The dark side of good decision making

Back in 2009 I was working as a junior analyst working for a manufacturing company specialising in enamel coatings. I had just finished my degree in mechanical engineering and (surprisingly, given enamel is exactly as interesting as you’d expect) I was loving applying my statistical knowledge to real-world problems.

For one particular project I was asked to model the implications of switching the supplier for one of the factory’s major raw materials. I modelled the cost and quality implications and presented my findings to the factory management team. My calculations were pretty convincing. Switching supplier would bring a 25% reduction in the cost of product for an almost negligible decrease in quality. The factory manager disagreed. He refused to consider any cost savings which could even risk a reduction in product quality and the project was canned.