Problem procedure

• Problem-finding procedure


  • Operation of a standard cost accounting system
• Standard cost accounting system

  1. Establish standards for unit direct materials and unit direct labor costs

  2. Establish allowable variances from these standards

  3. Periodically compare actual unit direct materials and direct labor costs with standards

  4. Flag variances that exceed allowable ranges for production management attention
• Final statement of the problem

  • Contains objectives to be achieved by the solution
  • Scope, intensity, time dimensions, and location of the problem
  • Human elements involved in the problem
  • Support system and tracking systems related to the problem solution
  • Institutional process for managing the problem
• The statement may clearly separate the symptoms from the underlying causes of the problem, identify relevant constraints, and reveal key relationships among the factors involved in the problem situation
• The consultant should be aware of and avoid possible pitfalls in identifying the problem
• Possible pitfalls in identifying the problem

  • Mistaking symptoms for the underlying problem
  • Accepting without question the opinions of others concerning the problem
  • Assuming that the problem is a person rather than the behavior or non-behavior of people
  • Assuming that the person who reports the problem is the cause of the problem
  • Overlooking the multi-causality of problem
• All the underlying causes of the problem should be isolated and clearly stated
• Identifying the underlying causes may help uncover key interrelationships among the causal factors
• Time Dimensions of the Problem

  • How long has the problem existed?
  • How much longer is the problem likely to continue if left unsolved?
  • How often is the problem likely to occur in the future?
• While in most problem situations the location can be easily determined, in some extreme situations the location may require laborious retracings of tangled paths.
• Human-related elements to be identified and assessed in the statement of the problem

  • Attitude of involved managers and employees
  • Personal traits of involved managers and employees including intelligence, motivation, leadership, quality, dependability, trustworthiness, and interpersonal skills
  • Training of involved managers and employees
  • Tenure of involved managers and employees
• Tracking Systems Related to the Problem

  • How the problem was brought to light
  • Whether the problem was detected by a tracking system so designed for the purpose, or by another means (if not detected by the tracking system so designed for the purpose, why the tracking system failed)
  • Whether tracking systems other than the one designed for the purpose should have detected the problem
  • Whether tracking systems are available to monitor the situation reliably, as well as to measure the degree of improvement in the process or system due to an implemented solution