The Standard That Was Never Revised
Padma Garments, a Kolkata unit stitching school uniforms, set its annual standard at 1,200 pieces a day per line, with fabric wastage capped at 5% and 0.35 labour hours per piece. Six months later: output is 1,140 pieces a day, fabric wastage 9%, labour 0.42 hours per piece, and 1,900 pieces have been returned by one school chain because button stitching failed. The production manager wants the cutting-section head penalised for the wastage and has asked for weekly reports from all 14 sections, each taking a supervisor about three hours to prepare. The works manager says the fabric received since November is a cheaper blend with more shrinkage, a change approved by the purchase department to save ₹6 per metre - a saving of about ₹3.1 lakh so far, against returns and rework of about ₹4.6 lakh. No one has recalculated the wastage standard. The company still uses the same report format introduced four years ago.
1. Measure each deviation and decide, using management by exception and critical point control, which deviations deserve immediate managerial action. Justify your ranking.
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Deviations against standard:
| Item | Standard | Actual | Deviation |
|---|---|---|---|
| Fabric wastage | 5% | 9% | +4 percentage points = 80% above |
| Labour hours per piece | 0.35 | 0.42 | +0.07 = 20% above |
| Output per day per line | 1,200 | 1,140 | −60 = 5% below |
| Quality | no returns | 1,900 pieces returned | outright failure |
Ranking:
- Quality/returns first. It is a critical point: customer-facing, contractual, and irreversible once uniforms reach schools. It has already cost ₹4.6 lakh - more than the whole ₹3.1 lakh fabric 'saving' - so the cheaper fabric has been a net loss of about ₹1.5 lakh.
- Fabric wastage second. Largest percentage deviation and a direct variable cost, but it cannot be judged without the input change (next answer).
- Labour hours third. 20% is outside any reasonable tolerance band and points to rework on the stitching line.
- Output last. A 5% shortfall is largely a symptom of rework and is within a sensible tolerance; chasing it would distract supervisors.
Management by exception means exactly this: act on the few significant deviations, and leave normal fluctuations alone.
2. The production manager wants to penalise the cutting-section head. Evaluate this response and state the corrective action that is actually appropriate.
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The target is wrong. The cutting section works with the fabric it is given. Since November the purchase department has bought a cheaper, shrink-prone blend and no one revised the wastage standard, which still assumes the old fabric. The 9% figure therefore compares actual wastage on new fabric with a standard set for old fabric - a comparison that proves nothing about the cutting head's performance.
Penalising him would (i) punish a section for a decision taken in another department, violating Fayol's principle of equity, (ii) teach every supervisor that deviations are safer hidden than reported, which destroys the controlling process at its source, and (iii) leave the real cause untouched.
The correct response separates two things:
- Revising the standard - the standard itself is defective for the new blend. Set a separate, measured wastage norm for the blend over one month, retain 5% for the old fabric, and record the change and its reason.
- Corrective action - install a quality gate after button stitching and before packing; require purchase decisions above a defined value to carry a production cost-benefit sign-off; and review the ₹6-per-metre saving on a total-cost basis (₹3.1 lakh saved against ₹4.6 lakh in returns).
3. Comment on the proposed reporting system of 14 weekly reports at three supervisor-hours each, and suggest improvements.
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Cost of control: 14 reports × 3 hours = 42 supervisor-hours a week, about 2,180 hours a year. Any control system must be worth what it costs, and this one produces paper rather than decisions: most sections will be inside tolerance most weeks, so supervisors learn to fill formats and managers learn to skim them.
Improvements:
- Management by exception. One page, submitted only when a section crosses a threshold (wastage above 6% on old fabric, labour above 0.38 hours, returns above 50 pieces a day). A nil report otherwise.
- Critical point control. Concentrate on four points - fabric receipt inspection, cutting yield, button/stitch quality, final inspection - instead of treating 14 sections as equally important.
- Frequency matched to stability. Weekly only for the problem line; monthly for stable sections.
- Redesign the format. It is four years old and evidently does not capture fabric blend or return reasons, which are the two variables that matter today.
- Close the loop. Each deviation must name an owner, an action and a re-check date; without that, controlling degenerates into record-keeping.