Three Tons of Steel Are at the Galvaniser and Nobody Knows Which Job They Own
· 7 min read · Written by Faceela Research & Editorial Team
Reviewed by Ahmed Hassan Algammal — Founder and Enterprise Systems Consultant
Walk the yard on a Tuesday and count what is not there. A rack of frames went to the galvaniser on Sunday. Two door leaves went out for duco on Monday. In somebody's third yard there is a pallet of brackets that has been coming back this week for a fortnight.
Now open the stock report. None of it is on there. None of it is missing either — because as far as every system in the building is concerned, nothing happened. The steel was received when it was bought. It will be consumed when it is welded into an assembly. Between those two events there is no room in the record for a lorry.
That is the whole of it, and it is not a discipline problem. The storeman wrote a note. The driver signed it. The note is in a clipboard in the yard office, which is exactly where it was designed to end up.
The material did not leave. Your knowledge of it did
The habit in this trade is to treat outsourced finishing as a purchase. The finisher's invoice arrives, it is coded to a subcontract account or, on a good month, to a job, and the accounts are right.
But a purchase is somebody else's goods becoming yours. This is the opposite. Your goods leave, stay yours the whole time, get worked on, and come back changed. That is an operation — a step in a route, exactly like cutting or welding, which happens to be performed in another company's yard.
The distinction sounds like bookkeeping and it is not. It decides four things: where the material is, what it is worth while it is there, which job it belongs to, and whether the factory can schedule around it. Treated as a purchase, all four answers are unavailable. Treated as an operation, all four are properties of a step that already exists in the system.
The shape of it
Four stations, three places the quantity stops being known
Where it is · Your yard, on a lorry
1. The material goes out
A rack of fabricated frames leaves on a delivery note written by the storeman who loaded it. Nothing was sold, so purchasing has no document; nothing was consumed, so production has no document either.
Where quantity and value go missing 1
It leaves without a job number and without a weight
The note says what went. It rarely says which job each piece belongs to, and it almost never says what the load weighed — which is the unit the invoice will come back in.
Where it is · The finisher's yard
2. It sits somewhere you do not control
It is still your steel. It is still your money. It is on nobody's stock report, in no warehouse, at no location, and the only person who knows how much of it is there is the man who drove it.
Where it is · Back through your gate
3. Some of it comes back
The lorry returns and the pieces are unloaded and put back into the flow. Whether the count matches what went out is a comparison that has to be made at the gate, by someone holding the outward note.
Where quantity and value go missing 2
The short return and the rejected batch
Pieces that came back thin, blistered or burnt go out again on the next load. The finish is now paid for twice, and the first send is in no record — so the second one looks like the only one.
Where it is · The finisher's invoice
4. The bill arrives in a different unit
Galvanising is per kilogram on their weighbridge. Powder coat is per square metre or per piece. The quantity on the invoice is the finisher's measurement of your material.
Where quantity and value go missing 3
Priced on a quantity nobody on your side measured
Checking the invoice means re-deriving weight or area from the drawing, after the fact, for a job that has already shipped. Mostly it is checked against the total and approved.
Then the next job's steel goes out through the same gate, on the same note, into the same four stations.
The honest test
Produce, today, the value of your own material standing in somebody else's yard, split by job. If that number cannot be produced, subcontract finishing is not being tracked — it is being remembered.
The note out and the note back
Every workshop writes a delivery note when material goes out. Almost none of them writes the second document, and the second document is the one that matters: the note the goods come back on, set against the note they went out on, by someone holding both.
Ask what happens today when forty-two pieces go and forty come back. In most yards the answer is that the forty are unloaded, put back into the flow, and used. Nobody is asked about the other two. They are not stolen and they are not lost — they are usually still on the finisher's rack, or they were rejected and set aside, or they went out on the wrong pallet with another customer's work. All three are recoverable on the day and none of them is recoverable in a month.
The reason nobody asks is not carelessness. It is that asking requires the outward note to be in the receiver's hand at the moment of unloading, and the outward note is a piece of paper in a different office. The comparison is not refused. It is merely made impossible at the only moment it is cheap.
The batch that gets paid for twice
Here is the one that costs the most and is recorded the least.
A load comes back from powder coat with an orange-peel finish, or blistered, or burnt at an edge where the oven ran hot. It is rejected. It goes out again on the next load, gets coated again, and comes back right.
