November 27, 2017
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People like myself (bookkeepers & accountants) are sometimes referred to as bean counters. The none-too-complimentary implication is that we spend hours at our desks sorting beans into little piles with no idea of what those beans represent. It isn’t necessarily so.
I used to work in the quality assurance department of a factory that made engineered rubber products for the automobile industry. The automobile companies asked for bids to produce parts for them. We had a team of engineers who would do a thorough analysis of the costs of producing a part and our company would bid on the ones we thought we could profitably manufacture.
One part that we contracted to make was produced on a very high tech, made in France, rubber injection moulding machine. The bid had been based on one person being able to load and unload the machine, hand trim the little bits of excess rubber and pack the parts in a shipping container. Once in actual production it was found that a second person was needed. The production management computer program showed that this skyrocketed the costs and we were losing a bundle on this part. After two years we did not bid on this part again.
Up to this point accounting had been done in an office in another city. Then an accountant was relocated to an office in our plant. She was intrigued by the huge cost overrun on this part and began to investigate. It didn’t take long for her to discover that when a second person was added for making this part, the computer program automatically added another expensive injection moulding machine and calculated the capital cost allowance and operating expenses for this second machine. When she removed that phantom machine from the calculation she found that the part had been a money maker, not a money loser.
At that point I left to become a missionary in Montréal, but I understand the company was preparing to bid on that part again the next time it became available.