‘Wherever you are, Wanda, thank you’: Coworker Orders $55M in Unneeded Inventory During a Corporate Merger, Faces Zero Consequences, and Accidentally Maxes Out Bonuses for 1,500 Employees for Years

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  • Smiling man in glasses sitting at an office desk with a laptop nearby.
  • Coworker ordered $55M in unneeded inventory

    Some years back, the company I was working for was acquired. My company had a process where we put forecasted orders into our ordering system, and as real orders arrived, we would replace the forecast orders with real ones.
  • (We did this because our lead time for manufacturing was significantly longer than what we were imposing on customer orders.)
  • The acquiring company had a different process, and basically put a bunch of departments on a 1-year transition plan, including the forecast order people..
  • Turned out there the person entering the forecast orders and the person replacing them...were not the same person. The
  • replacing person no longer worked there. So the forecast orders and real orders just kept piling up.
  • There is another department whose responsibility it is to order material based on orders in the system. They also know the forecast, and should never be ordering in excess of the forecast.
  • Smiling man working on a laptop at an office desk with another coworker in the background.
  • But the person who was doing this had been given her 1-year transition and dgaf about her job.
  • Well, she ordered double the forecast.
  • I don't see how much inventory we have until it arrives. So 12 weeks later, there was this insane amount of inventory with no customer for it. It totalled to $55M. This was a big company, but that was still a lot of money.
  • So we took a reserve on it. ie normally you don't pay for inventory that is going back out the door to a customer; in this
  • case, we paid for the material, and we would get paid back as we sold it, which we didn't expect to do.
  • Nothing happened to the person who over-ordered. It seems strange that a lovely employee was somehow able to spend $55M at a vendor, but that's how the system worked.
  • In the end, we had a massive stroke of good luck, and sold off all $55M in 3 years. And it turned out our business targets didn't
  • account for "non-standard costs", so we were essentially getting unprojected revenue at 100% margin. This maxed out the
  • bonuses of 1500 people every year, which probably ended up being a $100M payout.
  • Wherever you are, Wanda, thank you. You got everyone paid a lot of money. I don't think there are more than a handful of us who know this story.

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