The finish has now been paid for twice. On your side there is one document: the second invoice, or a single invoice covering the whole month in which both passes disappeared into one line. On the finisher's side there may or may not be a credit, depending on the relationship and on who is asked.
What is entirely absent is a record that the first pass happened. Which means nothing can be counted, nothing can be trended, and the conversation that would fix it — this is the third rejection this quarter and they are all on the same rack — cannot be had, because the evidence for it was never created. A failure with no record is not a failure anyone can act on. It is a mood.
The invoice arrives in a unit you never measured
Look at what the four common external operations are actually priced on.
| Operation | Who does it | What the invoice is priced on |
|---|---|---|
| Hot-dip galvanising | Always outside | Weight in kilograms, on their weighbridge |
| Powder coating | Usually outside | Square metres of surface, or a rate per piece |
| Duco and lacquer spray | Usually outside | Square metres of face, by number of coats |
| Glass toughening | Always outside | Square metres, with a minimum charge per pane |
Now look at the unit the material left your yard in. It left as pieces on a rack. Nobody weighed the load. Nobody computed the coated area. The information needed to check the invoice — mass, or surface area — exists only in the drawing, and re-deriving it after the fact for a job that has already shipped is work nobody has time for.
So the invoice is checked against the total, against last month, and against whether it feels about right. Which is a control, of a sort, and it is the same control a business would apply to the stationery bill.
The repair is not to argue with the finisher. It is to make the quantity a property of the material when it leaves — weight per piece from the drawing, area per piece from the drawing — so the expected figure exists before the invoice does. Most fabrication drawings already carry mass. It is one of the few places in this trade where the number you need has already been calculated by somebody else and simply never travels.
Planning around an operation you do not control
The last cost is the quietest, and it is a scheduling cost rather than a material one.
Galvanising takes as long as the galvaniser's queue takes. Powder coat is a day, or three days if their line is booked, or a week if the colour has to be ordered. None of that is under your control, and all of it sits in the middle of your route — after fabrication, before assembly, before delivery, before the installation date you gave a client who is running a fit-out programme of his own.
A factory that treats the external step as a purchase cannot see this. Purchasing has a lead time on a purchase order for goods it does not yet have; it has nothing at all for goods it already owns. So the production plan shows the job moving from welding to assembly with no gap, the gap happens anyway, and the delay is discovered by a foreman looking for a rack that is not in the yard.
Treated as a routing step with a duration, it is just another operation with a queue in front of it — the same problem as material lead times, in the same place in the plan, solvable with the same arithmetic.
What to make a vendor show you
On a live system, with real steel and a real finisher, not on slides.
- Send material out to a subcontract operation and show it leave stock without becoming a sale or a consumption.
- Show, on one screen, the value of your material currently at every external finisher, split by job.
- Receive part of a load back and show the outstanding balance at that finisher, by piece and by job.
- Reject a returned batch, send it out again, and show both passes on the record afterwards.
- Show the expected weight or coated area for a load, derived from the job, before the finisher's invoice arrives.
- Match that invoice to the operation, not to a cost account, and show the cost landing on the jobs the pieces belonged to.
- Show the external step in the production plan with a duration, and show what happens to the delivery date when the finisher takes three days longer.
Item 2 is the one that decides it. Every system on the market can post a subcontract invoice to a job, and a demonstration of that proves nothing except that the system has a general ledger. A system that can produce, today, the value of your own material standing in someone else's yard has kept custody of it — and custody is the only thing on this list that the yard, the accounts and the production plan all need at once.
Item 4 is the quiet one. Most systems will pass the first three and fail this, because a rejection is a loop and loops are the part of a route that nobody builds until a customer asks.
The short version
Outsourced finishing is not a purchase. It is your own material, at full value, leaving the building for an operation you do not control and coming back changed — and every system in a normal workshop is built to describe goods arriving or goods being consumed, with nothing in between.
So the material is invisible while it is out, the return is not reconciled against the despatch, the rejected batch is paid for twice with only the second pass on record, and the invoice arrives in a unit nobody on your side ever measured.
None of that is an argument for bringing galvanising in-house, which is not a real option. It is an argument for treating the trip as what it is — a routing step with a location, a duration, a quantity and a job — so that the loop closes at the gate instead of at the year end.
The stock half of this problem is why your stock figure is wrong, and the cost half is three costs that never reach the job. What it looks like built as one system is on the joinery, steel and fabrication page, and the system itself is Flow, which tracks a subcontract operation as your material at their premises rather than as a bill that arrived.