Stock out

Retailers understand the cost of stock outs, well, the successful ones do. Customer comes in to buy something, you don’t have it in stock, they leave the rest of their basket in the aisle and go to a competitor.  Then they shop there for the rest of their life, or until they have a stock out. In principle the cost of not having something in stock can be way more than the missed margin on that single item. Its easy to think of this as being relevant to just physical goods.

However a similar thing happened at work recently.

One of the projects needed a dll writing to sit in front of a vendor component. Only trouble being there were no licencses left for the vendors tool.

Sys admin to dev team and project manager ‘If I had known you were going to need additional licenses I could have ordered them last week and they would be here now’

Dev team to sys admin ‘we only decided this was the only solution today’

Sys admin ‘I’ll order the license now, it should be here in a couple of days.’

Leaving aside for a minute the nonsense of a purely electronic item taking more than nano seconds to arrive…

The cost to the project is several day of no progress, so lets say it is 3 days late because of this and is delivering business benefits of 200 k per year, then thats 3 grand just lost. Against a license of a few hundred quid.

To me it seems that keeping a couple of spare license for core enterprise systems in the top drawer could be a good investment. The alternative would be to work with suppliers who can get you moving within minutes not weeks I guess.

I suppose some less scrupulous admins might propose to ‘borrow’ a license for a few days, and I suspect many vendors would live with that too.

Anyone else seen this license delay problem?

I can see it as an issue if you have hundreds of disparate tools to cover. I don’t know, for example if you had a policy of using the best tool for the job. But as most places obsess about minimising the number of tools no matter how inappropriate, I think a bit of slack in the license stock would actually be cashflow positive.

I have seen similar at places with concurrent database user limits, come the period end everyone starts fighting to get on the system because there are 100 busy users sharing 10 licences.

Have you seen this sort of thing?

cheers

Simon

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One Response to “Stock out”

  1. Marcus from London Says:

    “The alternative would be to work with suppliers who can get you moving within minutes not weeks I guess.”

    It’s not always the vendor. I just ordered an add-in dev tool which took well over a week to process as 3 separate people had to approve it – in hierarchical (escalated) sequence.

    Even better, about 10 years ago I worked alongside another VBA Access developer who spent 3 weeks writing a utility to compact/repair and archive their suit of Access databases as the business had already spent the year’s software budget and couldn’t afford to buy a $100 AUD 3rd party tool.

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