Onions Have Layers
Who has seen the movie, Shrek? The original Shrek movie, not 2, 3, or 4 – those weren’t nearly as funny as the original. For that matter, the original of just about anything is better than a sequel. Anyway, in the original Shrek movie, Donkey is having a conversation with the loveable ogre on their way to rescue Princess Fiona and Shrek says, “Onions have layers. Ogres have layers. Onions have layers. You get it? We both have layers.”
What he was trying to tell donkey was that there was more to Shrek than what was on the surface. You needed to peel back the many layers to truly understand the many facets of the ugly green ogre that stood before you. A touching exchange between the two friends and teachable moment for all the adults sitting in the theater with their kids. I always like those kid flicks where the kiddies laugh at the belch and fart jokes and life lesson items are woven into the story for mom and dad to ponder. It should be noted that all the Dad’s in the theater still laugh at the fart gags.
So, back to the whole layer thing… it seems that the business world has caught on to layers and likes to incorporate them into service quotes. It used to be when a request for proposal (RFP) was completed by a service company they submitted their rate to complete the requested services. Now, layers are being introduced into quotes that make it more difficult for organizations to decipher what really is the actual quoted rate for their services. It’s an algebra equation where you need to solve for X. C’mon people, can’t we just keep it simple and get rid of the stinkin’ layers.
Inventory service companies have become enamoured with the layer methodology when quoting rates. They call their layers “travel increments”. Talk about deceiving – these benign-looking little layers can end up costing a company more than a stinky, rotting onion. There’s real money to be lost in those layers. The trick here is for the inventory service to offer up, what appears to be, a very attractive rate to audit your inventory, with a mention of “travel increment” charges at the bottom of the page. The service will charge an incremental amount to be added to the quoted rate for each increment of miles their team has to travel from the primary office. As an example:
|Quoted rate||$2.50 / $1000 counted|
|Travel increment||$0.30 / every 30 miles beyond initial 30 mile radius|
|Layered Rate||$2.80 / $1000 counted|
That little layer is a 12% rate bump. Let’s say you have a store that is 60 miles beyond the 30 mile radius – that gets you an increment of $0.60 added to the quoted rate and that layer is a 24% rate increase! Multiply that rate by the number of stores that require a layered rate and your organization is paying more than you thought you would. I mean, really, do you get a rate decrease if your location is less than 30 miles from their office? Where’s the travel decrement? If you can’t service the locations for the quoted rate, then quote a rate that is inclusive of all the locations, not just the ones within 30 miles of your office! Who’s the donkey now?!
The next time you put out an RFP for inventory services, make sure you peel back all the layers of the quotes you receive and understand the real cost to your organization. Better yet, find a service who is willing to submit a quote that doesn’t have all the layers of an onion and doesn’t require an algebra equation to calculate the “real” rate you will be paying. They do exist and it is possible to avoid the nasty layers. It’s like Donkey said, “And then one time I ate some rotten berries. Man, there were some strong gases seepin’ outta my butt that day!“ Onions, layers, and rotten berries are all pretty funny to the kids, but can be a real life lesson for the adults, but they’re probably better to avoid when selecting an inventory service.