Management Control Problems in Industrial Production

• Forename: Norbert
• Surname: Brna

Management Control Problem

Summary

This article provides an overview of management control problems in industrial production. The aim is to highlight the problem: labor productivity problems. In carrying out management functions, managers can determine useful ways, analysis, tools and methods and recommendation. By analysis (fishbone diagram) they should find reasons which affect the productivity. Managers must focus on people, methods, materials and equipment. Subsequently providing recommendations that affect the production process and make changes to solve such managerial issues.

Introduction

Organization:

The purpose of management control is to achieve a set outcome (such as improvements within the production process). To control Problems and Troubleshooting, the company had to upgrade their systems and grow. The company was founded by two brothers in 1941 and became a competitive company in the field of optical lenses soon after.

My Role:

• Supervising the day to day activities of a team of the 10 people.
• Managing team and individual performance.
• Ensuring all administrative records are completed accurately.
• Developing policies to create and maximise performance.
• Monitoring staff attendance and performance levels.
• Training of new staff & identifying training requirements of existing staff.
• Able to manage available resources to maximise productivity and efficiency.

Issue:

For Example: During a scheduled monthly meeting a productivity issue was highlighted. By monitoring the process and using a Fishbone Diagram - It was found that labour productivity directly affect these factors: motivation and training. It was therefore necessary to analyse the reasons and effectively use ‘information flow’ to pass information to stakeholders. Subsequently controlling the process in all stages and pass the feedback to those who need it and on time.

Stakeholder Diagram:

Internal

Stakeholders External Stakeholders

Internal Impact: Employees, Managers, Owners - high influence, high interest

Directly Impact: Suppliers, Customers, and Shareholders – Low influence, High interest

Indirectly Impact: Creditors, Society, Government – High influence, low interest

Assumptions:

Assumptions are those things that we believe to be true, we don’t know for sure, but we believe they there are. It's very important to documents these assumptions especially when it comes to estimates for duration, costs, weekly schedules, how to identify factors responsible for the problem. 1st. Reason - provide protection for me as a manager. The other reason is from historical record. Example: If my boss asked me, why the productivity has not been proven for week 2 against that of week 3. My assumption was that my team would be prepared for work and have good skills. In reality the team what I got didn't really have any skills. (The Facility Management Handbook p94)

Module themes:

An opportunity arose where I was directly able to effect the potential sustainability of the company I was employed by. My manager requested any suggestions I might have that could save the company money on their water bill. I suggested they insert a water tank underneath the ‘smooth and polish’ machines which would allow the machine to filter and reuse the water used within the manufacturing process.

Analysis

According to Robert N. Anthony, John Dear den Richard F. Vancill (1965) “Management control is the process by which managers assure that resources are obtained and used effectively in the accomplishment of the organizations”. For Example: a manager is responsible for leading the production and has a duty to control the phenomena and processes related to production. This is not possible without monitoring, verification and compliance checks during the process and outcome of the aims and objectives planned.

For Example: On a monthly meeting was found productivity problem.

Labor productivity is one of the main indicators of continuous performance improvement a prerequisite for successful implementation of business objectives. (Krauszová, 2007)

(Red)-Time, (yellow) - expectations productivity, (green)-influence, (blue)-actual productivity (black - breakpoint) - affected by motivation and training.

The task was to identify the problem and find solutions. Usage control a monitoring process was found, workers at the workplace underperform and declining productivity at work. The main reasons to control is timely and cost-effective detection of deviations that formed in a controlled process (Control loop). Characterize the difference between the intention (Plan) and its implementation, their analysis take the necessary measures. To be achievable it is important to use the SMART method (Specific, Measurable, Aligned, Realistic, and Timed). (Source Open University p 84). It was found that labor productivity directly affect these factors: Motivation, Training. Using the analysis (fishbone Diagram Source Open University p153) of these elements was necessary to determine the particular. Communicating with and involving others it’s important. Talking and consulting with others helping to solving management control problems. It was necessary to define group of all stakeholders. Not all stakeholders fully understand that Problem Management. Therefore, it is necessary to explain additional procedures (set objectives – plan – monitoring - act).

Reasons for low productivity:

Poor technique leading to poor productivity (increase in downtime). Using correct training methods and techniques we can eliminate such downtime. The principles of training is to learn and show the people how to use the technique and methods to be more proactive and productive. People can learn to develop their flexibility. Its source of inspiration and developing new techniques. Good training can prove excellent results. The reason why? Because people using right technique at the right time are more likely to achieve daily targets. (Source Kaye Thorne and David Mackey, 2007)

Ignoring workers arise to unanswered questions and technical problems in production. Poor knowledge of production processes of some leaders and inconsistent production management. Motivation is the heart of innovation and the key to producing products within an organisation. The managers need to be aware how they use language and how they behave. To ensure that employees were informed about the objectives, tasks, as well as problems of organization, interact with them and listen to their opinion, respecting their autonomy.

How a company will solve problems:

A problem that has been ignored because it concerned a tools (bad technical condition) with which staff work every day. Company solving the problem - stopping production although even it was not necessary. Another example: In the morning check of production equipment (CNC) the worker reports a bad technical condition of the machine. The team leader ordered him to resume control of the machine and brought the machine into operation. The reasons for this decision? Because team leader wants to finish the daily norm.

