Case Analysis Bayonne Packaging Inc

Running head: BUSINESS 1
Case Analysis Bayonne Packaging Inc.
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BUSINESS 2
Case Analysis Bayonne Packaging Inc.
Bayonne Packaging Inc. is an organization that produces paper packages for its clients.
The organization has experienced continuous growth between 1982 and 2001 where its sales
were 10 and 32 million dollars respectively (Shapiro & Morrison, 2012). Later the organization
is faced with challenges as a result of the dot-com bubble. Despite the organization remaining
competitive through its sales, it has experienced numerous complaints concerning the late
delivery and quality of the products. The organization hires a new operations manager who is
tasked with the role of handling the organization’s cost, quality and delivery issues. The paper
will look at Bayonne Packaging Inc. to analyze its competitive priorities, problems, current
capacity utilization in work centers, factors contributing to the decline in financial performance
and recommendations to the organization’s president.
Competitive Priorities
Bayonne Packaging Inc. has remained competitive over time due to the design of its
products. They are beautiful, classy and well invented. The organization is also in a position to
design customized packaging products for its customers such as gifts. They also work with
clients to design products as per their needs.
Bayonne Packaging Inc. key competitive priority is diversification. Diversification
ensures that the organization keeps inventing new products that will match the demands of the
customers at the time. At the wake of the dot-com bubble, the organization diversified into new
markets. After realizing that there was a change in the market demand, the organization opted to
diversify into new markets and suit the new demands. It was able to apply innovative ideas to
change the package design.
BUSINESS 3
The organization has been able to come up with innovative packaging solutions for their
clients. Innovation increases competitiveness and sustainable growth (Simonova, Lyapina,
Kovanova & Sibirskaya, 2017). The organization has been able to fold and glue various complex
products or their customers. It is an indicator that the organization’s prioritizes serving its
customers and ensuring that their needs are met as they expect. It ensures that the organization
remains competitive over time.
Problems Facing the Organization
The number of packaging materials rejected by clients has been on the increase. It is
mostly due to quality issues as some materials are excessively glued while others have no glue at
all. The concern has resulted to an increase in the number of commodities that are rejected. In
2011, the quality assurance noted that 6% of the total products offered were rejected (Shapiro &
Morrison, 2012).
The organization is also affected by the problem of poor communication between the
various departments. The issue is caused by the various departmental managers who arrive at
their own decisions without considering the impacts that they will have on other departments.
Due to the individual decision-making, the organization is not in a position to meet the needs of
the client such as delivery and quality concerns.
The organization is also faced by the problem of late delivery. The late deliveries are as a
result of scheduling by the managers. Some managers of some departments do not utilize
scheduling for their work. It leads to lateness in moving a product to the next department. If the
deadline is changed, it makes it difficult to deliver on time. The client receives the commodities
late, which affects the reputation of the organization.
Capacity Utilization in Various Work Centers
BUSINESS 4
Organizations conduct capacity utilization for self-appraisal and establish ways in which
it can evaluate its present performance (Nyaoga, Wang & Magutu, 2015). Capacity utilization is
the percentage of the total working hours over the scheduled hours. Therefore,
Total working hours

