The Case Method at the Harvard Business School: Papers by Present and Past Members of the Faculty and Staff

By Malcolm P. McNair | Go to book overview

ings in Department A had made heavy withdrawals of shafting stock from the general stores building and had machined a large quantity of small shaftings. These were on hand in Department A, but there were no large shaftings available for forwarding to Department B. This condition had come about because the foreman of Department A had totaled the shafting requirements for several weeks ahead in order to keep his costs as low as possible and at the same time permit his men to make their normal earnings on piece rates which had been set on larger lots than were then coming through the factory. On his own initiative he had withdrawn the necessary stock and ordered the machining through in these large lots. Hence the machined shaftings available were shorter than those currently needed in Department B, and since the stock had been cut up it could not be used for the larger apparatus.

The foreman in Department B had been given a copy of the schedule and orders for the shaftings to be machined in Department A. The foreman of Department A, on the other hand, had not received copies of the schedule for Department B and had therefore assumed that Department B was following the work. Since the two departments were located at some distance from each other, in different buildings, the production chasers of Department B had not followed successfully the machining of shaftings which was being done in Department A. The production chasers were further hampered because they were not well acquainted with the personnel in Department A.

To prevent a recurrence of this situation, the assistant to the production manager who had made the investigation conferred with the foremen of the two departments concerned. Three remedial proposals were discussed at this meeting. The first was to issue orders to the foremen to manufacture strictly according to schedule so that a shortage of material would be prevented. Merely to issue these orders, however, seemed insufficient, since no check would be made on whether they were being carried out.

The second proposal was to revise piece rates and base them on smaller lots, thus removing the temptation from the foreman to maintain the normal earnings of the workers by long runs and large lots. This plan seemed inadvisable, however, both because the decline in orders for stock machines was believed to be temporary and also because considerable expense would be incurred in revising the rates.

The third proposal was to change the paper work routine so that Department A would receive copies of Department B's schedules and would assume responsibility for machining Department B's shaftings. Under this system there would be less lag in production, and the production chasers in Department A would take over the work which the Department B chasers had failed to do successfully. If the piecework earnings for the shorter runs did not meet the guaranteed day rate, Department B could be charged with the difference.

A first reading of the Hampton Manufacturing Company case reveals the initial source of difficulty. Smaller lots were coming through

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