Parteisch International and Parteisch UK 135 He hoped that things would change. Apart from anything else, products from the Far East had been ordered and delivered by the container load and most of this stock remained on the shelves unsold. Some of this stock was many years old with little apparent possibility of selling the products.
Crijns van Sittard, Purchasing and Quality Manager, and Mike Wilson, UK Factory Manager, spent most of the evening reminiscing past production events that they had experienced together. They told Tom Eden that they had worked closely together when the UK factory was first built. Crijns told Tom that he had known Teresa and her brothers and sisters since childhood. He bemoaned the fact that the owner had been personally let down by David Stewart and described their relation- ship as a ‘friendship’. Crijns and Mike spent a lot of time recollecting the old days and the joys of manufacturing and machinery.
Nigel Jones was notable by his quietness although Jan Straaten tried to engage him in conversation throughout the meal. He seemed interested only in discussing football and drinking beer. His only words to Tom Eden during that evening were to assure him that he would take care of existing customers and Tom ‘could get on with the rest’!
The tension between the sales function and production function was plain. There had been a lack of communication and common direction within the UK business. This tension apparently resulted in problems for the customer. It seemed that Parteisch UK had been managed auto- cratically by one man, David Stewart, with the act of making a sale – and perhaps his own self interest – as a priority. Stock management and control had not figured as important in the managing of the business.
There was the suggestion that the Sales Manager behaved in a similar way to the former Managing Director. His disposition at dinner, as previously in the day, did not suggest a committed team player.
Crijns van Sittard plainly enjoys manufacturing and machinery. His personal and long family friendship with Christoph Posten suggests a simi- larity between the two men. The owner’s long-standing friend must have become aware of the high stock levels and the lack of sales and production harmony. What did he do about the situation? He apparently did nothing – and he does not really understand why David Stewart had to leave or what had gone wrong. We have the suggestion that the former UK Man- aging Director was a ‘friend’, and almost certainly trusted, by the owner.
a learning process. Nick Green, Brian Griffiths and Ben Whitehouse made themselves available at almost any time. Nigel Jones had appoint- ments every day of the first two weeks and finally attended a meeting with Tom Eden at the end of the third week.
The warehouse in the UK was filled with stock on pallets and racking to the roof. The aisles were increasingly blocked by yet more stock. In addition to the warehouse, a third of the factory area was filled with stacked pallets five high. There were two smaller warehouse areas at the older site nearby held on a long-term lease by the company. These were packed with stock without the benefit of racking. There was little space to reach items at the back of these areas. Random checks of stock lists against actual stock seemed to demonstrate a lack of an accurate tally of items some of which had not been held for ten or eleven years.
The factory included one automated production machine and three other semi-automated machines. The picking and sorting at the end of these machines was highly labour intensive. Packing was entirely by hand. Fifteen personnel were employed in the warehouse, and there were twenty-nine packers and five machine operators in the factory on double shift.
Meeting with Nick Green, company accountant
Tom Eden immediately changed some aspects of the management accounts and tightened the expenses procedure. Nick Green showed approval of these changes to what he described as ‘a loose and abused system’. Tom wanted to know why there was apparently still so much obsolete stock. Nick confirmed the problem as partly due to regular, unfettered and bulk Far Eastern purchasing by David Stewart that was not required and simply could not be sold in such large quantities. He did not believe that Parteisch International was aware of ‘all his excesses’ over many years. The UK company was almost his sole domain and several customers had been surprised when he left the company because they thought he was the owner. Nobody seemed to check his expenses, his widespread travelling or the stock provided that the sales turnover increased.
Tom questioned the role of the auditors and the stock valuations.
Nick believed that David Stewart had told the auditors that it was good stock and saleable at the full value and in any case he did not take them to some of the far-away external warehouses. As far as Christoph Posten was concerned, stock was always money in the bank rather than a burden to a changing market. Nick believed that the owner had become too used to the idea of selling a commodity product produced in bulk and that is
Parteisch International and Parteisch UK 137 what he preferred to make. He went on to explain that the problem of stock only arose when Christoph Posten and Crijns van Sittard arrived early and saw old and recycled materials stacked on the grass in front of the factory and all the way down to the road. Apparently Brian Griffiths had run out of space in his warehouse and simply put it outside when David Stewart was away and in the knowledge that the owner was due to make a visit shortly after Stewart’s return. The two Belgians had arrived at the airport and when the taxi drove through the gates, they saw all this material piled high in a long line outside the warehouse building.
Nick said that Christoph was furious, as though the sight of it was a personal insult. What he didn’t see, he didn’t know and it didn’t hurt him, but now he could see it and so could everyone else. David Stewart blamed Brian Griffiths and they all went straight to see him. Brian told them that he didn’t have any more room and it could never be used, so he put it outside. Christoph insisted that it could be used and told Crijns to take samples back to Belgium for testing. In the end, it was sold to Russia as spoilage material.
