question archive CASE ANALYSIS Scenario Pigs R Us (PRU) is a second-generation, family-owned Richmond-based company with about 400 employees
CASE ANALYSIS Scenario Pigs R Us (PRU) is a second-generation, family-owned Richmond-based company with about 400 employees
Subject:Operations ManagementPrice: Bought3
CASE ANALYSIS
Scenario
Pigs R Us (PRU) is a second-generation, family-owned Richmond-based company with about 400 employees. It slaughters, manufactures, and sells pork food products. Pigs R Us (PRU) is a low-tech, hands-on, "bricks and mortar" type of company with solid brand recognition, an impeccable reputation for high quality and ethical standards. The processes used in manufacturing are with the highest ISO20002 standards, and the plant is maintained immaculately. The personnel is comprised of an older workforce (average employee age is 47). There is little staff turnover, though lately there has been a diverse group of younger workers joining the company. There has been an impressive record of speedy state and federal new-product approvals, and solid working relationships with their large and small customers.
The company prides itself on the close "southern family," culture of the business. The company logo features a pig with a smile on its face surrounded by small pictures of some of its oldest serving employees. The organization's structure is "old-fashioned". It is hierarchical with rigid management divisions and reporting policies. Research, manufacturing, and sales and marketing operate in traditional fashion, with employees reporting to supervisors or mid-level managers. By the 1990s, sales and distribution grew from Richmond into a regional market, establishing a competitive advantage throughout the US South. Despite downward economic times in the US and the South, the pork business does well. This is due largely to the fact that Pork is one of the cheaper meat products and there is a variety of ways it can be prepared.
Owned by the Morris family for the last 60 years, Pigs R Us is a key player in the Richmond based food industry. Various Morris family members sit on the board of charities throughout the city and it is not unusual to see the name at society events. Further, the Company sponsors its own Little League Team and has built a recreation center and assisted living facility for the elderly, guaranteeing space for all former 20+ year veteran workers of the company for free. So, it was no surprise, that the whole community was devastated when it was announced by the Morris family that Vance Morris the CEO of Pigs R Us was killed while driving back from a Pigs R US board meeting. The plant closed for a week to show respect and to determine how it would function until the family could make its succession decisions.
Vance Morris was the only son of James and Kathleen Morris. Vance took over the business 10 years before when his father had a heart attack and died. Fresh out of graduate school when his father died. He took over the business that he had known well much to the pleasure and keen eye of the workers. Vance made some marketing changes that allowed for the growth of the company and with the help of the employees brought the plant into its current state. Vance had just gotten married the year before to a young Richmond artist he had met at one of his charity benefits. He had no heirs and no plans for succession as he was in his mid-thirties and had just gotten married. While Vance had cousins in the area they were all professional people who knew nothing about business or pork. The workers could only surmise that the company would be sold, but speculation as to whom it might be did not include someone from out of the city.
Before the deal was announced publicly, John's widow, Kathleen, reported to the workers that a Chinese company, Pinyin Shanghou (SHU), would be buying Pigs R US. Mrs. Morris assured the workers that SHU promised not to cut workers' wages and benefits, and to keep the current management team in place. She said that SHU also promised to keep Pigs R US headquarters in Richmond. Kathleen assured the workers that SHU promised that there would be no changes for the first year and that almost everything would remain the same. From her talks with SHU, Kathleen is a bit worried about future changes that SHU may implement.
SHU is a large manufacturer and distributor of food and beverages with, headquarters in Hong Kong. Manufacturing plants operate in mainland China, and the company has additional offices in Europe and Australia. By acquiring the smaller, well-respected Pigs R US, SHU aims to diversify and expand its consumer base by including tailor-made pork products globally to meet market projections of a customer upsurge in sustainable, non-beef meats in the next decade. Given SHU's current availability of telecommunications software and hardware, the deployment of the Pigs R US refrigeration trucks should not be an insurmountable issue.
Many PRU employees, especially the older workers and some of the older managers, are dispirited about the acquisition, and anxious about working for foreigners, downsizing, less face-to-face interaction, language differences, and more electronic systems that are to be put in place. Some of the of the more experienced workers are considering a move or an early retirement due to the ongoing rumors about the acquisition. To make matters worse, recent news media have printed stories about tainted food made by other companies in China. Employees fear the loss of product quality and damage to PRU's reputation as well as the loss of the family southern culture that was their pride and joy.
