Question

Read Case Study Conifer Corp. (Chapter 8) in your textbook and answer the discussion questions that follow.

Required:
1. What symptom(s) in this case suggest(s) that something has gone wrong?
2. What are the main causes of the symptom(s)?
3. What actions should executives take to correct the problem(s)?

Answer 1

1. What symptom(s) in this case suggest(s) that something has gone wrong?

The key symptoms that something has gone wrong include the following:

·         The productivity of the packaging department has decreased leading to a large stock of a finished product is piling outside the packaging building.

·         The morning shift of the packaging department is unable to cope with the combined production of the planer and sawmills departments.   So they need “the afternoon shift packages even less product than the morning shift, so the backlog continues to build.”

·         The unpackaged finished goods are left outside the building for the after shift. This all adds “to Conifer’s inventory costs and increases the risk of the damaged stock.”

·         The afternoon shift is unable to meet the packaging requirement so the backlog keeps increasing. They have “added Saturday overtime shifts as well as extra hours before and after the regular shifts for the packaging department employees to process this backlog.”

·         The inventory carrying cost increases and the finished goods lying outside can get damaged. So it causes “backlog adds to Conifer’s inventory costs and increases the risk of the damaged stock.”

·         The time and motion study indicates that the packaging department is capable of packing the finished output. It is very disappointing and increasingly “frustrating to Conifer’s management because time and motion studies recently confirmed that the packaging department is capable of processing all of the daily sawmill and planer production without overtime.”

·         85% of the overtime is done by the packaging department who employ just 10% of the workforce. In the last month “the packaging department employed 10 percent of the workforce but accounted for 85 percent of the overtime.”

·         The finishing of the packaging of the final product is the cause of concern and because of that; many customers are shifting to other competitors. Refer to the detail that the West board takes to ensure differentiation in the product by packaging. The management has worked on packaging to create “some differentiation does occur in product packaging and presentation. Buyers will look closely at the packaging when deciding whether to buy from Conifer or another mill. To encourage its clients to package their products better, West board sponsors a monthly package quality award. The marketing agency samples and rates its clients’ packages daily, and the sawmill with the highest score at the end of the month is awarded a framed certificate of excellence.”

2. What are the main causes of the symptom(s)?

The main causes of the symptoms are as follows:

·         The productivity of the sawmill and planer departments have increased substantially due to better training, better selection of raw material and reduced machine breakdowns. The production departments efficiency results showed “The sawmill operation recently set a new productivity record on a single day. “

·         The employees in the packaging department are having extended lunch breaks and coffee breaks. They also waste time just before shift closing time. It is a cause of concern but “Employees and supervisors at Conifer are aware that people in the packaging department tend to extend lunch by 10 minutes and coffee breaks by 5 minutes.”

·         The temporary staff assigned to the packaging department also follow the practice of wasting time. Mostly they come on time and “they are punctual and productive in other departments, these temporary employees soon adopt the packaging crew’s informal schedule when assigned to that department.”

·         The abuse of work schedules is shown an upswing lately and it's more predominant in the afternoon shift. The inefficiency is propagated and “This abuse has worsened recently, particularly on the afternoon shift”

3. What actions should executives take to correct the problem(s)? with references and citations

The actions required by the executives to correct the problems should be as follows:

·         The packaging team should be called for a meeting and they should be given the opportunity to discuss their concerns and problems.

·         The team should be given a presentation and statistics how their inefficiencies are leading to the cancellation of orders and also increase in costs.

·         The workers should be given a period of 1 month to change their behavior or necessary action would follow.

·         After 1 month if there is no change in behavior, some key employees should be moved out and employees creating nuisance should be shifted to another department.

·         The wages can also be linked to the productivity and quality of work. The incentive scheme to motivate employee’s top to perform better can be started across the organization.