Scenario 1

Do you use cutting

machines in this
division?

Yes, we've got three

of them

Situatio
n
Questio
n

Seller

Buyer

And are they

difficult for your
operators to use?

They are rather hard,

but we've learned
how to get them
working.

Problem
Questio
n

Seller

Buyer

We could solve that

operating difficulty for you
with our new Automatic
Machine.

What does your

Machine cost?

offering
a
solution

Seller

Buyer

The base model is about

Rs. 120,000 and...

Seller

Rs.120,000!!! Just to
make cutting easier
to use! You must be
kidding.

Buyer

Call me back next

week..

Continuatio
n
Seller

Buyer

Scenario 2

Do you use cutting

machines in this
division?

Yes, we've got three

of them

Situatio
n
Questio
n

Seller

Buyer

And are they

difficult for your
operators to use?

They are rather hard,

but we've learned
how to get them
working.

Problem
Questio
n

Seller

Buyer

You say they're hard

to use. What effect
does this have on
your output?

Very little, because

we've specially trained
three people who know
how to use them.

Implicati
on
Question

Seller

Buyer

If you've only got three

people who can use them,
doesn't that create work
bottlenecks?

No, it's only when a

operator leaves that we have
trouble while we're waiting
for a replacement to be
trained.

Implicati
on
Question

Seller

Buyer

It sounds like the difficulty of

using these machines may be
leading to a turnover problem
with the operators you've
trained. Is that right?

Lets sit in my cabin and

talk

Recognisi
ng a
bigger
problem

Implicati
on
Question

Seller

Buyer

Yes, people certainly don't

like using the machines, and
operators generally don't
stay with us for long.

Seller

Buyer

What does this turnover

mean in terms of training
cost?

It takes a couple of months before an operator

gets proficient, so that's maybe Rs 4000 in
wages and benefits for each operator. On top
of that we pay the company Rs 500 to put
new operators through off-site training in their
Southampton plant. So add perhaps f 1000 for
travel costs. You know, that's about Rs5000
for each operator we trainand I guess we
must have trained at least five this year
already.

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Seller

Buyer

SO that's more than Rs 25,000 in

training costs in less than 6
months. If you've trained five
people in 6 months, it sounds
like you've never had three fully
competent operators at any
time: how much production loss
has this led to?

Whenever there's been a bottleneck, we've

persuaded the other operators to work
overtime, or we've sent work outside.

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Seller

Buyer

Doesn't the overtime add

even more to your costs?

Yes, we've been paying overtime at two and a

half times the normal job rate. Even with the
additional pay, the operators aren't very
willing to work the extra hours which I'm
sure is one of the reasons we're getting such
high turnover.

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Seller

Buyer

I can see how sending the work

outside must also increase your
costs, but is that the only
implication of sending work out?
Is the quality of work affected,
for example?

That's what I'm most unhappy about. I can

control the quality of everything we produce
internally, but when anything goes outside I'm
at the mercy of other people.

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Seller

Buyer

And presumably, being

forced to send work outside
also puts you at the mercy of
other people's delivery
schedules?

Don't talk about it! I've just spent 3 hours

on the phone chasing a late delivery.

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Seller

Buyer

So from what you've said, because your

machines are so difficult to use, you've spent
25,000 in training costs this year and you're
getting expensive operator turnover. You've
bottlenecks in production, and these result in
expensive overtime and force you to send
jobs outside. But sending jobs outside isn't
satisfactory, because you're losing quality
and getting late deliveries.

Seller

When you put it that way, those machines

are creating a very serious problem
indeed.

Buyer