I used to work in a very large manufacturing environment. We made these:
We sometimes made as many as 5,000 in a day. I was in charge of the departments that made all of the orange parts that you see and a lot of the parts that you don't see. Like lawnmower blades. From memory, we made about 7 million blades a year. About half of those went on lawn mowers and the other half went to Sears stores to be sold as replacement parts. I tried to keep our blades under $1.50 and we did that by constantly haggling with our steel suppliers for better pricing, trying to keep the number of employees in the department to a minimum and trying to constantly improve the process for making blades. We actually sold more blades than we were able to make so I had to buy as many as 2 million blades a year from a company called Fisher Barton to help us meet our demands. These would often sit around our plant as inventory until we needed them.
The blade department was very important for obvious reasons. The entire mower is built around the work that the actual blade does, cutting grass. But, as I mentioned, only half of the blades ended up on a lawn mower. The others were sold as replacement parts. I made the blades at a cost of $1.50 to our plant but we then sold them to Sears at a cost of around $5.00 each. That is 3.5 million blades per year at a profit of $3.50 per blade. That comes to over 12 million dollars in profit for our company from this one little department of about 80 people. Don't feel too sorry for Sears. They sell each blade for around $16.00 each. Welcome to the Free Market!
Inventory is a very big deal in large manufacturing plants. Often, sales are greater than the manufacturers ability to make product. For example, if Sears sells 8,000 tractors a day, and we can only make 5,000 tractors a day, that's a problem. If we make a tractor for a total cost to our company of $1,200.00 dollars and Sears sells that mower for $3,000.00 dollars, we and they are losing a lot of potential money. Luckily, Sears has a "selling season" for Outdoor Products and that season for Lawn Mowers is, strangely enough, the same season that grass grows. Doh? The rest of the year, they don't purchase anywhere near as many mowers.
So Sears doesn't sell 8,000 tractors every day of the year but every day of the "grass growing" season. The goal of every manufacturer is to "make to order". In other words, if Sears orders 8,000 tractors on a Tuesday, we would like to make and deliver 8,000 tractors on Wednesday but we can't, as I stated. That's over simplified but will do for whatever the heck I am trying to explain and what I am trying to explain is the roll of inventory.
In our situation, we also had days(many days) when Sears might only order 120 lawn mowers. On those days, we might make 2,000 lawn mowers but ship only the 120. The rest we would put in inventory and there they would sit until Sears began ordering more tractors than we could produce in a single day. When orders surpassed our ability to "make to order", we would begin to pull tractors that we made 6 months earlier out of inventory to be shipped with whatever we had actually made that day. So if Sears ordered 6,500 tractors that day, we would make 5,000 and pull the remaining 1,500 from inventory to complete the order.
Voice in my head: UUUhhhh, Joe?
Me: Uuhh, yeah?
Voice: This is all very interesting, sorta, but where's Jesus?
Me: He's in our hearts, silly.
So to mask our inefficiencies, we filled warehouses all over the Southeast, with extra lawnmowers (inventory). One year, we had over 140,000 lawnmowers stashed in warehouses, awaiting the springtime and the frenzied buying of lawnmowers. So inventory is good, if you can afford it and if it is the only way to meet orders but it is very bad for other reasons. It costs a lot of money to lease those warehouses and to hire a crew to run them. And it cost us, let's just say, $1,200.00 dollars to make each mower. That's fine, if you are going to be paid for them that month but for these mowers, that wasn't the case. And so for these 140,000 in the warehouse, that represents $168,000,000 dollars that our company has paid out for materials to make the lawn mowers, employee salaries, etc. without a single cent coming in. That is 168 million dollars folks. And that is zero of what they call "cash flow". Cash was flowing out but not flowing in. That's scary for the rich guys up front also because the tax man charges you for potential income represented by "finished goods" in inventory as well as actual income from actual sales. Got all that? GOOD!
