Scenario
Pigs R Us is a second generation, family-ownedRichmond-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 companywith solid brand recognition, an impeccable reputation for highquality and ethical standards. The processes used in manufacturingare with the highest ISO20002 standards, and the plant ismaintained immaculately. The personnel are comprised of an olderwork force (average employee age is late 40s). There is littlestaff turnover, though lately there have been a diverse group ofyounger workers joining the company. There has been an impressiverecord of speedy state and federal new-product approvals, and solidworking relationships with their large and smallcustomers.
The company prides itself on the close "southernfamily," culture of the business. The company logo features a pigwith a smile on its face surrounded by small pictures of some ofits oldest serving employees. The organization's structure is“old-fashioned”. It is hierarchical with rigid management divisionsand reporting policies. Research, manufacturing, and sales andmarketing operate in traditional fashion, with employees reportingto supervisors or mid-level managers. By the 1990s, sales anddistribution 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 porkbusiness does well. This is due largely to the fact that Pork isone of the cheaper meat products and there is a variety of ways itcan 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 charitiesthroughout the city and it is not unusual to see the name atsociety events. Further, the Company sponsors its own Little LeagueTeam and has built a recreation center and assisted living facilityfor the elderly, guaranteeing space for all former 20+ year veteranworkers of the company for free. So, it was no surprise, that thewhole community was devastated when it was announced by the Morrisfamily that Vance Morris the CEO of Pigs R Us was killed whiledriving back from a Pigs R US board meeting. The plant closed for aweek to show respect and to determine how it would function untilthe family could make its succession decisions.
Vance Morris was the only son of James and KathleenMorris. Vance took over the business 10 years before when hisfather had a heart attack and died. Fresh out of graduate schoolwhen his father died. He took over the business that he had knownwell much to the pleasure and keen eye of the workers. Vance madesome marketing changes that allowed for the growth of the companyand with the help of the employees brought the plant into itscurrent state. Vance had just gotten married the year before to ayoung Richmond artist he had met at one of his charity benefits. Hehad no heirs and no plans for succession as he was in hismid-thirties and had just gotten married. While Vance had cousinsin the area they were all professional people who knew nothingabout business or pork. The workers could only surmise that thecompany would be sold, but speculation as to whom it might be didnot include someone from out of the city.
Before the deal was announced publicly, John’swidow, Arleen, reported to the workers that a Chinese company,Shanghou (SHU), would be buying Pigs R US. Mrs. Morris assured theworkers that the SHU promised not to cut workers' wages andbenefits, and to keep the current management team in place. Shesaid that SHU also promised to keep Pork R US headquarters inRichmond. Arleen assured the workers that SHU promised that therewould be no changes for the first year and that almost everythingwould remain the same. From her talks with SHU, Arleen is a bitworried about future changes that SHU mayimplement.
SHU is a large manufacturer and distributor of foodand beverages with, headquarters in Hong Kong. Manufacturing plantsoperate in mainland China, and the company has additional officesin Europe and Australia. By acquiring the smaller, well-respectedPork R US, SHU aims to diversify and expand its consumer base byincluding tailor-made pork products globally to meet marketprojections of a customer upsurge in sustainable, non-beef meats inthe next decade. Given SHU’s current availability oftelecommunications software and hardware, the deployment of thePigs R US refrigeration trucks should not be an insurmountableissue.
Many PRU employees, especially the older workers andsome of the older managers, are dispirited about the acquisition,and anxious about working for foreigners, downsizing, lessface-to-face interaction, language differences, and more electronicsystems that are to be put in place. Some of the of the moreexperienced workers are considering a move or an early retirementdue to the ongoing rumors about the acquisition. To make mattersworse, recent news media have printed stories about tainted foodmade by other companies in China. Employees fear loss of productquality and damage to PRU’s reputation as well as the loss of thefamily southern culture that was their pride andjoy.