Capacity Utilization= ∗100 %
Scheduled hours
Composition
The unit has one machine.
255
∗100 %=73.5 %
375
Jagenburg Sheeter
The unit has one machine.
279
∗100 %=80.4 %
347
Heidelberg Press
The unit has 2 machines.
696
∗100 %=100.3 %
692
Bobst Die-Cut
The unit has two machines.
544
∗100 %=78.4 %
694
Int. Royal
The unit has three machines.
468
∗100 %=45.0 %
1041
Int. Staude
BUSINESS 5
The unit has four machines.
716
∗100 %=51.6 %
1388
Int. 3A Window
The unit has two machines.
290
∗100 %=41.8 %
694
Bayonne’s Performance Problems
The organization has been realizing increased sales for quite some time. However, in
2001, the organization made its first loss. The performance problems are a reflection of the
quality and delivery complains raised by the clients.
The financial performance decline is as a result of inadequate capacity to deal with
variability. The organization is experiencing variability based on the type of order and delivery
time. Despite the organization performing to its full capacity, there is no cushion to handle the
variability that results from client’s orders. This may lead to cancelation or rejection of orders
placed by clients.
Ineffective communication may also be the reason for the financial decline in the
organization. The communication between the departments as well as with the customers is
ineffective. It results to late production and delivery of commodities. The client may end up
cancelling the order, which is a loss to the organization.
Quality is also another factor, which is contributing to the decline in financial
performance. The organization has had quality concerns with some of the products being under
or over glued. Whenever clients receive poor quality products, they are most like going to reject
them. Every time a product is rejected, it is a loss to the organization.
BUSINESS 6
Recommendations
I would make short, medium and long-term recommendations to Dave Rand, the
president of Bayonne Packaging Inc. For the short-term, I would recommend that they increase
personnel capacity to improve quality. They would also have to prioritize their orders to evaluate
the consequences that rush orders will have on the other remaining orders. On the medium term,
I would recommend an improved management of variability. It will lead to an improvement in
the management of demand. I would also recommend improvement in interdepartmental
communication. For example, there may be an introduction of an order jacket where a report is
sent to other departments when the predecessor department starts working on a specific order.
The other departments get to understand the number of orders to expect in the coming days. In
the long-run, I would recommend that the organization increases its capacity through investing in
additional equipment. The organization will also need to invest in an improved computerized
order scheduling system that will guide all departments.
In conclusion, Bayonne Packaging Inc. is experiencing concerns as a result of quality and
lateness in delivery. The concerns have led to the organization’s decline in financial performance.
The organization incurs losses due to rejection and cancelation of orders. To handle this, the
organization needs to increase capacity and improve communication between departments.
BUSINESS 7
References
Nyaoga, R. B., Wang, M., & Magutu, P. O. (2015). The relationship between capacity utilization
and value chain performance: Evidence from Kenyan tea processing firms. African
Journal of Business Management, 9(9), 402-411.
Shapiro, R., D. & Morrison P., E. (2012). Bayonne Packaging, Inc.
Simonova, E. V., Lyapina, I. R., Kovanova, E. S., & Sibirskaya, E. V. (2017). Characteristics of
interaction between small innovational and large business for the purpose of increase of
their competitiveness. In Russia and the European Union (pp. 407-413). Springer, Cham.
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Running head: BUSINESS 1

Case Analysis Bayonne Packaging Inc.

Case Analysis Bayonne Packaging Inc.

and recommendations to the organization’s president.

clients to design products as per their needs.

Bayonne Packaging Inc. key competitive priority is diversification. Diversification

change the package design.

clients. Innovation increases competitiveness and sustainable growth (Simonova, Lyapina,

remains competitive over time.

Problems Facing the Organization

the client such as delivery and quality concerns.

late, which affects the reputation of the organization.

Capacity Utilization in Various Work Centers

Total working hours

The unit has one machine.

The unit has one machine.

The unit has 2 machines.

The unit has two machines.

The unit has three machines.

The unit has four machines.

The unit has two machines.

Bayonne’s Performance Problems

quality and delivery complains raised by the clients.

The financial performance decline is as a result of inadequate capacity to deal with

cancelling the order, which is a loss to the organization.

Quality is also another factor, which is contributing to the decline in financial

them. Every time a product is rejected, it is a loss to the organization.

I would recommend an improved management of variability. It will lead to an improvement in

the management of demand. I would also recommend improvement in interdepartmental

order scheduling system that will guide all departments.

In conclusion, Bayonne Packaging Inc. is experiencing concerns as a result of quality and

organization needs to increase capacity and improve communication between departments.

Journal of Business Management, 9(9), 402-411.

Shapiro, R., D. & Morrison P., E. (2012). Bayonne Packaging, Inc.

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