On the subject of debtors and creditors, Tom noted that creditor pay- ments were up-to-date but debtors were somewhat behind at 108 days.
Nick said that debtors were a big problem with a huge number of credit notes to catch up because the former Managing Director was always giving credit notes to sort out problems on price and delivery. A lot of customers then refused to pay until the promised credit notes were issued and new statements sent. The collection of money did not seem to be a priority with many invoices going back for several years and unlikely to be paid.
Nick explained that creditors tended to be paid quickly by Parteisch International and they never seemed to worry much about debtors because there was not a shortage of cash. He related to the fact that sup- pliers would sometimes call Parteisch International when a payment was only a week late because they knew that it would be paid immediately.
Christoph did not like late payment to suppliers and he did not like to demand money from customers.
Sales administration was poor. Orders were taken and then it was expected that appropriate delivery would be made without written explanation or detailed instructions. Nick pointed out that when Harry Brett took over, the company had to issue €140,000 of credit notes to sort out the immediate problems and at last salvage some payments.
David Stewart, the previous Managing Director, was portrayed as a person who enjoyed the perquisites of the job, a man who did what he wanted with minimum control from the headquarters of Parteisch International. The owner seems to have been satisfied with the combination
of high stock levels and growth in sales turnover. David Stewart met these benchmarks of success and enabled both Christoph Posten and himself to achieve their own different personal objectives. However, Christoph Posten did not like the public display of useless materials and continued to insist that they could be used.
David Stewart and Nigel Jones appear to be similar people. The method of selling, the abuse of good management practice in the areas of pro- duction, sales administration and accounting are plain. Their view of good customer practice and meeting customer needs seems to be a weak form of selling by agreeing to anything that the customer wants even at considerable cost to the company and staff. Their personal fulfilment comes from a lifestyle partly funded at the company’s expense.
Meeting with Brian Griffiths, plant manager
Brian Griffiths made it clear that he was working as part of the Parteisch UK operation rather than an extension of the factory gathering Christoph Posten and Crijns van Sittard operation. He said that he was willing to be involved in anything that would grow the UK business, even selling.
In fact he made it clear that he did not think much of the way either David Stewart or Nigel Jones had dealt with customers because, in his opinion, they sold cheaply and made unrealistic delivery promises just to make a sale. He said that he was brought into the business two years earlier because it was said that Mike Wilson was unable to cope. He understood that David Stewart had wanted to sack him but Christoph Posten and Crijns van Sittard did not want to lose a ‘friend’.
Tom asked Brian what he needed to help with production and ware- housing. His answer was quick: ‘Keep Nigel Jones out of my way!’ This seemed to be based on a perception of his past interference and attempted manipulation of production timetables and delivery schedules in order to satisfy promises made to customers without consultation with Brian.
Brian Griffiths seemed to have been impressed by Jan Straaten’s pre- sentation and ideas for the future. He believed that he was on the right track. However, he remained concerned about the huge stocks in the UK and believed that Christoph Posten did not want to get rid of any stock because of pride and a belief that they were worth keeping based on his love of all things production. He wondered if Christoph could really understand the problems and the changes in the market and he expressed further concerns about Ronald van Strek because he seemed to do just what the owner wanted. He described him as an administrator and doubted his ability as a CEO. He smiled as he recalled that some of the Belgians had taken to calling him ‘the school master’!
Parteisch International and Parteisch UK 139 Tom asked Brian for his explanation of what had happened when Christoph and Crijns had arrived at the factory to find some of the stock outside. He said that he had warned David Stewart that he did not have anywhere to put the stock and his response was to keep telling him that he was complaining too much – it would be sold before too long – but of course it never happened. So Brian had decided that the only place to put it was outside. His impression was that once the world could see the folly of all that stock, something had to be done and David Stewart seemed to become increasingly desperate, issuing instructions and wanting information, holding long meetings in his office, and visits to Belgium until he finally left the company.
Brian Griffiths wants to be part of a UK team. He appears to be proud of his factory. He has a strong sense of the need to sell products profitably and he has a poor view of the way that the marketing and sales activity has been managed – or not. He holds the current sales function in disdain. Whilst acknowledging Christoph Posten as the owner of the business, and a successful owner over many years, he believes that a production approach will not sustain the UK business.
Meeting with Ben Whitehouse, sales operations manager
Ben Whitehouse had been pleased with the message of Jan Straaten recognizing the growing multiple retail market in contrast to Parteisch’s concentration on the wholesale market and the need to change the range and the approach to the customer. He described the market perception of Parteisch in the UK as a manufacturer of cheap products to the wholesale market with David Stewart and Nigel Jones as well known as ‘street traders and barrow boys’ always willing to do a deal at any price. Ben recognized that the larger retailers did not work in the same way as wholesale and observed that some of the supermarkets and multiples would not even meet them because of wrong products and late deliveries in the past. Some would not even speak to David Stewart on the telephone because he had made agreements and promises that had not been kept. However, Ben Whitehouse believed that Christoph Posten would visit his factory, he would see the products produced, and as long as the sales turnover increased, he was happy.
