The purpose of this project is to analyze the current situation, and makes specific recommendations based on what you have learned in this class with the overall objective to fix the problems and get the “Portland Plant” back on track for profitability.
The goals of this paper are to:
• Demonstrate a clear application of the knowledge gained in class, readings and experiences.
• Challenge your innovativeness and ability to visualize the operations of a company.
• Encourage exploration outside of lecture and text for relevant facts, information and ideas.
Expectations for the project:
• Clearly written & professionally prepared
• Innovative thoughts
• Realistic inputs, assumptions, and strategies
. Introduction – Include the root problem using “why-why” analysis.
“The purpose of this paper is to….. by ……with recommendations……”
II. Analysis – include points below
• Operations Strategy and Performance
o Time-line, observations, and assumptions
o Performance Objectives; identify and discuss top performance objectives and include the Polar representation as a visual
• Operations Design
o Identify & Describe “Process Type”, and Inputs & Outputs
o Map the process
o Clearly state Core Competency and explain your choice
o Discuss and agree on optimal forecast method
o Design Process layout and suggest appropriate technology
o Identify organization Type, and include the role of cross-functional teams
• Planning and Control
o Document and explain “Drum, Buffer, Rope”
o Select and justify best production approach (push vs. pull)
o Recommend and justify optimal inventory approach; include verification process
o Develop quality approach; suggest tools to manage, measure, and assess quality
o Write CSR statement and discuss the commitment to sustainable goals, the quality of life of the workforce, and the needs of stakeholders – [Our Vision is to….]
III. Conclusion & Recommendation
D: Project Case Scenario
TURNROUND AT THE PORTLAND PLANT
“Before the crisis the quality department was just for looks, we certainly weren’t used much for
problem solving, the most we did was inspection. Data from the quality department was brought to the
production meeting and they would all look at it, but no one was looking behind it”. (Quality Manager,
The Portland plant of Rexam Graphics was located in Portland, Oregon, across the continent from their
headquarters in Massachusetts. The plant had been bought from the James River Corporation by Rexam
in March 1998. Precision coated papers for ink-jet printers accounted for the majority of the plant’s output,
especially paper for specialist uses. Ink-jet products had a particularly tighter production specification,
especially in terms of coat weight variation. The plant’s process technology consisted of coating machines
that allowed precise coatings to be applied. After coating, the conversion department slit and then cut the
coated rolls to shape.
The curl problem
In late 1996 Hewlett Packard (the plant’s main customer for ink-jet paper) informed the plant of some
problems it had encountered with paper curling under conditions of low humidity. There had been no
customer complaints to HP, but their own personnel had noticed the problem. Nevertheless HP took the
curl problem seriously. Over the next seven or eight months a team at the plant worked on a series of
design experiments to try and isolate the cause of the problem. Finally, in October of 1997 the team made
recommendations for a revised and considerably improved coating formulation. By January 1998 the
process was producing product that HP regarded as acceptable. However, 1997 had not been a good
year for the plant. Although sales were reasonably buoyant the plant was making a loss of around $1
million for the year. In October 97, Tom Bickford, previously account manager for the Hewlett Packard
business, was appointed as Managing Director.
Slipping out of control
By spring of 1998 the curl project was completed. Nevertheless, productivity, scrap and re-work levels
were poor. In response to this the operations management team increased the speed of the line and
made a number of changes to operating practice in order to raise productivity.
“Looking back, changes were made without any proper discipline, there was no real concept of control
and the process was allowed to drift. The perception was that we were always meeting specification.
Yet we didn’t fully understand how close we really were to not being able to make it. The culture here
said, “If it’s within specification then it’s OK” and we were very diligent in making sure that the product
which was shipped was in specification. However, Hewlett Packard gets ‘process data’ which enables
them to see more or less exactly what is happening right inside your operation. Of course we were
also getting all the reports but none of them were being internalized. We were using them just to
satisfy outsiders. By contrast, HP have very much a statistical and technical mentality which says to
itself, “You might be capable of making this product but we are thinking two or three product
1 Case reproduced with the permission of Dr. Nigel Slack, Warwick College, where the case originated, 2007.
generations forward and asking ourselves, will you have the capability then, and do we want to invest
in this relationship for the future?” (Tom Bickford)
The spring of 1998 also saw two significant events. First, Hewlett Packard asked the plant to carry out
preliminary work for a new paper to supply the next generation of HP ink-jet platform, known as the Viper
project. If won, the Viper contract would secure healthy orders for the next two or three years. The second
event was that the plant was acquired by Rexam.
“What did Rexam see when they bought us? They saw a small plant on the West Coast of America
losing lots of money”. (Finance Manager, Portland Plant)
Indeed Rexam were not over impressed by what they found at the Portland plant. It had been making a
loss for at least two years and had only just escaped from incurring a major customer’s disapproval over
the curl issue. They made it clear that, if the plant did not get the Viper contract, its future looked bleak.
The plant’s engineers fully understood the importance of Viper and were working hard to develop the new
product. Meanwhile, out in the plant, the chief concern continued to be centered around productivity
issues. But also, once again, Hewlett Packard were starting to make occasional complaints to the plant’s
operations management about quality levels. However HP’s attitude caused some bewilderment to the
operations management team.
“When HP asked questions about our process the operations guys would say, “Look we’re making roll
after roll of paper, it’s within specification (as seen in Exhibit 1) and we’ve got 97 per cent up-time.
What’s the problem?” (Quality Manager, Portland Plant)
But it was not until summer that the full extent of Hewlett Packard’s disquiet was made clear to the plant’s
“The key milestone date for me, and I will never forget it, was in June of ‘98. I was at a meeting with
HP in Chicago. It was not even about quality. But during the meeting one of their engineers handed
me some SPC run data. This was data that we had to supply with every batch of product, and said
“Here’s your latest run data. We think you’re out of control and you don’t know that you’re out of
control and we think that HP is looking at this data more than you are.” He was absolutely right and
there was nothing I could say except that we would do something about it. This was when I fully
understood how serious the position was. We had our most important customer telling us we couldn’t
run our processes just at the time we were trying to persuade them to give us the Viper contract”. (Tom
“At one point in May of ‘98 we had to throw away 64 jumbo rolls of out-of-specification product. That’s
over $100,000 of product scrapped in one run. Basically that was because they had been afraid to
shut the line down. If they failed to keep the machines running we would flog them and say, “You’ve
got to keep productivity up”. If they kept the machines running but had quality problems as a result, we
flogged them for making garbage. Now you get into far more trouble for violating process procedures
than you do for not meeting productivity targets”. (Engineer, Portland Plant)
Returning from the Chicago meeting Tom immediately set about the task of bringing the plant back under
control. Knowing that you had taken an operations management class, Tom asked for your help to help
identify problem areas and make recommendations to fix the problems.
Typical process control charts
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