TheRightWaytoControlPeriodExpense期间费用本钱操纵相关外文文献文档格式.docx

TheRightWaytoControlPeriodExpense期间费用本钱操纵相关外文文献文档格式.docx

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72,3;

ABI/INFORMCompletepg.55-59

BYDONALDA.J.BYRUM

Yearinandyearout,thegreatestchallengefacingindustryiscostcontrol.Nomanagerinhisrightmindwouldtrytocontroldirectmaterialcostsbystoppingthepurchaseofdirectmaterial.Suchanactionobviouslysoonwouldbringproductiontoastop,iwhichwouldbringsalestoastop,whichwouldbringthebusinesstoanend.Managersaresmarterthanthat.Theywillhavetheirengineeringstaffdesignoutthemostcostlycomponentsandthenhavetheirpurchasingstafffindtheleastcostlysuppliersfortheremainingcomponents.

Inthesameway,nomanagerinhisrightmindwouldtrytocontroldirectlaborcostsbyfiringhisdirectworkers.Theresultwouldbeexactlythesameasnotbuyingdirectmaterial.Instead,designengineerswouldbeaskedtosimplifytheconstructionspecifications,andmanufacturingengineerswouldbeaskedtoprovidetoolsandequipmentthatwouldmaximizeworkerefficiency.

Inboththeseinstancesmanagementrecognizes,perhapsonlysubconsciously,thatthecostisasymptom,notadisease,andthatitisthediseasethatmustbeattacked.Tocontinuethemedicalmetaphor,thediseaseislikeanactivecancerthatwillgrowcontinuouslyunlessitisattackedcontinuously.

Butconsiderhowmanagementhashandledsalariedexpense,wherethe"

normal"

methodofcostcontrolisdecimation,thatis,eliminationofapercentageoftheheadcountinexpectationofaequalpercentagereductionofsalariedexpense.Itneverhappens.Infact,suchactionshavebeenknowntoresultinanincreaseintotalperiodcostexpense.

Thequestionis,"

Whatisthemosteffectivewayofcontrollingperiodcosts?

"

Theansweristhroughexactlythesametechniquesasareusedfordirectmaterialanddirectlabor,thatis,changingthedesignspecificationsofthejobdescriptiontoeliminateinefficient,redundant,andunnecessaryworkelements.Thedifferenceisthatcostanalystsandadministratorsmakethedesignchangesratherthanengineersandbuyers.

ThedesignchangesmustbecompletedandimplementedbeforeyoucanexpecttoseeacostreductionflowthroughtotheP&

L.Thedesignchangesrequireanapplicationofmanpowerresourcestocreate,soitisbesttoundertakethemwhentimesEiregoodratherthanwaituntilthingsaretough.Putsimply,ifyouwanttosaveperiodcostsnextyear,youmustdothedesignworkthisyear.

Aswithdirectcosts,thefirststepinreducingperiodcostsisidentifyingthoseconditions,practices,andproceduresthatcausethecosts（notthepeoplewhoaretheresult）.Everythingmustbeopentoquestion;

therecanbenosacredcows.Forthisreasonitisusuallybestforoutsiderssuchasadministratorsandcostanalyststodotheactualdesignchangeworkratherthanhavingfunctionalmanagersdoit.

Outsidersarefarlesslikelytohaveanyingrainedbias,anditisafactofhumannaturethatonecanseeinefficienciesinanother'

soperationmuchmoreeasilythaninone'

sown.Conversely,one'

sownemployeesaregenerallybetterthanoutsideconsultantsbecausetheyalreadyhaveaworkingknowledgeoftheexistingstateofaffairsandusuallywillstartwithaprettygoodideaofwheresome,atleast,ofthebodiesareburied.Thiscouldmeanatwo-tothree-man-monthheadstart.Inaddition,eachprojectworkedoninvariablywillexposeotherareasthatshouldbeinvestigated.Effectiveperiodcostcontrolandreductionshouldbeacontinuousprocess.

TOOMANYCOPIES

Onceuponatime,beforetheadventofmainframecomputersandofficecopiers,reportswereshort,fewinnumber,andhadlimiteddistribution.Unfortunately,thatisnolongerthecase.Forallofthebenefitsaccruingfromthem,itisneverthelesstruethatcomputersandcopiersarethegreatestwastersofmanpowerinmodernindustry.Thissituationarisesbecausemanagementalwaysispressingformore,new,ordifferentinformationandreportsbutrarely,ifever,considerspurgingoldreports.

Acaseinpointwasafair-sizedmanufacturingoperationofabout2,000people.Eachmonthdataprocessingproduced41reports—eightweeklyreportsandninemonthlysummaries.Atotalof321copieswasproduced.Thecopiescontained140,000pagesandweredistributedto63persons.Ittookabouttwoman-monthstointerviewall63personsandfindoutwhatwashappeningtothe321copies.Eventually,itwasdeterminedthattheweeklyreportsweretotallyunneeded.Itwasfurtherdecidedtoproduceonlytwocopiesofthemonthlyreports,oneofwhichwasfiledinanofficeatthenorthendofthebuildingandtheotherinanofficeatthesouthend.

