Case Study: The Lack of Alignment in the Company ALPHA TRADE LTD
ALPHA TRADE LTD is a trading company that distributes industrial consumables and spare parts to customers throughout Greece and Cyprus. It employs 45 people and has sales, purchasing, warehouse, distribution and finance departments. Even though it has a computerized ERP system, management notices frequent delays in deliveries, low customer satisfaction, and loss of sales.
The Problem
One morning, the Sales Manager receives a phone call from a large customer requesting immediate delivery of specific products. The salesperson confirms the order, based on the free/busy data displayed by the ERP. But, the next day, the warehouse informs that the stock does not exist.
After investigation, the following are revealed:
- The ERP was not informed about the receipt of 3 loads from suppliers because the purchasing manager did not register the quantities in time. Also, due to non-physical stock control, stocks per code are not properly systemic.
- The warehouse continued to sell products based on handwritten slips, as a result of which physical inventory differed from accounting.
- The delivery delayed the delivery of other customers, as the route schedule was not coordinated with the new operating hours of the warehouse.
- Salesmen continued to reserve products in the system without physical inventory.
- Το λογιστήριο εξέδωσε τιμολόγια για παραδόσεις που τελικά δεν πραγματοποιήθηκαν.
Causes of Misalignment
- Absence of shared information and data updates.
- Lack of common goals between departments.
- Inadequate communication between departments.
- Lack of cross-checking and control procedures.
Business Impact
- Delays and cancellations of orders.
- Loss of customer trust and deterioration of the company’s reputation.
- Lower revenue and reduced profit margin.
- Conflict and accusations between departments.
- Increase in operating costs due to double work and errors.
The Intervention
- Align strategic goals of all departments based on the Balanced Scorecard.
- Establishment of weekly cross-functional meetings of Sales – Warehouse – Purchasing – Distribution.
- Redesign of the Order-to-Delivery process with a clear flow of actions and responsibilities (RACImodel).
- ERP data integration and staff training for immediate inventory updates.
- Introduction of common KPI: Accuracy of stock, On-time delivery, Order fulfillment rate, Customer satisfaction.
- Implement inventory control process for accuracy of physical with systemic inventory.
Results
Within 3 months, errors in deliveries decreased by 60%, customer satisfaction increased by 25%, and sales went up by 12%. The groups began to work in a coordinated manner and not as separate departments.
Conclusion
This case shows that alignment isn’t just communication – it’s the connection of all operations, processes, and goals around a common purpose and a shared data reality.
Yiannakis Mouzouris
Strategy and Performance Management
Expert / Business Consultant / Trainer
B.Sc. Mechanical Engineering
M.Sc.Engineering Management, US