Sunday, September 25, 2022

Pilferage

 'Small waters make mighty oceans' is a very famous proverb and am going to illustrate how 'Pilferage' is carried out in today's world in various Businesses. I have picked handful of Business typically my community chooses and highlight the challenges faced in today's world. My community is a very conservative one and are good traders but off late since second generation is not coming into the family run Business it is all advantage for other groups and especially for the employees in the respective firms. I truly believe challenges are more of internal in nature (mainly due to employees) and not because of Modi ji, GST or economic climate. Our community chooses Businesses very wisely and below list are five common fields we are currently associated with: 

Example 1 - Medical wholesale Business: Medical field is one of the fantastic field to be associated with and Corona has just explicitly highlighted the same to the whole world. Whether you are into Medical practice, own a wholesale/retail, run a hospital/pharmacy, own a Lab (scanning services) or into Surgical trading or run a C&F everyone in the supply chain is a beneficiary of the prevailing life style and food habits of fellow citizens. Since we are into medical wholesale business below are some of the ways pilferage happens:

(a) If a Customer is known for his poor finances then best thing to do is to stop business with him. But people voluntarily places orders to this customer. Let us assume this bad customer has this habit of paying back only after 90 days (90 days credit is slowly becoming common) then our staff hands over the money only after 120 days. So thirty days staff uses money for his own personal expenses and returns 30 days late ...Imagine number of customers our staff deals ?? 

(b) If company requests stockists to provide offer then we are obliged to do; Imagine company XYZ asks us to provide '10+2' offer for a new product launched meaning for every 10 numbers we sell then we are requested to provide 2 numbers free of cost; Our staff uses this formula and rather than providing two strips free of cost to customer they sell two strips to the shops they know and collect cash. Many retail pharmacies will know the formula but some shops due to poor manpower they don't know current offers, and these are the shops people take advantage. 

Example 2 - Paper Industry: Just like how medicines get consumed paper is one commodity which we keep using every single day. Paper manufacturers are facing slew of challenges like raw materials shortage, costly coal and Russia-Ukraine standoff. Wastepaper is one of the raw materials for paper mills and since wastepaper is of much demand staffs inside the mill trade wastepaper with other mills in order to fetch money. Also, rough formula is one ton of coal is required to produce one ton of paper. Since coal is most sought after for electricity needs, coal is again being traded to thermal plants for higher costs by the very own employees. 

Example 3 - Transport Business: Just like how medicine and paper are consumer products transport is one industry which public uses every day since common public with 8000 rupees salary package cannot own a Bike/car especially with the sort of petrol price in the market. Private Bus owners give incentive to bus operators based on the 'collection' and this is primarily done to increase footage on a particular route. So rather than carrying 55 guests if bus carries 70 passengers, then bus operator gets incentive for the extra 15 passengers, so he is encouraged to accommodate more and more people (now you know why private buses are crowded). Now let us assume one passenger regularly takes one route daily and becomes close buddy of the bus operator then bus operator rather than giving ticket to him gets cash. Ticket price may be 20 rupees but passenger offers 10 rupees and both bus operator as well as passengers gets mutually benefitted through this deal at the cost of the owner who looks into the bigger picture of 'collection' in a day and not collection for a single trip. 

Example 4 - Estate Business: Estates and nagarathars go a long way since cultivation of crops and being in harmony with nature always suits well with my community. With 100 or 200 acres in their kitty it is not an easy job to be on top of things. Most of the people appoint managers and handle the overall operations of the business but may not be hands on with day to day operations. 'Yield' is a very important term in Estate business and in order to fetch weight tamarind seeds are added as part of coffee seeds and papaya seeds are added as part of black pepper. If you are handling 100 tons of merchandise how in the world will you find out these ? These are planned at the field level and either adulteration is done at the estate or during transportation. But end of the day in the name of food adulteration people make money and its a network of people who gets associated. 

These are just some of the examples of how pilferage happens in some common businesses. Older generation since they have gone past years of hard work they overlook these just to keep them going. With proper technology in place and suitable business process at every step and more importantly second generation getting into the groove can only curb these and put an end to the pilferage activities carried out by the own staff. 

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