GoSolar was growing fast, but buying on estimates and in small rush orders cost it margin
GoSolar is a home solar business that has grown fast. It can only start a project when the right materials are on hand. Yet its team bought on estimates from past projects rather than on what each new project needed.
GoSolar had no set way to log stock as it came in, so its counts were not always right. The team also bought the same items in small rush orders again and again. Its suppliers had offered lower prices for big orders, so each rush order cost more than it had to and left GoSolar less margin.
BizKit replaced rush buying with a "no approval, no purchase" rule, built into its ERP before go-live
BizKit was GoSolar's partner for its ERP, one system for buying, stock, sales and books. Before that system went in, we worked with GoSolar's buying, warehouse and finance teams to set clear rules for how it buys. It is the same work we do at our Fit-Gap stage, where we check what a business does against what the system does.
The main rule was "no approval, no purchase," and we built it into the ERP so that each buy and each stock release needs an approved request. We also added a check on stock before it leaves the warehouse. All three teams took on the rules before go-live, so they were in place from GoSolar's first day on the ERP. Since then, those rules have replaced rush buying with one process the team can trace.
With BizKit, GoSolar recovered PHP 175,000+ in margin by buying at bulk prices instead of rush prices
As more buys went through approved requests, GoSolar's purchase records filled in. We then went through them with its team and checked what it paid for the same item from one order to the next. Together we found that bulk orders had already recovered PHP 175,000+ in margin over small rush orders.
On select materials, buying in bulk cut the cost of each unit by 60–65%. In one case, a 3,000-unit order of a high-use item recovered PHP 19,530 in margin over small orders. Because GoSolar pays less for these materials in bulk, it keeps the difference as margin on what it sells.
With BizKit, GoSolar's leaders now see PHP 1,000,000+ more margin still available on items bought above the lowest rates it has already paid
The same records show PHP 1,000,000+ more margin still available on items GoSolar bought above the lowest rates it has already paid. Its finance and buying teams now share these numbers with its leaders. Together, the two teams use them to agree on which bulk buys to make.
The records also show a few items GoSolar needs most to keep projects on time. On those items, larger orders have cost more per unit than small ones, and GoSolar cannot run short of them. For each one, we and its team are comparing suppliers and order sizes to find the right price.
Since go-live, GoSolar has made real progress in its daily buying, but its new habits are not yet steady. We are guiding its team on them, and our Operations stage is built for this work. The system has begun to show GoSolar sooner what it will need, and we keep making that view better so it can plan buys earlier.
With more control over margins and stock, GoSolar can add crews and take on more projects
GoSolar wants every project to have what it needs on time, without paying more than it has to.
When stock arrives on time for each project, GoSolar can add crews who will not sit and wait for it. With more crews, it can also run more projects at once. Step by step, GoSolar is moving from estimates to its own data to decide how and when it buys. We are working with its team as it makes that change.