Thread by @SandeepMall

Let me share an incidence when technology takes over common sense this is what happens. Tell me what precautions will you take to prevent such type of errors and losses.

So a washer was needed for an assembly.The cost of the washer is Rs.3. The buyer by error made the PO in SAP for 300 Rs which he later blames on keyboard malfunctioning. The PO goes for approval to Sr Manager and in their busy schedule they never bother to check them and approve.

The PO then automatically is mailed to vendor. Understand this assembly is worth over 20L and the washer is not even there in audit list as it’s a cheap commodity. The vendor is over smart and he starts sending his supplies at 300 Rs.

The incoming to payment is all auto approval based on PO pricing. He keeps supplying these washers for 7 years. One fine day the company makes a policy to have a second vendor for all purchases. The purchaser instead of asking for quote from second vendor informs the...

..second source procurement price of the existing vendor. Second vendor though shocked laps up the offer and also starts to supply at 300 Rs. So both of them are now minting money. Unfortunately for them one day the assembly stops because of shortage of their washers

And if u understand assembly line this is most criminal and every senior management gets involved to sort the issue out. Someone then noticed that why 300 Rs is being paid for a cheap washer. The whole picture becomes clear and they call both vendors.

The second vendor says he was offered 300 Rs and he accepted. The first had official PO and he had fulfilled all criteria’s of the agreement. The company could do nothing and lost 7 Cr in the process. What changes will u do in the system to make it full proof.