Milan Sanitation Department Case Solution

2. Strengths and Weaknesses of the Systems Introduced at the Central Repair Facility

Mr. Sponza took some radical steps to solve the prevalent work/productivity-related issues in the bureau. 

Formation of labor/management committees representing each shop meant all the departments were given an equal chance to put forth their concerns/problems. Moreover, rather than enforcing new rules and regulations Mr. Sponza let the committees to suggest improvements in the system, this self-correction mechanism and freedom of expression inculcated a sense of responsibility towards improving the situation at the bureau.

A major strength of the system was that it ignored the time factor and only cared for productivity and completion of tasks assigned to the shops. Though the bureau shouldn’t have neglected the work standards since this could lead to malpractices at the workplace. Also, the system neglected an individual’s productivity, which means workers with high and low productivity are treated equally, which obviously is a loophole in the system and needs to be addressed.  

The concept of profit center developed a certain level of competition amongst the departments each trying to beat the other in productivity and profits. It was a phenomenal idea to include all the relevant direct and indirect costs such as salary, fringe benefits, depreciation of machinery, etc. in the total cost of outputs. On the downside, it was discovered later that the inclusion of these costs is not as convenient as it first appeared. For example, the cases of engine shop where it was difficult to find the true estimates for costs. There were issues in reporting productivity, employees were deliberately miss-quoting the number of hours required to do a specific task because they feared that if they beat the industry standards then there are chances that their status quo might shift upwards; hence, they kept their productivity factor a little above one.