Fundamentals of Management, 8th ed



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Part 5: Controlling

Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).

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Within operations, managerial control ensures that resources and activities achieve

primary goals such as a high percentage of on-time deliveries, low unit production cost,

or high product reliability. Any control system should focus on the elements that are

most crucial to goal attainment. For example, firms in which product quality is a major

concern (as it is at Rolex) might adopt a screening control system to monitor the prod-

uct as it is being created. If low-cost, large quantities are a higher priority (as is the case

at Timex), a postaction system might be used to identify defects at the end of the system

without disrupting the manufacturing process itself.

For the past several years, Boeing has been grappling with problems in launching its

latest major passenger airplane, the Boeing 787 Dreamliner. During its early develop-

ment, the 787 was hailed as the most commercially successful new plane of all time.

Airlines around the world preordered over 900 of the planes at a cost of $178 million

each before they ever took a test flight, based on its projected fuel efficiency, passenger

comfort, low maintenance costs, flexibility, and other major design elements. Boeing

subcontracted out the design and assembly of major components of the 787 to firms in

Japan, Italy, South Carolina, and Kansas but did not impose adequate coordination across

these various suppliers. As a result, subassemblies did not fit together properly, there were

numerous quality and delivery issues, and myriad other problems occurred. Indeed, the

first test flights for the plane were years late, largely because of supply chain issues;

the first plane delivered to a U.S. airline was not completed until 2012. And the airplane

continues to have manufacturing defects pop up periodically. Clearly, then, poor supply

chain management can be disastrous, especially for major new products.

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