Pricing Under Pressure Case Study
hil61217_ch20_case.qxd
5/12/04
17:17
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ADDITIONAL CASES
■ CASE 20.3
PLANNING PLANERS
This was the first time that Carl Schilling had been summoned to meet with the bigwigs in the fancy executive offices upstairs. And he hopes it will be the last time. Carl doesn’t like the pressure. He has had enough pressure just dealing with all the problems he has been encountering as the foreman of the planer department on the factory floor.
What a nightmare this last month has been!
Fortunately, the meeting had gone better than Carl had feared. The bigwigs actually had been quite nice. They explained that they needed to get Carl’s advice on how to deal with a problem that was affecting the entire factory. The origin of the problem is that the planer department has had a difficult time keeping up with its workload. Frequently there are a number of workpieces waiting for a free planer. This waiting has seriously disrupted the production schedule for subsequent operations, thereby greatly increasing the cost of in-process inventory as well as the cost of idle equipment and resulting lost production. They understood that this problem was not Carl’s fault. However, they needed to get his ideas on what changes were needed in the planer department to relieve this bottleneck. Imagine that! All these bigwigs with graduate degrees from the fanciest business schools in the country asking advice from a poor working slob like him who had barely made it through high school.
He could hardly wait to tell his wife that night.
The meeting had given Carl an opportunity to get two pet peeves off his chest. One peeve is that he has been telling his boss for months that he really needs another planer, but nothing ever gets done about this. His boss just keeps telling him that the planers he already has aren’t being used 100 percent of the time, so how can adding even more capacity be justified. Doesn’t his boss understand about the big backlogs that build up during busy times?
Then
5/12/04
17:17
Page 46
ADDITIONAL CASES
■ CASE 20.3
PLANNING PLANERS
This was the first time that Carl Schilling had been summoned to meet with the bigwigs in the fancy executive offices upstairs. And he hopes it will be the last time. Carl doesn’t like the pressure. He has had enough pressure just dealing with all the problems he has been encountering as the foreman of the planer department on the factory floor.
What a nightmare this last month has been!
Fortunately, the meeting had gone better than Carl had feared. The bigwigs actually had been quite nice. They explained that they needed to get Carl’s advice on how to deal with a problem that was affecting the entire factory. The origin of the problem is that the planer department has had a difficult time keeping up with its workload. Frequently there are a number of workpieces waiting for a free planer. This waiting has seriously disrupted the production schedule for subsequent operations, thereby greatly increasing the cost of in-process inventory as well as the cost of idle equipment and resulting lost production. They understood that this problem was not Carl’s fault. However, they needed to get his ideas on what changes were needed in the planer department to relieve this bottleneck. Imagine that! All these bigwigs with graduate degrees from the fanciest business schools in the country asking advice from a poor working slob like him who had barely made it through high school.
He could hardly wait to tell his wife that night.
The meeting had given Carl an opportunity to get two pet peeves off his chest. One peeve is that he has been telling his boss for months that he really needs another planer, but nothing ever gets done about this. His boss just keeps telling him that the planers he already has aren’t being used 100 percent of the time, so how can adding even more capacity be justified. Doesn’t his boss understand about the big backlogs that build up during busy times?
Then