Conclusion:

Poor motivation and staff communication and control. Weak staff awareness of the importance of their performance impact on the quality of the product. Information was inefficiently shared. Weak involvement of management in searching for reasons for decline in labor productivity. Inconsistency bordered on laziness for some managers. Poor interest in solving micro problems with decreasing productivity work. The accumulation of these problems could result in loosing costumers which in the long-term can lead to employees being made redundant.

Recommendations and Implications:

Should be specific: who, what, when, and how they going to help, why Example: what were the reasons for decline in productivity within 2 weeks’ time.

The task should be keeping records by numbers: quantity, quality, and cost. Example: to introduce new standards for workers in 2 weeks’ time.

If target is achievable and how that is going to help from available sources. Example: Obtain certificate (CNC) from the workers to 1 week.

The company needs to know why these targets are important and how they are going to help to achieve this objective. Example: Training development and training will help increase productivity.

Is important to setup time and target date for objectives. Example: Checking hour norms every 12 hours in every shift.

Advantages:

1, Better control and utilization of working time and better balance production line. 2, keeping records, better using skills of workers and their implementation. 3, Improving operating machinery and executives (the right people in the right places). 4, Modernization of production (computers, utilities and tools) to accelerate the process workflows and help achieve the objectives. Reduce costs to using better technique of control between how much is being spent and how much we can spend.

Disadvantages:

1, Daily monotonous work and tough standards – Leading to reluctant workers. 2, Failure to meet the deadline for customers. 3, Quick decisions and lack of time result in more errors.

4, Bad use of labor, inability to effectively manage production.

Literature:

1; Robert N. Anthony, John Dear den Richard F. Vancill Management Control System Richard D.IrwinInc., Homewood, Illinois 1965.(Research om cases and theories;Vol 7) ISBN 3-87988-447-1

2; Krauzsova .A :( Techniques and approaches supporting productivity growth): Novus Scientia, 2007, ISBN 978-80-8073-922-5, p.285-289.

3; The Open University, Walton Hall, Milton Keynes, MK7 6AA published 2010 edition 11 ISBN 978 1 8487 3927 7 :( Source Open University p 84)

4; The Open University, Walton Hall, Milton Keynes, MK7 6AA published 2010 edition 11 ISBN 978 1 8487 3927 7 (fishbone Diagram Source Open University p153).

5; (everything you ever need to know about training) Kaye Thorne and David Mackey 2007.ISBN-10 0 7494 5008 8; ISBN-13 978 0 7494 5008 3

6 ;( Source Management and Organization behavior p193), European Edition Wendy Bloisi, Curtis W.Cook and Philip L.Hunsaker ISBN-13978-0-07-711107-6

7; (The Facility Management Handbook) AMACOM, division of American Management Association David D. Gotts, Kathy O. Roper Richard P. Payant ISBN 978-0-8144-1380-7

Statement in Practise:

In the workplace we are all, to a certain extent, responsible for managing ourselves. Not everyone can cope with this responsibility, but I embraced it. In the position of senior operator there are lots of opportunities for independent working. The most common problems arise in motivation and conflicts. A senior operator must be a person who is able to solve problems effectively and with an unbiased approach. Because he is in the middle of the whole process. He must communicate properly, observe the code of ethics and especially adapt a neutral stance.

Looking back at a previous example, I find that way how I dealt with problems and how I would deal with them now is different. At the time there were a limited amount of opportunities for myself to make a change in work processes and these included use of labor productivity and conflicts. If I were to find myself in a similar situation now, I would come to a different decision. It is important to remember how much time you have to solve these problems and to what extent affect you. I can say with certainty, the knowledge and skills that I had then were different than those that I have now. I would use the knowledge I have gained on this course. I would now transfer the knowledge gained on this course into my day-to-day working practice. My individual personality would sometimes have a positive effect on my decisions, however it also had the potential to effect negatively on my professional judgment. If I made the incorrect decision, I alone would be left to face the consequences. However, this did not necessarily mean my next decision would also be incorrect. I also was able to take the necessary steps to avoid repeating the same mistakes, thus turning the negative experience into a positive. Decisions I made under pressure focused on achieving goals and high expectations. The hard approach adopted by senior operators leads to them working effectively and results that exceed expectations. My personal methods lead to similar outcomes: Before working towards a goal, I would share this goal with my colleagues. Ensuring I would inform the largest number of colleagues possible. Thus linking theory to practical processes. Not forgetting communication and awareness of what is happening. Remembering it is important to praise throughout the working process and not criticize his character but his performance when is needed. Potential benefits include: You will become a tool to increase motivation and productivity of staff involvement in the organization. Increase in cooperation of all employees who begin to communicate more. I can say that if a senior operator should have more competencies would be much more useful. But because these competencies are restricted only I could only make decisions restricted by these boundaries. I would like to mention one more thing, and that is support. If you have someone who can support you in your work is a big plus because you're trying to do as best you can. I think contemporary companies have totally forgotten support staff. What has been forgotten is that mutual understanding, support and interplay of all interested members in the organization is a sufficient element of motivation for all and could lead them towards a common goal. I would say that the management and control problems is not science unless I know what I want to achieve and how to achieve and if I have all available recourses.

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