HOMEWORK5 4
Respond to Classmates responses to discussion posts.
GIVE AN IN-TEXT CITATION AND REFERENCE WITH WEB ADDRESS TO SUPPORT YOUR STATEMENTS.
TOPIC#1 DO NOT RESPOND TO THE TOPIC, RESPOND TO CLASSMATES RESPONSES BELOW.
Learning Activity #1 – Theme 1 & 2
One of the long-term goals set out by the Biotech’s strategic team is to increase sales in North America by 15%. The short-term goal to accomplish this increase in sales is to create a sales campaign that targets the Canadian market where sales have been dropping off ever since Nestle foods has sought to enter the supplement market.
One short-term goal that has come from the plan to increase sales is a contract with Walmart Canada to sell private labeled protein bars for Biotech. Walmart is known for getting the cheapest product they can because of the volume they sell. The contract would provide for 300 million bars every 3 months at a 2-cent reduction in price per bar. The first bars would be delivered to stores in two months. Production for protein bars in the Canadian plant is headed by Maurice Chevalier. He looks over the contract specifications and begins to set out goals and objectives that he would need to meet the order. There are three problems the order has:
· To make the required profit margin of 3 cents per bar, costs have to be cut by 1.5%;
· Recent supplies for the products have increased 1 cent because of a recent increase of shipping costs on Whey supplies from the US Chicago supplier;
· Three new full-time line employees would have to be retained from the seasonal hiring in October. Although this is often how line staff are hired, the retention would not increase the budget but will affect the staffing schedules.
Write an email to the Operations Vice President outlining the goals and objectives Chevalier could use to organize the production line to meet the contract needs while still maintaining the 3-cent profit for Biotech. Be sure to explain why you have listed the ideas as goals or objectives. DO NOT RESPOND TO TOPIC!!!!!!
CLASSMATE #1 TOPIC #1
From: Maurice Chevalier
To: Operations Vice President- John Scott
Subject: Goals and Objectives for Production Line
John Scott,
I am writing you today with the goals and objections to organize the production line to meet the contract needs with Canadian Walmart. To maintain our long-term goals of increasing sales in North America and increasing sales to Canadian Walmart, we must have short-term goals that need to be accomplished in 2 months of:
-Cutting costs by 1.5%
-Be mindful that our suppliers have increased prices by $0.01 per unit because of an increase in Whey
-We must retain 3 full-time employees which will not affect the budget but can cause scheduling issues.
To do this I have come up with some objectives to reach at different stages. We need to start with creating a team to research where we can cut costs whether it be in the products wrapping, the ingredients, or energy savings options. This needs to happen within 2 weeks max because we will need time if we have to move to a different supplier. There are 3 options with the increase in Whey and that is to look for a new supplier, see if one of our other sister companies can ship for a cheaper price, or maintain this Whey product and increase the cutting costs to allow for the increase. This also needs a small team to research within 2 weeks the most cost-effective way, while maintaining the quality of the product. The last short-term goal needs a well-organized team in the scheduling department to be able to schedule around the new retained employees, and this needs to be accomplished in 1 week. With these three short-term goals in line, it will help us achieve our long-term goal of getting a large business buyer from Walmart Canada. Please e-mail me back with any questions and concerns. Thank you.
Maurice Chevalier
CLASSMATE #2 TOPIC #1
To: Operations Vice-President
From: Maurice Chevalier
Subject: Organization plan to meet profit margin
Mrs. Vice President,
While striving to meet Biotech’s goal of increasing sales via a Walmart contract it been made aware than an organizational outline is necessary in order to meet the contract specifications. The current order has some complications that need to be addressed:
-to meet the required profit margin, costs have to be cut by 1.5%
-supplies for products have increased due to recent increase in shipping costs
-three additional full-time line employees must be retained causing issues with the affected staffing schedules
The proper organization and alignment of people and resources will allow Biotech to meet the contract needs in conjunction with maintaining the 3-cent profit margin. In order to cut costs by 1.5% Biotech needs to make a functional structure the overall goal rather than the current divisional structure. The functional structure focuses on developing highly efficient and specific divisions that perform specialized tasks (Factors to Consider in Organizational Design, n.d). This type of structure will promote the production of Biotech’s products at the lowest possible cost and highest speed. This shift to a function structure will allow Biotech to meet the profit margin due to improved and streamlined production processes and organizing employees into specializations for maximum efficiency. The second objective is to delegate an employee to research and assess the shipping market to determine if our current suppliers price increase is acceptable or if we need to look into moving our business to a more cost effective supplier. This needs to be completed as soon as possible. Lastly, in order to retain three additional employees and manage staffing schedules Biotech must delegate a HR professional to manage staff placements and ensure projects have adequate staffing as well as appropriate scheduling. This will reduce the possibility of scheduling conflict as well as improving project productivity as all will be closely monitored. The implementation of the following goals and objectives will ensure the production line contract is met while still maintaining the 3-cent profit. Any questions or concerns can be directed into my e-mail detailed below.
Very respectfully,
Maurice Chevalier
Mauricechevalier@email.com
References
Factors to Consider in Organizational Design. (n.d). Types of organizational structures. Lumen Learning. Retrieved from https://courses.lumenlearning.com/boundless-management/chapter/factors-to-consider-in-organizational-design/
Learning Activity #2
In the sourcing of products Chevalier found a potential product that would be great in terms of costs but the quality was not quite up to Biotech standards. The product meet about 85% of the standards so it is not quite there. How would Biotech’s culture play into Chevalier’s decision? DO NOT RESPOND TO TOPIC!!!!!!
CLASSMATE #1 ACTIVITY #2
Biotech’s mission statement is to develop products that are safe, effective, affordable, and natural with the customer’s health as their primary goal (company profile). While this product is said to meet 85% of the standards it is important that the other 15% that does not meet the standards be disclosed. Biotech would not want to manufacture a product that was not up to their existing standards. Doing so could also jeopardize their reputation. However, cost is always a concern in business and discounting the potential product would not be smart. Biotech should take the time to research this product more closely and determine the impact of the 15% that is lacking has on the product and consumer. There could be a way for more development to take place in order to bring the product up to existing company standards. Another alternative would be to create a trial line of the product to see how it is received by consumers.
References:
Biotech Health and Life Products Company Profile. Document posted in University of Maryland University College BMGT 364 6393 online classroom, archived at http://campus.umuc.edu.
CLASSMATE #2 ACTIVITY #2
Biotech’s vision and mission statement:
Current Mission: To develop products that are safe, effective, affordable and natural with the customer’s health always their primary goal.
Current Company Vision: To help provide everyone with the healthiest life possible in the most natural of ways.
Based on this information alone it is easy to see that the decision to go with a company that does not meet the high quality standards held by Biotech would not go over well with company leadership or their current culture; however, this does not mean that Chevalier should completely forget about the company. An article by Paul Simister on the bargaining power between buyer and seller highlights key factors in determining who holds more power in negotiations (Simister, 2011). If Biotech as the ability to offer different incentives or has elevated buying power due to volume they may be able to dictate quality standers that fall in line with their company vision and mission. The company under consideration may be inclined to reduce it’s profit margin due to increased volume, which could make up for losses. In the end, if Chevalier does not have other options in the price range or able to meet their requirements the company will have to find ways to incentivize source companies to increase quality or expect lower margins.
Resources:
Simister, Paul (08 October 2011). Bargaining Power of Buyers or Customers. Retrieved on 06 Feb 2018. Retrieved from: http://www.differentiateyourbusiness.co.uk/bargaining-power-of-buyers-or-customers
