Readers Weighing In — Dickeson

(There’s one very nasty side-effect to this BHR prescription we haven’t mentioned. It tends to get communicated to the manufacturing floor and those good people are inclined to believe that budgeted hourly rates are the true costs.

“After all, management wouldn’t use them for pricing if they weren’t true, would they?” Analyze that one! When we increase the speed of a binder, the costs go down. Right? Wrong! Sorry, costs only go down if you decrease the number of hours of labor employed and paid. And that doesn’t show up in budgeted hour rates, does it? As an ex-lawyer, I wish there were someone we could bring a class action suit against for that deadly side-effect. We’d recover millions!)