Ittookseveralmonthsforalloftheresultsofthischangetoshowup,andsomecameinunexpectedplaces.Manufacturingremovedmorethan300usedfilingcabinetsfromtheshopfloorandsoldthem.Thisremovalfreedupmorethan3,000sq.ft.offloorspace,whichthenwasusedtostorematerialsthathadbeenkeptinanoutsidewarehouse（rentalcost$30,000peryear）.Givingupthewarehouse,inturn,eliminatedtheneedforadriverandtruck（operatingcostsabout$4,000peryear）usedexclusivelyformovinggoodstoandfromthewarehouse.Inaddition,twofileclerkpositionswereeliminated,andaprinteroperatorindataprocessingwaseliminated.Finally,openpurchaseordersfor42newfilecabinetswerecancelled,aswasa$20,000appropriationforanadditionalprinterandbursterandan$18,000appropriationforanadditionaltruck.Nooneeverbotheredtofigureouthowmuchwassavedincomputerpaperorreportfolders.

Finally,fromahumanstandpoint,noonegotfired.Becausethechangeswereplannedandorderlyandtookplaceoverseveralmonths,allfourpeopleineliminatedpositionswereabletomoveintoother,similarjobsthathadbecomeopenthroughnaturalattrition.Inaddition,becausethecausewasexcised,apermanentcostreductioninexcessof$100,000peryearwasrealized.Notabadpaybackforabouttwoman-monthsofeffort.

Evenlessconspicuousthancomputersareofficecopiers.Infact,thecostofindividualcopieshasbecomesolowthattheirtruecostusuallyisignored.Thetruecostisthelaborneededtocopy,distribute,glanceat（andinsomecasesread）,andfile.Itprobablytakesanaveragetimeofaboutfiveminutestoperformalloftheseoperations.Multiplyallofthecopiesproducedonallmachinesbyfiveanddivideby120,000tofindtheequivalentnumberofpeopleinvolvedwithcopies.

Onerelativelysmalloperation（300persons）wasproducing180,000copiesperyear.Thecostwasonlyslightlymorethan$2,000,sotheyweren'

tconcerned—thatis,untilitwaspointedoutthatcopiesweretheexclusivepreserveofindirectpeople（100ofthe300）andthat180,000copiesweretheequivalentofeightpersons.Therewasasubsequentclampdownoncopymaking,resultinginabouta33%reductioninthenumberofcopiesoverthefollowingmonths.Whilenojobsactuallywereeliminated,therewasasmallreductioninindirectovertime（aboutpoints）.

Withworkelementsthissmall,it'

softenimpossibletomakeadirectconnectionbetweenthecauseandeffect.Onemustworkalmostonfaithbutwiththefirmknowledgethattheretrulyisacause-and-effectrelationshipandthatitultimatelymustbereflectedintheP&

L.

TOOMANYBODIES

Agrowingprobleminmanyolderorganizationsisthenumberoflevelsoflocalmanagement.Newcompaniestendtohaveonlytwoorthreelevelsoffunctionalmanagers,plusoneadditionallevelforthecompanymanager.Olderorganizationsoftenhavefourorfivelevelsoffunctionalmanagersanduptothreemorelevelstotietheorganizationtogether.

Ifyou'

veeverplayedthepartygamewhereamessageispassedfromonepersontoanother,you'

llbeawarethatitusuallyistotallygarbledbythetimeitreachesthefourthindividual.Thisisexactlythesamethingthathappensinbusinessasinformationpassesupthemanagementpyramidanddecisionsfilterdown.Thelowestlevelofmanagementwillbefullycognizantofboththeformanddetailsofwhattheworkersactuallyaredoing.Thesecondlevelofmanagementwillhaveafirmideaofwhat'

sgoingonbutfewdetails.Thethirdlevelofmanagementwillhaveonlyageneralideaofwhat'

sgoingonandnodetails.Thefourth-levelmanagerknowsonlywhatissupposedtobegoingon.

Thesecondproblemwithtoomanylayersofmanagementisthedelaythateachlevelbuildsintothewholeprocess.Itisaxiomaticthatthegreaterthenumberoflayersofmanagers,thelongerittakesfordecisionstobemadeandimplemented.Bettermanagersareusuallyawareoftheweaknessesoftheinformationimmediatelyavailabletothem.Consequently,ineffect,theyreachdowntwoormorelevelsintheorganizationtowheretheycanfindinformationofaqualitythattheycanusecomfortablytomakeadecision.Thusthedelay.Iftheydidn'

tdoso,theprobabilityofacorrectdecisionwouldbereducedsignificantly.

Toovercomethisinertia,overlystructuredorganizationstendtodevelopan"

express"

system.Thisisanindividualorgroupwho,inordertohandleday-to-dayproblems,hasdirectaccesstothedecisionlevel,bypassingtheentirechainofcommand.Whilethisprocedurehastheshort-termeffectofkeepingthecompanygoing,italsohastheadverseeffectofputtingtheintermediatelevelsofmanagementevenmoreinthedarkaboutwhatactuallyishappeningintheworkplace.Underextremeconditionsthis"

groupevenmaydevelopautonomousdecisionmakingpower,whicheventuallycanleadtoasituationinwhichmanagersnotonlyareunawareofwhatishappeningbuthavenowayoffindingout.

Identify