SHU has told PRU workers that for now, most employees will be retained. However, all employees will be evaluated and reassigned to teams as the new flat structure is put in place. The new CEO is Harvard-educated Daniel Chinn. He supports increasing the company's competitive edge by discovering and developing existing individual potential through group collaboration and team synergy. Ever since his days as a brilliant, hard-driving MBA student; he has been known to be an enthusiastic supporter of job training and career growth. Like many of SHU's employees, Daniel is in his early thirties. He speaks four languages and is ambitious, self-directed, tech-savvy, accustomed to working remotely, and experienced with culturally diverse staff. Daniel is eager to make his newest acquisition a success. He wants to move forward on the integration of "Pigs R US' workers into SHU because Chinn believes they are the "greatest asset has a rich knowledge base and experience can be tapped into to bring the company success." Chinn is concerned about the mix of culture and how his ideas of incorporating artificial intelligence and more robotics into the manufacturing processes will be received by management and the workers at the newly acquired plant.
Daniel Chinn is anxious to keep the "southern family" culture of Pigs R Us but at the same time wants to use the most modern of manufacturing techniques. He decided to start a pilot change operation in the packaging area to demonstrate to the workers the effectiveness of the technology. He bought and set up for using 3D printers in the packaging room. The printers were able to create reusable shipping materials and operate in conjunction with the product conveyor for fast and easy packaging. He brought in two trained 3D printer operators from China to handle the work along with two robots that would move the packaging material and create shrink-wrapped pallets for loading on to the trucks.
The current packaging department employs 5 workers on the day shift and 3 newer workers on the night shift. All the dayshift workers are in their early fifties and have been working for Pigs R Us all their lives. John Mellon, the lead lineman, exemplifies the group. He is 53 years old. He has a family of three children most all are grown. One works in the business with him as the manager of the accounting department having gotten a college degree, unlike his father. John rarely travels out of state and has never been abroad. He is not terribly familiar with the technology. He has a Smart TV but his children have set it up for him to use Netflix.
When the new employees arrived, the packaging staff tried to get to know them but had little in common and found it hard to communicate with them. The new workers ate together at lunch and always with the food they brought with them despite offers of food brought in by the older employees to show their "southern roots". Things are strained between the groups because the older employees thought they were being snubbed and many are uncertain as to the customs and language unable to communicate their real feelings. This all operated to birth a schism among the workers which escalated into job performance and employment commitment issues when the six-month results from the 3D/Robot pilot showed the following success in favor of new technology.
Measurable Factors Day Shift
Standard
3D Printing
Cost
5.06
5.01
Time
2.36
2.69
Quality Control Problem Ratio (per 500 units)
1
1.75
Training Time (per hour)
30
35
Shipping Problems/Damage (per 10,000 units)
1
0.4
Production Problems (per 10,000 units)
0.2
0.4
Total Number of Pieces Produced per year
675,000
525,000
Measurable Factors Night Shift
Standard
3D Printing
Cost
5.06
4.98
Time
2.36
2.27
Quality Control Problem Ratio (per 500 units)
1
1.75
Training Time (per hour)
30
35
Shipping Problems/Damage (per 10,000 units)
1
0.35
Production Problems (per 10,000 units)
0.2
0.23.5
Total Number of Pieces Produced per year
575,000
645,000
The results showed such a marked process improvement with the added benefit of creating materials that were sustainable. The immediate reaction among the older workers was fear for their jobs. The new workers suddenly were the enemy. Chinn was pleased with the new process and indicated that the 3D printing approach would be continued. The word of the decision spread among the families in the company and the "southern family "culture was now closing ranks on the newcomers both in the packaging room and in the other departments thus confirming their fears when news of the buyout surfaced.
Using the evaluation process in OD what are 4 challenges management will face and what tools and skills can be used to handle the management challenges and why?
What is the culture change process and how do executives, managers and employees contribute to the change process?
What strategies can be used for how change can be reinforced now and into the future and why those strategies should be used?
What is the evaluation summary analysis for this study? What roles do employees and management have and what changes can be implemented and reinforced to ensure an efficient organization?
