Problem Statement and Company Objectives

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Moving Forward: Plastigon vs. DRG

There was a strong sentiment inside the company that instead of Plastigon, the company should develop an intermediate product made of DRG, which was a slight modification of what the competitors were offering. The company had invested a lot of money and resources in Plastigon over the last 4 years and scrapping it altogether was a tough decision. The estimated sales from Plastigon was also higher than it was for DRG, which was an indication of what the customers prefer now and that Plastigon might be more suited to future needs. The engineering team felt that they can reduce production costs of Plastigon to half over the next three years. Basic data analytics show that although DRG would be cost efficient than Plastigon at the moment, but after three years, keeping in mind the projected learning curve of both products, Plastigon would generate much more profits than DRG (Table 1). The company should not switch to DRG in the short run but continue to improve their learning curve in producing Plastigon and produce as less as necessary for improving the learning curve and it will be profitable in 2-3 years time.

Conclusion

Plastigon was an innovative packaging of ready to serve soup that would satisfy the current and future needs of the market, which the company identified through customer surveys and focus group studies. Even though it was a novel and promising idea, they run into troubles on day one due to lack of integration between teams, assigned team members and project coordinator without the relevant experiences, and an unsupportive company culture towards Plastigon’s success. Based on these problems, there are several improvement strategies that should be done for future projects. First, a better integration can be achieved by improving of knowledge development and transfer between divisions in the project team. Second, having a committed team with the right expertise will ensure that the project follows the desired timeline. Lastly, a committed team should also be supported by a cooperative company culture that eliminates discouragement to contribute towards the project.

References:

Gaimon, C., Hora, M., Ramachandran, K. The Routledge Companion to Production and Operations Management. Routledge Taylor and Francis Group, 2017. New York, NY, USA. Print. Chp. 10. pp. 197 - 209.

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Three heads of program in a span of 4 years, not enough thinking on part of who should be an ideal candidate to lead the program.

Suggestion: apply for government project to establish a talent center?

The recommended approach to tackle these problems would be to implement better project management practices.

-Huge delays on the Plastigon product launch due to managerial and technical issues (?)

-one of the disadvantages of decentralized firm is poor communication. Program coordinator hold task force meetings on a biweekly or monthly basis, the interval is so long that the coordinator cannot keep up with the progress, and he may made some unwise decisions under this circumstance. Also, decentralization gives local managers much power, which could lead to conflicts between different parts of production line. (benefit individual department instead of company--evaluation system?)

Company Objectives:

- Respond to greater consumer demand for quality, freshness and convenience through microwavability

- To be able to react to changes in competition (e.g. imported Japanese products such as dried ramen noodle soups)

- To not lose the status as a market leader

Data Analysis/Causes of Problem:

- Traditional organization structure

- Organization structure was not adapted for developing new technologies since decentralization meant that people within the company were brought further apart, requiring members of the to frequently travel to one location to meet up and work on the project (re-centralize in some degree in order to save time and money on travelling）

- Poor resource allocation

- Poorly defined performance indicators

- Internal conflict on decision making

Guiding questions

1. How do you explain the current status of Plastigon after four years of effort?

- current status (1988): soup had been produced on the plastigon line, but the line would rarely work for more than an hour, large losses of product because of bad seals or other problems were common

- in page 8, engineers cannot work together efficiently (test separately, and problem comes up when testing the line as a whole), responsibility (not get involved too early)

- They can keep the Plastigon plant running for only half an hour or so.

- Campbell had the advantage, but it was decreasing because many competitors started working on microwaveable product during 1986 and 1987

2. What should Elsner do about Plastigon?

- More dedicated teams with clearly defined roles and responsibilities (e.g. implement a RACI matrix)

- Better integration between product development (CIRT) and process/engineering department (CCID)

- Synchronizing technical knowledge between them

3. What can the firm learn from its experience with Plastigon?

- Don’t go to the final product directly. If possible, create some intermediate products which will lead the way to final product

- Improve project management practices

- Right man for the right job

- Don’t go into launching a new product without proper market analysis. A need was felt for microwavable soup, but there was no proper market analysis of forecasted demand. As one marketing manager pointed out, that a lot of impetus to go into microwavable soup came from McGovern rather than solid market data.

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