Campbell Soup Essay
The company’s objective is to enable business and operational success through integrated world class solutions and development by utilizing the organizational restructure of the Engineering and R&D departments. Having a centralized organization with a decentralized engineering department makes meeting the company objective quite difficult. Also, if the company’s objective does not align with the department specific objectives Campbell Soup is setting their selves up for failure. Sales and Marketing are concerned with increasing market share and gaining profit, while the Plants are worried about operational performance, and Engineering is focused on individual parts of the system.
In order to have a successful company objective each department must be working towards the same goal. For example, if the plants are measured based on operating results and performance, when launching a new product line we have to be flexible and put in different performance metrics and set a glide path with a specific timeline. Competing on consistent quality, time/availability (want to be the first) (want to always have it on the shelves), [ARE THEY COMPETING ON PRICE? Having a reasonable price, can’t be an expensive product but people are willing to pay a premium price?] Specific Problem Defined
Currently after quite a few years of product development Plastigon is still in the process improvement stage and is not a finished program. The project team is facing difficulties involving people, processes, data, and systems. There is not a clear line of responsibility and ownership for people at the individual and group level. The development team for the Plastigon line was decentralized over the P3 and has suffered a high turnover rate of its developers. If engineers were leaving the company or project because of the amount of travel required the correct engineers were not selected for the project, or the scope of the project was not clearly defined. The knowledge that the individuals on the project possess is one of the most valuable resources, especially during the product development phase.
Project management at Campbell is not a clear, identified, well-connected end to end standard process. The data collected and analyzed throughout the program could not be trusted because there were no steps in place to ensure reliability. For example, testing the production line with water instead of the actual product gives the firm inaccurate results. There are large discrepancies in the viscosity of soup and water, and the issues you run into will be completely different. If the regulations and procedures are put in place so that test products are not shipped to customers by mistake, test products can be labeled as such. A reevaluation of what regulations are necessary needs to take place for the firm to be able to grow. It didn’t seem as though costs were allocated in standard process.
The systems that are put in place need to enable people, processes and data to work for the organization. If Campbell had the right tools and methods in place to support the work that occurs in the organization, the Plastigon line would have been up and running. They had this problem because they are not familiar with how to launching a completely brand new product line. This is outside of their comfort zone and therefore it has effectively stalled the product line due to lack of interest, conflicting interests, decentralized teams, and engineering issues. Individuals were not working cross-functionally but instead they focused heavily on their specific issues instead of the overarching strategic goal. There were several communication issues between different departments because there was not a shared vision. Problems – Not having meetings. Plants not being involved.
There isn’t any real data analysis in this case. We analyzed the data to prove significance in the other sections.
2. What should Elsner do about Plastigon?
Elsner has a few options available to him
Continue the current development plan that his predecessors have started Scrap Plastigon and move towards a container that imitates proven microwaveable products Centralize the current development plan and roll out the Plastigon line. 2. Each of these options has their pro’s and con’s.
Continuing current development as planned has proven to be costly and slow, but is the most obvious route. Scrapping Plastigon will most likely guarantee a successful microwaveable container, but will prove to be unpopular due to the substantial investment in Plastigon. Centralizing the development is the “middle option” allowing Elsner to have a more focused approach on the existing plan. This could cause more issues within Campbell because of their decentralized development teams though.
Campbell has already committed a large amount of human and financial capital, $10M, into developing the Plastigon production line. They want a return on their investment. Although they have lost the first mover advantage to other companies that have entered with shelf-stable microwavable products they still have a superior product and they can steal market share from them. Since they had a radical innovation if they came to market with a less than perfect product they would have been allowed to make changes in the future to improve on their initial product. Their strong quality reputation would not have been ruined. They need to have a batch process for this production line. The beginning of the process will be a flow shop where are the standard processes are performed but then it will be a job shop towards the end of the process where we have the cooker and incubator. In order to compete with other firms they will need to have consistent quality, and finished good inventory.
The beginning of the process is the hardest because that is when toy have to program knowledge into the automated machinery but then your costs will go down because you have a low waged and narrow skilled workforce. Launch DRG now and work on Plastigon, do not fund any other programs. Right not the Plastigon margins are horrible, total cost per unit = $1.49-1.59 selling at whole price for $.85, they are not making any money. Need to reevaluate costs. 3. What can the firm learn from its experience with Plastigon?
1. Campbell’s current development process is outdated and unwieldy
2. Campbell’s competitors have more efficient product development and rollout processes
3. Campbell’s business structure (engineering, product roll out, manager incentives) is not geared towards developing the next generation of their products (disruptive technologies)
4. If Campbell is going to be competitive in future product lines it will need to restructure its company’s development process. 5. Campbell is vulnerable to new technologies taking market share away from it.
Big Problem- Beyond the case (long-term)
The Palastigon program can turn out to be beneficial to the Campbell Soup Company if they take the approach of levering the problems they were faced with during this period and turning them into company solutions, guidelines and safety nets. The project management process needs to be reevaluated and set process steps need to be put into place. Non-value added activities, like developing product lines without first piloting the process.
They need to have process owners or strategic project managers that are responsible for project results and integration between the cross-functional team. Process innovation improvement is a key takeaway. Revisit the current state process and identify areas for development. After this new product development initiatives will be easier to launch – Management and Engineering interface Problems can lead to streamlining an effective process for the future and result in potential solutions. Project management at the individual and group level.
Take the key learnings from this specific project and launch corporate wide initiatives and procedures, for effective and efficient project management.