ENGINEERING MANAGEMENT 2020

CASE STUDY NO. 03

Tim Malaw, Vice President of the COE Company, called Dick Ammou
, Chief Engineer, to his office. "Dick," he said, "this excessive overtime has got to stop.
You have already used all your budgeted overtime and the month is not even half
over. What is the trouble in your department?"

"Tim, you will recall when pressure was on to reduce costs, I transferred two
engineers over to the Bacucang plant. According to the sales forecast, we would
have been able to handle all project designs, specifications, and bids required
without working overtime. Now the sales department is moving the delivery date on
orders and increasing the number. Right now, I don't have as much help as we need
to prepare the work for manufacturing as fast as sales is calling for it." Also, two of our
best engineers have been sick and another one has been on vacation.

"Dick, I've told you time and again not to accept schedule changes from
sales without first making sure you can handle them. It is easy for sales to make
promises, but the way you're running up overtime, we are the ones who will pay for
those promises."

"Yes, Tim, I understand, but I really believe we will be able to handle these
changed schedules with very little more overtime and be in good shape by the end
of the month. Besides, one of the major goals of the company is to make deliveries
on time and serve the customer."

"Dick, I still don't think you are handling this problem very well. When costs
go up and profits go down, sales will blame us!"

A week later Dick's department is still behind and the sales manager calls.
Dick, my key salesman tells me you are holding up the CHS order. They need the
drawings and bids by tomorrow. Can I tell my people you will have them ready by
noon tomorrow?"

1. What should Dick tell the sales manager?

2. What do you think of Dick's instructions from his boss?
3. If you were Dick, how would you handle the problem?
4. How can Dick avoid future problems of this type?

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ENGINEERING MANAGEMENT 2020

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ENGINEERING MANAGEMENT 2020

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