmates would be able to get a job when they get out. We had this one site that decided to teach bee keeping.” “Seriously?” “Oh yes, and this included making honey.” “Sweet!” “Funny Carter, real funny.” “Okay, I’ll just listen.” “They found a good deal on some hives, and then eventually some used equipment such as the hoods and gloves. They found the perfect area to set up, and after a long battle with groups such as Health and Safety, Environmental Protection, and the Vocational Committee, who decided what programs provided marketable skills, they were finally ready to get going.” “Perfect.” “Almost; you see they had to get training, because you don’t want to mess with bees!” “You’ve got that right Isaac.” “But it couldn’t be just any training, we insisted on third party certification, because inmates wanted a certificate from a recognized educational organization, not from a jail.” “Makes sense.”
“Well after a great deal of training, experimentation, and hard work, they finally did it, they were producing honey, and it was fantastic!” “Perfect!” “Oh yes Carter, it was the best honey I ever had, and it was blueberry flavoured. And then the word got out, and the orders were coming in by the dozens.” “That’s great.” “Well, not really, there was a problem.” “Problem?” “Yes, there was a waiting list, and it was over five years long.” “Five years! Why?” “Well you see Carter, they only had seven bees!”
The Beancounter is now available on Amazon Kindle at the enclosed link: Amazon.com: The Beancounter: The business student's guide to the real world eBook: Elliot CPA CGA, Daniel W: Kindle Store
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