You are here:
You are the business accountant in a manufacturing plant of a global health services firm working with the production team. Part of the team has oversight for quality control. In the last two years a production director from a competitor has joined the firm and has streamlined the systems according to his previous role.
Part of this has entailed cutting resources on quality control to increase margins and turnaround from production to delivery. As a result profitability has increased in the past six months.
However, there is increasing concern on the floor regarding risks in relation to quality and this has now been realised with a batch of medicine coming back as failing quality tests, as they are not consistent with either government or the company’s policies related to this line of medicine. There will be a cost implication of both destroying the batch and the production of a new one, but these can be written off.
According to policy, the batch should be destroyed and remanufactured and you have recommended this action. However, the production director has ordered for the batch to be passed and for it to go to market. He makes it clear this is the action he wants to ensure the forecast for the quarter is met.
With a dispatch date imminent what would be your next step?
Scenario 4: Risk and Supply Chain