SHU has told PRU workers that for now, mostemployees will be retained. However, all employees will beevaluated, and reassigned to teams as the new flat structure is putin place. The new CEO is Harvard-educated Daniel Chinn. He supportsincreasing the company's competitive edge by discovering anddeveloping existing individual potential through groupcollaboration and team synergy. Ever since his days as a brilliant,hard-driving MBA student; he has been known to be an enthusiasticsupporter of job training and career growth. Like many of SHU’semployees, David is in his early thirties. He speaks four languagesand is ambitious, self-directed, tech-savvy, accustomed to workingremotely, and experienced with a culturally diverse staff. David iseager to make his newest acquisition a success. He wants to moveforward on the integration of "Pork R US’ workers into SHU becauseChinn believes they are the “greatest asset have a rich knowledgebase and experience can be tapped into to bring the companysuccess." Chinn is concerned about the mix of culture and how hisideas of incorporating artificial intelligence and more roboticsinto the manufacturing processes will be received by management andthe workers at the newly acquired plant.
Daniel Chinn is anxious to keep the “southernfamily” culture of Pigs R Us but at the same time wants to use themost modern of manufacturing techniques. He decided that the bestway to do this was to start a pilot change operation in thepackaging area to demonstrate to the workers the effectiveness oftechnology. He bought and set up for use 3D printers in thepackaging room. The printers were able to create reusable shippingmaterials and operate in conjunction with the product conveyor forfast and easy packaging. He brought in two trained 3D printeroperators from China to handle the work along with two robots thatwould move the package material and create shrink-wrapped palletsfor loading on to the trucks.
The current packaging department employs 5 workerson day shift and 3 newer workers on the night shift. All the dayshift workers are in their early fifties and have been working forPigs R Us all their lives. John Mellon, the lead line man,exemplifies the group. He is 53 years old. He has a family of threechildren most all are grown. One works in the business with him asthe manager of accounting department having gotten a college degreeunlike his father. John rarely travels out of state and has neverbeen abroad. He is not terribly familiar with technology. He has aSmart TV but his children have set it up for him to useNetflix.
When the new employees arrived, the packaging stafftried to get to know them but had little in common and found ithard to communicate with them. The new workers ate together atlunch and always with food they brought with them despite offers offood brought in by the older employees to show their “southernroots”. Things are strained between the groups because the olderemployees thought they were being snubbed and many are uncertain asto the customs and language unable to communicate their realfeelings. This all operated to create a schism among the workerswhich escalated into job performance and employment commitmentissues when the six-month results from the 3D/Robot pilot showedthe following success in favor of new technology.
Measurable Factors Day Shift | Standard | 3D Printing |
Cost | 5.56 | 5.01 |
Time | 2.36 | 2.69 |
Quality Control Problem Ratio (per 500units) | 1 | 8.75 |
Training Time (per hour) | 30 | 25 |
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 | 375,000 | 525,000 |
Measurable Factors Night Shift | Standard | 3D Printing |
Cost | 5.56 | 4.98 |
Time | 2.36 | 2.27 |
Quality Control Problem Ratio (per 500units) | 1 | 5.75 |
Training Time (per hour) | 30 | 25 |
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 | 375,000 | 645,000 |
The results showed such a marked process improvementwith the added benefit of creating materials that were sustainable.The immediate reaction among the older workers was fear for theirjobs. The new workers suddenly were the enemy. Chinn was pleasedwith the new process and indicated that the 3D printing approachwould be continued. The word of the decision spread among thefamilies in the company and the “southern family” culture was nowclosing ranks on the newcomers both in the packaging room and inthe other departments thus confirming their fears when news of thebuyout surfaced.
1. Write SWOT analysis
2. Write the current state of the company as supported by theSWOT and its relevance to the scenario.
3. Identifie the OD challenges in the case.
4. Recommend and describe the quantitative approach fordiagnosing the situation at Pinyin Foods.
