Reply to post: Civil service

Margin mugs: A bank paid how much for a 2m Ethernet cable? WTF!

Chairman of the Bored Silver badge

Civil service

Self inflicted wounds-

R&D lab I used to work at would have to buy electronics parts, and we got them from commercial distributors at competitive prices, and could take advantage of price splits on quantity. So far so good. A typical circuit board bill of materials would be about 150 line items at an avg cost of around $1 each.

But some genius reworked our entire organization with SAP ERP, and every single part gets individually entered into ERP, tracked independently, inventoried, and has to be issued from a warehouse - using electronic forms with multiple signatures. ERP labor per line item (or if you're really screwed, per part) is 15min. At an avg burdened rate of $100 per hour for everyone touching these, you burn $3750 just feeding the EEP database. Add in the back end warehouse ops and this doubles. And that's how your $1 part goes to $51. On a good day. For no value added.

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