Fifty Percent Cutter

Babu Kutter got the fame as “50% cutter” in the new unit of Famous Expo Industry. The new unit of this company was in its project stage and obviously it had yet to breakeven and to start making profits.

The President of the unit was indoctrinated into Famous Expo’s very important dogma of thrift. Famous Expo was famous for its economy initiatives and managers of other organizations were deputed to Famous Expo to learn those tricks of the trade which saved enormous money for Famous Expo and earned for it one of the best profit figures in the industry.

The President of the unit had come up from the ranks in the company and swore by its principles of frugality. The motto of the company was, “Save wherever and whenever even remotely possible”.

The new unit of Famous Expo which was in its commissioning phase had employed people from various outside organizations. Therefore, they were yet not so conscious about the economy principles of the company.

Being a new unit, the activity of purchasing this thing or that thing was one of the highest order activities. All kinds of employees from all kinds of departments of the unit used to raise purchase requisitions for various materials required for the completion of the project. Absence of a budgeting system (the unit being new, this system was yet to be formulated for implementation) and absence of consumption norms (again, the unit being new) made it difficult to find out a basis for approval or disapproval of the quantities of materials requisitioned.

Yet, the President found out a way of controlling the incessant purchases by installing Babu Kutter in the unit’s budget control department. Babu Kutter was a carbon copy of the President at least in the matters of respecting money. He had earlier worked under the shadow of the President in company’s other units. The President was confident that Babu Kutter was a system in himself and that system had a way of controlling the expenses. The President himself did not know exactly how Babu Kutter used to control expenditure in the company; but he knew for sure that it worked thoroughly though it always remained an enigma to him. Yet…….

As soon as Babu Kutter was brought in the saddle, all the purchase requisitions started getting routed through Babu Kutter before they landed on the desks of the buyers of the unit. Babu Kutter invariably slashed down the quantities on the requisitions. For example, if a user department’s manager asked for purchase of say 100 kilograms of some material, he invariably was made to get a surprise by receiving only say sometimes 70 kilograms or other times say 65 kilograms. When enquired about the short purchases, the buyers would direct their fingers at Babu Kutter of budget control. When they asked Babu Kutter about it, he simply used to say, “Start working with 70 kilograms. Right now the funds are a bit of a problem. Whenever and if you feel the necessity for the rest 30 kilograms, you can always raise a supplementary purchase requisition.”

The user department’s initial reaction to this was, “Fair enough.” But soon they realized that this story of Babu Kutter was going on and on; short purchases became a rule. Short purchases were creating problems in the expeditious completion of their work. On the other hand constant pressure was created by the President all the time to expedite the project.

Whenever, the user managers took up this case of short purchases pointing out to Babu Kutter as the reason, the President used to laugh out and say, “Come on. He is doing his job. You should do yours.” And the matter died there.

Soon user departments learnt a new trick. They would inflate the figures of materials to be purchased by around 25% to 30% over and above what was actually needed, on the purchase requisition slips. And after the cut by Babu Kutter, they would finally receive exactly the quantities of materials they needed. Soon, people stopped complaining to Babu Kutter or the President.

Babu Kutter and the President were no fools. Stoppage of complaints from user managers alarmed them. They conferred with each other and secretly worked out a new system of budget control.

From that day onwards, Babu Kutter started cutting the quantities on the purchase requisitions by exactly half. He started applying his well tested formula of 50% cut. Babu Kutter’s job became simpler and more effective. He did not have to think about whether to cut 20% or 25% or 30% or any other percent, he had just one figure to apply i.e. 50%.

It created havoc amongst the user managers. But they could not do much about it. They had played a trick and now Babu Kutter played a trick. Tit for tat- nothing wrong about it. So, they ganged together to teach Babu Kutter a lesson. And soon an opportunity came their way.

The President had decided to shift from his make shift city project office to his new permanent factory office. The office needed furnishing and decoration befitting a president of a highly reputed and huge organization of the scale of Famous Expo. Unit’s administrative manager was in charge of this.

Administrative manager performed his job of furnishing the new factory office of the president meticulously.

And one fine day, the President wanted to inspect his new factory office and also inaugurate it formally before physically shifting there. All the heads of the departments of the unit along with their key subordinates including the administrative manager and Babu Kutter were invited to attend this inaugural ceremony.

The president cut the ribbon. Everyone present clapped. And the president entered the office along with all the invitees. The curtains in the office attracted his attention first before he could look at anything else. He noticed that all the curtains were half in length of the standard length really required of those curtains. All the curtains started from the ceiling alright but invariably abruptly ended somewhere in the middle of the window or middle of the wall. They looked like rags and incomplete.

He was furious. He was fretting and fuming. He looked at the administrative manager accusing him with his eyes gone red and watery, “What’s this joke?” He could not speak any more; he was feeling so very humiliated in front of so many of his subordinate employees.

The administrative manager said with a calm and quiet disposition, “Sir, I had asked for the full length curtains on my purchase requisition alright but I understand that Mr Babu Kutter cut it by 50% as an economy measure. That’s why.”

Related Books

1. "Sensitive Stories of Corporate World" (available from Amazon, get it online as a paperback or an eBook)

Read many more management anecdotes/management case studies in the eminent author Shyam Bhatawdekar's best selling book "Sensitive Stories of Corporate World" available online from Amazon as an eBook as well as a printed book.

2. "Sensitive Stories of Corporate World (Volume 2)" (available from Amazon, get it online as a paperback or an eBook)

Read many more management anecdotes/management case studies in the eminent author Shyam Bhatawdekar's best selling book "Sensitive Stories of Corporate World (Volume 2)" available online from Amazon as an eBook as well as a printed book.

Other Related Reading

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