Management Control Systems

Management Control Systems

Sociedade Industrial Portuguesa, Ltd.

11th of May of 2011

Our Analysis

To find who should be responsible for the lost of the package ordered, and consequent costs associated with the stoppage of the assembly line we need to see what failed in the whole process.

Using the concepts learned during the last classes we know that the problems of this nature within an organization may come from two different fronts: How do they prepare the info? and How do they deal with it?. In this case we believe that the main problem relies in the first question, in other words, in the methodology used.

First of all, the methodology used for Planning and Management Control it’s not accurate. The six months planning doesn’t seem optimized and may bring several problems. One of these problems may exactly be how to deal with urgent situations. IF an urgent order needs to be done in May, the company can only allocate it in the second semester planning.

In order to fulfill the company needs and address the manufacturing process failure, Luís Simões decided to skip the usual steps of the methodology used and told João Nunes to register a new order, an urgent one, out of the semiannual plan.

Even though João Nunes is only responsible for the execution of this plan, he gave his best to try to find an adequate solution to solve the company’s problem. He could reach a supplier that assured him that the deadline would be met. Until the delivery date João kept the record of the package location and did whatever he could to make sure the order would arrive in the agreed date. However, and despite his efforts, the package was lost. At this point we can say that the supplier has the ultimate fault of the material loss.

On the other hand, concerning the costs associated with the episode, we would say that Luís Simões and his department should be responsible for the outcome of this situation. As we said, although not efficient, the methodology was skipped and...