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campbell soup case - Tyler Johnson Hyun Kim Charlie Nomides...

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Unformatted text preview: Tyler Johnson Hyun Kim Charlie Nomides Caitlin Vodopia Case 1 Analysis — Campbell Soup Case Plastigon has been an extremely costly project spanning many years and continually running into roadblocks and obstacles Integrating the new microwaveable soup technology with Campbell‘s products will serve to open up a new market, however proper management ofthis transition and new technology is necessary to ensure that it can see successful entry to the market Currently, the Plastigon project is at a cross road as to whether or not it should be continued. After five years of development, the project has still not shown that it will be able to produce vast quantities of the soup as desired The three main problems with the Plastigon manufacturing are as follows: the team working on the process is decentralized so it is hard for them to meet at the plant’s location to work on the assembly line together, when the engineer’s are actually together to work on this process, they tend to be focused on their individual parts of the chain as opposed to the line as a whole, and there are issues with the assembly equipment along with the ceiling of production The business hierarchy that Campbell Soup Company has adopted by separating their business units and sales force into five regions has led to the company becoming highly decentralized. There are multiple engineering sectors in the company along with three different packaging sectors. The team working on Plastigon consists of many engineers from each ofthese sectors, each with their own projects along with the Plastigon project These engineers have been asked to fly to the North Carolina plant multiple times within a span ofa few months, which has led many to become “burnt out” and asking to be transferred to another division. This leads to adding new engineers to the project who need to be caught up on the previous engineer’s work along with gaining familiarity with the Plastigon project. Along with this lack of cohesion, the plant itself was reluctant to cooperate with the project because they were unsure of whether or not the project will prove to be a fruitful endeavor. Plant managers were unwilling to dedicate their workforce to this project, since the manager’s job performance is based on sales numbers. By dedicating more workers to a project that is not producing any sales, their final sale numbers would be lower than iftheir work force was working on production that contributed to final sales number 8. Another source of worry came from the engineers focusing on their individual pieces of the assembly chain as opposed to trying to make the process work as a whole. For example, as warning alarms would sound on one piece ofthe assembly line, multiple alarms would sound off at a different part ofthe line Instead of working together to find out the source ofthe alarm, each would go about trying to diagnose the problem in their individual area. While this would stop the alarm in their area, it would not explain the overall problem of the integration ofthis system. There were also several problems with the machinery that was involved with Plastigon For instance, one of the machines that would put the soup in the bowl would cause soup to splash onto the rims of the bowl, which led to the seal malfunctioning, resulting in a product that would be unable to be stored on a grocer’s shelf. There was also the problem of the limit switches. There were approximately 150 limit switches throughout the process. These alarms would be constantly sounding, causing a constant stoppage ofproduction in order to fix that limit switch, even if the problem was minor and would ultimately self-correct itself down the line. Elsner should look at Gardner’s proposal with the Plastigon project. Gardner believes that the Plastigon project will see significant progress within the next six months. Elsner should ask Gardner for a detailed cost benefit analysis to determine whether or not the amount spent in the next six months will result in sustainable competitive advantage. We believe that the Plastigon project should be cancelled. Although this project has been ongoing for 5 years, any money previously invested in the project should be viewed as a sunk cost, which cannot be recuperated. Even ifthis project would prove to be a success, it is an easily imitated technology that other firms could easily capitalize on. Other firms would be able to benefit from Campbell’s years of effort. There are no other significant barriers of entry in the microwavable soup market. For these reasons, we feel Campbell’s would be better off doing a rigorous cost benefit analysis and seeing what the next best course of action would be. As stated in the case, we feel that the marketing department statement reflects our stance most accurately; “While all ofthe technologies have attractive features, it is not clear that any of them is really necessary. A lot of the impetus to go into microwavable soups has come from McGovern rather than from solid market data. If you think about it, if we can just increase our market share in the red and white brand by one or two points, we would end up with more profit than from any reasonable sales projections for all these other segments.” The first lesson that Campbell can learn from this project was that they should focus on what they do best, which is producing soup. They should look at their entire supply chain and identify what their core competencies are and which processes they should outsource This foray into packaging has clearly shown that Campbell is not is equipped for heavy R&D endeavors. Analyzing other processes in the supply chain could expose more inefficiencies and result in cost savings from correcting and/or outsourcing For example, Campbell’s might find that owning or purchasing farms may increase margins and quality. The second lesson they can learn would be to scrutinize all potential products thoroughly with market data to make sure that a sustainable competitive advantage is viable For companies selling commodity goods where many components are not complex in nature, new technologies are easier to imitate, thus lowering barriers to entry. If this were an internal manufacturing process, other companies would not be able to copy the method. However, since this is a product available to the general public, other firms can analyze the technology and easily replicate it From an operations standpoint, the lesson learned is one ofproject management. The engineers themselves focused on their own specific issue, which is acceptable, but a lead engineer or a project manager should be analyzing the bigger picture to see how different engineering hurdles may be related. We see these failures in the actual manufacturing process as individual alarms were taken as separate problems when in actuality they were most likely related They should have identified the fact that by adopting a decentralized business model, it would make this project difficult to complete. Although it is not necessarily detrimental to production to have a decentralized model, these models work best when regional producers are personalizing products for their constituencies. ...
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