Case 2 Bell Jeans Berhad
Bell Jeans Berhad was founded in the mid-sixties. The firm survived several lean years and economic recessions largely as the result of the market durability of its dominant product—blue denim jeans. Bell Jeans had been a market leader with
"wash-and-wear," bell-bottom and flare jeans, and modern casual pants. By 2009 it was one of Malaysia’s largest clothing manufacturers. It offered a wide variety of dress and fashion jeans for both men and boys and a complete line of pants for women.
It enjoyed a reputation for reasonably priced, quality pants. The company sold 40 million pairs of pants last year.
In each of the last 30 years, Bell Jeans sold virtually all its production and often had to begin to…show more content… "The plant budgeting begins with me and my staff determining what a plant's quota (in pairs of pants) for each month should be for one year ahead of time. We look at the plant's past performance and add a little to this because we expect people to improve around here. These yearly budgets are updated at the end of each month in light of the previous month's production. If a plant manager beats this budget figure, we feel he has done a good job. If he cannot meet the quota, his people have not been working at what the engineers feel is a very reasonable level of speed and efficiency. Or possibly absenteeism or worker turnover, big problems in our plants, have been excessively high.
When the quota has not been reached, we want to know why and want the problem corrected as quickly as we can.
"Given the number of pants that a plant actually produces in a month, we can determine the number of standard labour hours allowed for that month. We compare this figure against the
actual labour hours to determine how a plant manager performed as an expense centre. I phone every plant manager each month to give prompt feedback on either satisfactory or unsatisfactory performance. "We also look for other things in evaluating a plant manager. Have his community relations been good? Are his employees happy? The owners of this company are very concerned about these factors." An annual bonus constituted the core of Bell Jeans'