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27 Mar 2013, 23:59
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'The falling revenues that the company is experiencing coincide with delays in manufacturing. These delays, in turn,
are due in large part to poor planning in purchasing metals. Consider further that the manager of the department that
handles purchasing of raw materials has an excellent background in general business, psychology, and sociology,
but knows little about the properties of metals. The company should, therefore, move the purchasing manager to the
sales department and bring in a scientist from the research division to be manager of the purchasing department'
According to the author, the company's revenues are falling due to delay in manufacturing, which in turn depends on the purchasing of raw materials, that is being handled by a less technical person, and hence must be replaced by a scientist from the research division. This conclusion, however has overlooked many assumptions that are acting as loopholes in this conclusion.
Firstly, the revenues of the company may be falling due to other factors such as recession in the economy, or other competitors in the market, or a replacement of the present product by an advanced technology. The fact that both situations of falling revenues and delay of manufacturing are coinciding doesn't necessarily mean they are interrelated.
Secondly, the delays in manufacturing could be a result of many factors other than just purchasing of metals. It could be possible that the labour is not available, or a particular machinery is not in working conditions, or the power supply to the factory is erratic. Hence, to conclude that just one factor i.e. raw material is responsible for delay is incorrect, as companies often have a huge stock of raw materials for their manufacturing.
Thirdly, since the manager has an extensive knowledge about general management, giving him training about the properties of concerned materials or having a technical assistant by his side could be a better solution than by replacing him by a scientist from the research division. This is because the scientist does not have prior experience about trade, handling with suppliers and the financial aspect of purchasing, which is one of the most important factors of business.
In sum, the conclusion is unconvincing and must look into other important factors mentioned above. The step of replacing the manager might prove to be an unsuccessful strategy for the company.