"Gray" areas in the work of a production manager
Posted: Mon Jan 20, 2025 7:24 am
Financiers believe that the production manager has nothing to hide from the management. The risk of corruption is high in other areas: sales and purchase of products. However, the production director may also have his own secrets, which every manager should keep in mind in advance.
Such an employee works with people, is responsible for materials received in the workshop, production of products. In theory, it is possible to steal both materials and even finished goods. However, it is necessary to measure the possible benefit from such actions with the consequences. It is difficult to imagine that a top manager of a large enterprise would take such an unjustified risk.
However, this does not mean that the production director cannot do any harm to the company.
Extracting personal benefit from the peculiarities of production
The standards for consumption of raw materials and rejected products, which the production director approves after the chief technologist, create the ground for personal enrichment.
For example, a company produces office 365 database technologically complex products, the suitability of which for use can be determined only with special knowledge and devices. At some point, the share of defective products reached a huge 20%. The company owners turned to experts to solve the problem.
It turned out that less than half of the total volume of products sent as defective were unsuitable for use. As you might guess, the rest was sold directly to the production manager at much lower prices. The company suffered losses, while the director personally enriched himself.
Corrupt practices
The final word in resolving many issues at the enterprise rests with the production manager. For example, he approves the purchase of new equipment, work on modernizing existing production. There is room for dishonest actions here.
Also, the production manager may collude with suppliers of materials, agreeing to purchase them at a price higher than the market price. This problem can be solved by transferring the chief technologist to direct subordination to the CEO, as well as by engaging third-party specialists.
There are also some rather original fraudulent schemes. Not long ago, one of the telecommunications companies took part in a tender for a lucrative contract. When studying its proposal, it turned out that the conditions proposed by the company were significantly worse than those that competitors were ready to provide. The tender was lost. This was followed by an internal investigation. It turned out that competitors had bribed the production director who determined the parameters of the proposal.
The production manager does not worry about costs and does not strive to reduce them.
Including bonuses for reducing expenses in the list of bonus payments for the production manager is a risky move. In pursuit of savings, the director may reduce costs so much that the quality of the product suffers. At the same time, if you do not demand from the manager an economical use of resources, he may build the production cycle in such a way that the costs will be inflated.
Such an employee works with people, is responsible for materials received in the workshop, production of products. In theory, it is possible to steal both materials and even finished goods. However, it is necessary to measure the possible benefit from such actions with the consequences. It is difficult to imagine that a top manager of a large enterprise would take such an unjustified risk.
However, this does not mean that the production director cannot do any harm to the company.
Extracting personal benefit from the peculiarities of production
The standards for consumption of raw materials and rejected products, which the production director approves after the chief technologist, create the ground for personal enrichment.
For example, a company produces office 365 database technologically complex products, the suitability of which for use can be determined only with special knowledge and devices. At some point, the share of defective products reached a huge 20%. The company owners turned to experts to solve the problem.
It turned out that less than half of the total volume of products sent as defective were unsuitable for use. As you might guess, the rest was sold directly to the production manager at much lower prices. The company suffered losses, while the director personally enriched himself.
Corrupt practices
The final word in resolving many issues at the enterprise rests with the production manager. For example, he approves the purchase of new equipment, work on modernizing existing production. There is room for dishonest actions here.
Also, the production manager may collude with suppliers of materials, agreeing to purchase them at a price higher than the market price. This problem can be solved by transferring the chief technologist to direct subordination to the CEO, as well as by engaging third-party specialists.
There are also some rather original fraudulent schemes. Not long ago, one of the telecommunications companies took part in a tender for a lucrative contract. When studying its proposal, it turned out that the conditions proposed by the company were significantly worse than those that competitors were ready to provide. The tender was lost. This was followed by an internal investigation. It turned out that competitors had bribed the production director who determined the parameters of the proposal.
The production manager does not worry about costs and does not strive to reduce them.
Including bonuses for reducing expenses in the list of bonus payments for the production manager is a risky move. In pursuit of savings, the director may reduce costs so much that the quality of the product suffers. At the same time, if you do not demand from the manager an economical use of resources, he may build the production cycle in such a way that the costs will be inflated.