Ben Whitehouse said that he had a problem with Nigel Jones because he still treated the sales office as his own, telling the staff what to do and without any consultation or courtesy towards himself as a fellow manager. He insisted on speaking to the customers himself and he would not allow anyone else to speak to them unless there was a problem at which time he would say that it was not his fault and then left everyone
else to sort the problems out. In addition, he had become close to one of the female staff and Ben felt certain that everything that he did and said went straight back to Nigel Jones. Apart from that, the member of staff was spending time with him in his office acting as personal secretary, making telephone calls, typing correspondence, filing papers and making coffee.
Ben Whitehouse confirms that the owner’s preoccupation with the factory seems to preclude any interest in, or even awareness of, the need for a well-managed and successful marketing and sales approach. This attitude might suggest that the owner’s view is that production is the source of profit as well as a personal preference.
Meeting with Nigel Jones, sales manager
This long awaited meeting was punctuated by Nigel Jones’s apparent and frequently stated belief of ‘steady as you go’. He made it clear to Tom Eden that the company simply needed to continue selling at the present rate and a profit would follow. When challenged on the high and long standing stocks, he reassured Tom that this would be mostly sold by the end of the year because it was ‘good’ stock and embarked on a rapid tour of the stock-list confidently naming customers who would want to buy the various items on the list. He told Tom that he estab- lished the price list for the last catalogue but when questioned about the habitual and inconsistent discounting of the price list, he blamed David Stewart for establishing the policy, Ben Whitehouse for being unable to cope, and then declared that he would not be able to keep the customers if the pricing approach was changed. He maintained that he told everyone about arrangements with customers but they simply forgot or ignored what had been said – and in any case, the company made money on everything that it sold!
Nigel Jones explained his thinking. The company had increased sales every year and nobody had previously said anything about a problem.
It must therefore be the factory that had caused the problems because he knew the costs of all our products and they were never sold under cost.
Deliveries were slow and deliveries were not made on time. In particular, he expressed extreme concern that he was the one who had to sit in front of the customer and deal with the problems when they arose – and he had a reputation to keep. It was his belief that Ben Whitehouse was too easy with the production department and wasted his time holding a meeting with them every morning. These sometimes lasted an hour. In addition, he had no control over sales office staff. He declared himself too busy with customers to help Ben Whitehouse resolve his alleged difficulties.
Parteisch International and Parteisch UK 141 Nigel Jones was a strong advocate of the massive number of sales lines in the catalogue declaring that they were needed because every customer needed something different. The choice and the prices amounted to an opportunity to keep the customers satisfied and if the size of range was reduced then it was unlikely that he could sustain the sales turnover and keep the customers. His view of the large multiples or supermarket chains was that custom had been lost on account of poor delivery in spite of his best efforts to develop new custom – but in any case, the present customer list was large and there were more potential customers in the wholesale markets that wanted products. He expressed concern that any move into new markets would clog up the factory and cause more problems. He questioned whether different products to new cus- tomers would be more profitable anyway. Current and existing custom- ers were a priority in order to keep sales turnover and if this meant making special orders or ordering from the Far East then this was a small price to pay.
Nigel Jones displays a consistent belief that taking orders for any products at any price is the answer to the future success of the busi- ness. He blames Brian Griffiths for production problems and he blames Ben Whitehouse for administrative and delivery problems. He is either unable or unwilling to help resolve any of the problems and he doesn’t think that discussion or negotiation will solve anything. Nigel Jones confidently sees more items in the range as leading to more sales and he shows no understanding of a stock problem. He expresses confi- dence that he will sell stock that has been in the warehouse for many years and he has no apparent understanding why the company should sell to the retail market. He does not really see the need to change.
Meeting with Harry Brett, consultant and interim managing director A meeting with Harry Brett was full of insights into previous events. The meeting was nevertheless positive and optimistic for the future. Harry was unambiguous in expressing his views about Nigel Jones and David Stewart.
Harry expressed the view that through working closely with David Stewart for many years, Nigel Jones adopted most of his management attitudes. Nigel Jones, he believed, was seen as hard working and indus- trious, but he had exacerbated problems by serious shortcomings in selling skills, sales management skills, administrative skills and poor personal organization. He also had very poor verbal and written com- munication skills. Nigel Jones was unwilling to pass things to others and this meant that most tasks were completed in a rush and were poorly performed. Harry said that Nigel had nevertheless expected to be