Now the inefficiencies that prevented us from being able to keep up with sales were not honest inefficiencies. By that I mean that all the machines and all the employees and all the suppliers and all of management didn't perform the way they were supposed to. If they had, all the time, we would have always been able to meet our daily customer demands and would never have had any need for inventory. So what inventory really did was hide our faults or at least protect us from the consequences of our faults. But at an incredible cost. And what was worse, in the long run, because sales were usually so good, we didn't really ever pay attention to the faults. Eventually, as a company, we didn't even realize they were there. We always got away with it because the money would finally roll in and our faults were forgotten, even though it costs us millions of dollars in potential profits. It sorta looked like this:
Inventory raised our company above all of our problems. They were still there, though, just waiting for a drought in the Southeast or a recession to have a drastic effect on our sales and guess what? That is just what happened. As a result of us not taking care of our problems, when the crash came, thousands of people lost their jobs. Not just at our plant but at the plants of our hundreds of suppliers. If we had been better stewards with our riches, in this case holding less inventory, we would have exposed our problems and fixed them. It may have been a painful lesson in the short run but would have paid major dividends in the long run.
And personal riches are like this also:
Ist Timothy 6:9-11- People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. 10 For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.
Now it doesn't say money is the root but that the LOVE of money is the root. That means that anyone from beggars to billionaires can be guilty. I am somewhere in there and I have been hugely guilty here. And our country is hugely guilty here. But what I am talking about here is the effect personal riches has on hiding our sins; our ongoing, life dominating sins. Riches make us feel secure and feeling secure is not the best place to be if we are going to feel a need for Jesus, who is the one who corrects our sinful behaviors.
Jed's marriage is in trouble because he is having an affair. His self esteem needs a shot of confidence because he is not able, in his mind, to provide the way he wants to for his family. And his wife knows but almost doesn't care because life is so boring with this man. And together, they use credit cards to try to make life cozy and keep up with the Jones but the credit debt soars to tens of thousands of dollars. So there are sins of lust, adultery, envy, etc. destroying this family but at least these sins can be seen.
But then one evening, he's out hunting for wabbits in his back yard. He shoots at one and suddenly he sees oil bubbling out of the ground. Black Gold. Texas Tea. Next thing you know, Jed's a millionaire. Suddenly life is grand. Suddenly Jed feels more manly and doesn't need another woman to prove it. He never admits his sin but the wife doesn't care. This man is suddenly very interesting what with eating and shopping here and traveling and vacationing there. And that awful debt that was weighing them down? Well, Jed could pay most of it back this year but he'll get to that later. What a wonderful life!!
But who is Jed? Is he the man he was when he was poor? Or the man he is now, when he is rich? Well, he is both. He is a rich man who is very poor. He could have been a poor man who was very rich. And then when earthly riches came, who knows what kind of things could have happened.
Revelation 3:15-18- I know your deeds, that you are neither cold nor hot. I wish you were either one or the other! 16 So, because you are lukewarm—neither hot nor cold—I am about to spit you out of my mouth. 17 You say, ‘I am rich; I have acquired wealth and do not need a thing.’ But you do not realize that you are wretched, pitiful, poor, blind and naked. 18 I counsel you to buy from me gold refined in the fire, so you can become rich; and white clothes to wear, so you can cover your shameful nakedness; and salve to put on your eyes, so you can see.
It isn't a coincidence that this church is earthly rich and is described by Jesus as lukewarm. Many very respected Biblical scholars believe that the 7 letters to the 7 churches found in chapters 2 and 3 of the Book of Revelation are not only actual letters to actual churches of that day but they also are meant(by the writer and Jesus) to describe the positives and negatives of the seven church ages that began after the Cross. And you guessed it, this "Lukewarm" letter is from the seventh letter that would represent the last church age which these same scholars believe we are currently living in. Now whether you believe this 7 church ages theology is true or not really doesn't matter. I don't even know if I do or not. But I think that it is imperative that we understand the churches today(the people in it) are very rich for the most part but it is also very lukewarm, for the most part. And it has blinded us to the actual fact that we are wretched, pitiful, poor, blind and naked or so says Jesus in Revelation. Exhibit A:
The Chrystal Cathedral is the church started by the Godfather of the Self Esteem Gospel, Robert Schuller. They are currently in default on 55 million dollars worth of loans, they've laid off over 50 employees and the family has split over disagreements concerning church governance. In retrospect, maybe a big ole tent would have been the way to go. There I go, being judgmental again. All I am trying to do, with the whole money thing, is ask you to be careful. Spiritually, wealth does nothing for you and it may actually hide our sins and our character flaws that are more exposed when money is not lifting us "above it all". It can be just a part of this overall darkness that Jesus is constantly warning us about and telling us that we don't comprehend.
Would just like to add two things before I go. First, Jed isn't me but a conglomeration (a WHAT!?) of things I've heard over many years. And second, no wabbits were harmed during the writing of this blog post.