As a manufacturing professional, did you ever wish that just once, the corporate “bean counters”—who never seem to understand what happens on a factory floor—could walk a mile in your shoes?
In a sense, that happened recently at International Paper Co., where 24 corporate auditors, tax and business analysts, and others in the company’s finance department participated in a two-day, board-based business simulation aimed at providing a better understanding of the paper manufacturing business.
For the simulation, developed by Business Methodologies International Ltd., Warrenville, Ill., the participants split into six teams of four. Each team took control of its own simulated paper company and competed against the other teams to produce the best business results. One person on each team assumed the role of finance manager. But the others—though financial professionals in their day-to-day jobs—were required to take on different roles within the simulated companies, including those of business strategist, sales and marketing manager, and manufacturing manager.
The experience opened some eyes, says Donald Johnson, an internal corporate auditor at International Paper’s Memphis, Tenn., headquarters. Johnson helped organize the event and was one of the 24 simulation participants.
“Being on the financial side, oftentimes we really don’t understand what goes into the numbers that we reconcile on a monthly basis, or the numbers that we deal with,” says Johnson. But by wearing different hats and working as a team with other, non-financial disciplines during the simulation, Johnson says that the participants were able to see the business from an expanded perspective. “It developed a greater appreciation for some of the decision making and some of the issues that the other parts of the company are faced with,” he relates.
On the manufacturing side, Johnson says he now better understands why plant managers at some of International Paper’s 150 production facilities worldwide do certain things financially. For instance, many of the plants operate nearly around the clock, and only shut down for two weeks each year for annual maintenance. From an accounting policy perspective, says Johnson, the lost production during that shutdown should be recorded on the books as one big hit during the month of the shutdown. But the plants sometimes want to accrue charges for a couple of months in advance of the shutdown to help smooth out the ride, he notes.
OK, do it
As an auditor trained in accounting, Johnson says he typically objects to that approach. But after going through the business simulation last June, he now “better appreciates where they’re (plant managers) coming from,” and may now be willing to change his attitude.
“We have to make sure that our financial statements and accounting policies are up to par,” Johnson point outs. “However, if we feel like financially there’s not a problem for them to accrue for those couple of months, then we’ll let them smooth it out.”
It’s one example of how a business simulation help can create better understanding within a company, and as Johnson puts it, can make for a little less “head bumping” between departments.
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