what is the problem,

the aspect and cost management

soluation

key playerd and roles

kim is the supervisor of the machine shop at the AAD factory and kiarg, is the supervisor of the equipment maintenance department. They are return to the factory after attending the monthly performance meeting for the planet department heads. These meetings were started 1 year ago by thomas, the factory manager and the founder's 50 . The meetings are held on the last Sunday of every month. kim has received the worst evaluation he had ever received in his long career with the company. He was a respected and experienced machinist with the company before being promoted to supervisor of the machine shop when the company expanded. kim said the company's success was due to the high quality of work of the machinists like kig- As a supervisor, kip stressed the importance of the quality of the work to his workers and told them that no poor-quality work will be accepted. When Thomas, become the factory manager, he directed that the monthly performance comparisons be made between actual and budget costs for each department. The departmental budgets were intended to encourage the supervisors to reduce the inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff reduce the budget slightly; whenever a department attained its budget in a month. This was done to reinforce the plant manager's desire to reduce costs. The plant manager often stressed the importance of continued progress toward attaining the budget. He also made it known that he kept a file of these performance reports for future references when he succeeded his father. Kim and klacg, had the following conversation: kigi I I don't understand. We've worked so hard to meet the budget and the minute we do they reduce it on us. We can't work any faster and still maintain quality.I think my team are ready to quit trying. Those performance reports don't tell the complete story of what is happening in the machine shop. We seern to be interrupting the big jobs for small rush special orders. Ali the set-up and machine adjustment time are lalling us. Hamad your department is no help. When the hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all that idle time. kiara: I apology about that, but you know my department has had trouble meeting our budget targets too. We were running behind at the time of that problem. If we had spent a day on that old machine, we would have had up the time. Instead we made the scheduled inspections of the forklift trucks because we knew we could do those in less than the budgeted time. kipi At least you have some options. I'm stuck to what the scheduling department assigns me to do and you know they're being harassed by the sales team for those special orders. On another topic, why didn't your report show all the supplies you guys wasted last month when you were working in Omar's department? kiara: We charged the maximum we could to other work and have not even reported some of those costs. kip: I I am happy, you have a way of getting out of the pressure. The accountants seem to know everything that is happening in my department before I do. I thought all that budget and accounting stuff was supposed to help, but it just gets me into trouble. It's all frustrating. I am trying to put out quality work and at the same time trying to save money