Because the foreign companies lack such a relationship, they are going directly to large retailers of office fur-niture with great success. Price, delivery perfor-mance, and product features are the primary competitive advantages of these new entrants to the market. The pay system compares actual units produced with standard hours to manufacture the units. When actual hours are less than standard, incentive payments are made to the employees. Also like Acme, Gotham's factory suffers from a lack of investment.
Equipment is old, and manufacturing procedures are primarily manual.
Supervisors spend most of their time assigning workers to various jobs and equipment or expediting orders through production. Recently a new robotics system proved to be a complete failure. They knew how to solve the problem, but experience told them that the needed changes would result in higher standards and potentially lower earnings. Consequently, management returned to a manual sys-tem and never asked employees how the equipment could have been better used Although the employees were disappointed with the waste of money, they continued to earn their original production incentives. These two case studies illustrate problems facing many manufacturing companies with piece rate systems.