CASE STUDY 1

Turnaround at the Preston Plant

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Executive Summary

This report has analyzed the Preston Plant’s case of revival from the devastating crises. The

report has found two major changes that had to lead the revival. These changes were the

acquisition of the Plant by Rendall Corporation and the solving of the quality issues. The plant

has survived by adopting different strategies e.g. employees engagement in decision-making and

control process chart analysis on daily basis. However, the company should ensure these changes

through long-term commitments.

Introduction

The organization in the case study is the Preston plant which was a medium-sized company,

located in Preston, Vancouver. It was previously owned by Georgetown Corporation but in the

year 2000, it was bought by Rendall. The plant’s major product was the production of Precision

coated papers. Its major client was HP. However, since 1998, the operations management team

of the plant started to experience an issue in the quality of ink-jet printer papers production by

HP. The purpose of this report is to analyze the splendid turnaround of Preston Plant from the

devastating crisis. The scope of this report is limited to the present case study’s operational

strategies to overcome this issue and it does not give any general solution to every production

plant for the same products because situations for every operation are different depending upon

operational procedures, culture, and management policies, etc. This report has deeply analyzed

the adoption of quality-based principles to overcome the crises events, the process followed by

the plant, impacts of controlling the plant’s processes, and ensuring quality through the SPC

technique. However, the point to ponder is the appointment of Tom Branton as COO.
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Plant’s Survival through Adoption of Quality-based Principles

Two significant events happened in the year 2000 which played a crucial role in the plant’s

survival. The first event was the purchase of the plant by Rendall Corporation despite the

knowledge that the plant was losing $2 million annually at that time. Rendall aimed to obtain the

Viper contract from HP which the previous management had lost. The second event was the

negligence of Preston Plant’s management for the complaints about quality for ink-jet printers

papers until HP raised the issue after several months of monitoring this problem. On HP’s

complaint, Plant’s management responded and make some recommendations e.g. changes in

shutdown rules, but it didn’t work because the production was continuously declining as the

major client HP was dissatisfied even making the changes.

Control over the Plant’s Processes

The operations management team of Preston Plant had come up with a new approach to control

the plant’s processes. Firstly, every production team made bound to review the control chart

continuously on daily basis. The second control measure was to ensure the monthly meeting with

every team from production planning to management level to analyze the changes being

introduced. In this meeting, workers were taken away from the plant’s site to a place where they

can share their experiences and the data on a control chart. Thirdly, the first shift operators were

invited to discuss the quality issues and the data chart. Through these measures, Preston Plant’s

management had managed the knowledge, improved the production process and efficiency

which regained its lost reputation in the market.

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Results of gaining Control on Processes

The results of gaining control over the processes cost reduction, new product development, staff

retention, and most importantly the improvement in suppliers relationships development. These

positive results were gained when the company improved in three areas which were acquiring,

sharing, and processing the information which made the process efficient and faster. These

changes were also directly linked to efficient knowledge management which helped the company

in improving the decision-making (Abualooush and Masa’deh, 2018). Also, staff retention was

made possible by allowing them to access the higher management.

Gaining control over the processes has further given confidence to the leadership to develop

relationships with internal and external stakeholders including the suppliers. Therefore, the

company developed short-term and long-term strategies to develop a relationship with its

suppliers. Hence, gaining control over the processes energized the company to harmonize its

actions and timely decisions were accelerated towards cost-effectiveness and new products

development.

SPC Technique and Link to Plant’s Strategic Benefits

SPC or Statistical Process Control is an operational level technique that is used to control and

measure the quality in a manufacturing process. In more precise words, SPC ensures quality

during a production process (Lim, Antony and Albliwi, 2014). In the present case study of

Preston Plant, the benefits which can be categorized as strategic are reputational improvement

and the organization’s ability to not only retain its present employees but to attract other

employees. More employees were attracted by adopting different strategies. Firs one was giving

them a cooperative and supportive environment in which they feel that they are a part of this
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organization by allowing them in taking part in the decision-making process which was

previously not practiced by the management. Further steps which the company had taken in this

regard were providing the employees a productive environment where they feel no fear and also

they were deprived of the threat that they would be fired if the company faces a surge same as it

had faced previously. These strategies aimed to empower the employees to remain productive

and efficient. The company’s reputation was further gained by focusing on developing a habit to

listen to the company’s internal and external stakeholders. This strategic move was made to

detect any emerging trends and to make sure the quality by introducing innovation by analyzing

the feedback from these sources.

Conclusion and Recommendation

It has been concluded from the above analysis that Preston Plant’s crises had become clear when

customers raised the quality issues. Even the customers were aware of the crises but the plant’s

management was remained in dilemma and failed in applying the right measures to deal with

crises. However, control over the processes was the right measure which the management

adopted and the issue resolved. However, as an Operations Management expert, the following

recommendations can be given to retaining in the competition.

 The company should make long-term commitments to ensure the quality

 Mass inspection should be avoided and purchase decisions should be made by

considering factors other than the price e.g. demand, quality, and supply, etc.

 Employees should be given quality training because it is the need of the hour now

 Workplace fears e.g. accountability and timing issues of employees should remain soft
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 The organizational environment should be conducive to getting maximum output from

the employees by empowering them through rewards and incentives etc.

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References

Abualooush, shadi habis and Masa’deh, R. (2018) ‘The Role of Knowledge Management

Process and Intellectual Capital as Intermediary Variables between Knowledge

Management Infrastructure and Organization Performance’, Interdisciplinary Journal of

Information, 13(65), pp. 279–309.

Lim, S. A. H., Antony, J. and Albliwi, S. (2014) ‘StatisticalProcess Control(SPC) in the

foodindustry e Asystematic reviewand future researchagenda’, Trends in Food Science &

Technology, 37(12), pp. 137–151.