When Higher-Ups Make Sky-High Decisions Without Seeing The Floor

, , , , , | Working | September 29, 2019

Years ago, I worked at a company that made computerized equipment. They had a machine shop, and I got to know the machinists slightly. These guys could make anything, and did, saving the company the need and expense of dealing with outside shops for this work. The shop charged the work they did to the projects it was for. When the shop was idle, time was charged to an overhead account.  

When the bean counters got hold of the books, they decided the overhead account was wasted money and should be eliminated. So, the policy was changed: all machinist time had to be charged to project. 

Suddenly, the price of a bracket (or whatever) went from a realistic figure to something outrageous if the shop was otherwise idle that week. The project managers, who had limited budgets, went through the roof. To “save” money, they started contracting their parts outside machine shop. Now money was flowing out of the company.  

Soon the machine shop was shut down and the machines sold off. What a cost savings!

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