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Campbell Soup Company

In: Business and Management

Submitted By jb843
Words 1375
Pages 6
Background:
Campbell Soup Company is a large food processing company headquartered in Camden,
NJ, whose product lines include soups, vegetable juices, spaghetti products, frozen dinners, and baked goods. With revenue of $4.5 Billion in 1987, Campbell’s soup division accounted for 35%
($1.6B) of this revenue and was an established market leader in the condensed and (canned) ready­to­serve (RTS) soup segments.
In response to demand for higher quality “convenience foods,” Campbell’s then CEO
Gordon McGovern responded by championing the
New Products and Markets division with preliminary emphasis on frozen entrees, but ultimately shifted focus to Microwaveable
“shelf­stable” soups. Since the
New Products and Market division’s revenue was estimated to increase from $650M to $3B by 1992, their internal strategy was to respond to this demand to maintain dominance in the soup market.
To accomplish this goal as well as improve overall company management, McGovern revamped technical capabilities in three areas: R&D, packaging, and engineering. The first step was the decentralization of manufacturing into five regional facilities to offer greater manufacturing flexibility. Research & Development was then subdivided into the Campbell
Institute for Research and Technology (CIRT) and the Containers and Capital Improvement
Division (CCID). CIRT focused on agriculture, process, and product development, while CCID’s focus was real estate, packaging, and engineering. Finally, processes were established for engineering programs and projects, from initial proposal through the stage where the manufacturing plant assumed responsibility (see Exhibit 4).
Parallel to reorganization and process implementation, Campbell began pursuing their
Microwaveable soups line in 1983 upon approval of a $10­million­dollar proposal to design and build the Plastigon production line. Customer surveys and focus groups helped Campbell hone in on desired packaging requirements including an easy open top, handles to prevent user injury, a
“table ready” appearance, and the ability to be microwaved.
Installation of the line began in the Maxton, North Carolina plant in 1984 and involved six distinct engineering systems. Over the next four years’ equipment was ordered, installed, and tested. By 1987 the production cycle had its first successful run (Exhibit 6), however there were still major obstacles to overcome. During the development of Plastigon, Campbell also delved into other microwaveable technologies, such as their DRG program, whose characteristics were similar to their competitor’s (Chef Boyardee/Hormel/Dial) microwaveable lines (pg. 10).
In early 1988, after four years of significant effort and resources were allocated to the
Plastigon program, the line was not running efficiently or fully functional. Gardner summarized several key program issues in a memo to Elsner, for example “the inability of the line to run as a complete system” and the engineers being “in each other’s way.” He recounts the design flaws with the filling equipment which created spillage leading to sealing problems.

Problem Statement:
The decentralization of Campbell’s business units inhibited the ability to implement new product development. The plants and employees were not incentivized to allocate their resources to developing an entirely new production line, such as Plastigon.
When McGovern decentralized the company to help the regional manufacturing centers become more self­sufficient in the early 1980’s, an unintended outcome was that the company­wide projects like Plastigon were not prioritized by the plants and therefore were not allocated sufficient resources
. For example, the engineers tasked with working on the project often found themselves “short of [the] support staff [needed] to run the line because the plant did not want to devote operators and management time” to an experimental project (pg. 7).
Other issues with Plastigon arose from a lack of communication within the firm as well as with the suppliers.
Each of the process engineers worked independently with suppliers to develop new equipment for their specific section of the line. The division of the project development resulted in the engineers not being present at the plant at coinciding times so that the production line typically could not be tested in it's entirety. he absence of a formal project manager allowed
T
for a lack of accountability and resulted in minimal communication between parties
. Employee sentiment was that “no one at the plant was really committed to the line” and that as the launch grew closer “they wanted to be less and less involved” (pg. 8). This caused many issues in developing and debugging the production line such as splashing from the filling equipment was affecting the container seals.
The communication with outside suppliers issue materialized itself when many of the “first of a kind” pieces of equipment were not delivered by the vendors exactly as promised (pg. 7).
However, the biggest problems faced by Campbell were caused by their lack of internal communication and a systematic approach to developing a new product line. Potential Solutions:
As vice president of engineering systems, Jim Elsner has several available options that would allow Campbell Soup Company to improve new product development:
● A localized project manager responsible for tracking a program from beginning to end, capable of holding every other member of the team accountable
○ Pro: This would avoid problems resulting from lack of communication
○ Con: internal turnover due to frequent relocation resulting in loss of momentum and information
● A centralized R&D division with dedicated resources
○ Pro: eliminates people being pulled in from other departments for input and having them work only a few hours a week per project, maintaining project timeline and focus. Reduced company travel time leading to retention of employees.
○ Cons: cost of reworking company organization while simultaneously dealing with current projects

● A more streamlined program validation process, cutting down on meetings and delayering
○ Pro: Shortens time to market
○ Con: Fewer opportunities for group collaboration and conceptualization
● Incentives for plant managers to allocate resources to experimental lines, to ensure delays in set­up are not due to lack of workforce or lack of involvement.
○ Pro: incentivizes knowledge sharing and cross training of employees
○ Con: difficulty in overcoming inertia and changing the entire company culture ● Safeguards for production tests to prevent shipping test products, allowing for full scale testing. Safeguards could include anything from locked loading bays to colored dye in the product to identify that it must not be shipped.
○ Pro: enables full scale testing of the entire production line
○ Con: immediate and localized solution; does not affect project management as a whole at Campbell Soup Company. Recommendation:
After close examination of the obstacles Campbell faced with Plastigon and analysis of potential solutions, it is recommended that Elsner centralize the research and development team and their resources. Eliminating the distance between functional groups of task forces erases the likelihood of frequently missed meetings and increases communication and accountability. (pg. 5)
Additionally, resources would be streamlined to individual project focuses as a whole rather than creating both directional and financial divides among sub­departments of engineers. (pg.8)
Plastigon, albeit not perfect in initial design and overall execution, proved invaluable for
Campbell’s small project and large program management. Elsner stated “what we do about
Plastigon could set a pattern for what we do with those larger issues.” (pg. 12) The disorganization of Plastigon’s management brought to light serious underlying issues with their approach towards managing development.
The resources of Plastigon were not allocated efficiently, which led to installation and operation delays. The sub­projects of Plastigon were scattered far apart rather than consolidating them so errors could be detected at the source. Their mismanagement came to fruition when the production line for Plastigon was unable to be tested in its entirety as a result of poor communication and planning. When executing a large program such as Plastigon, the entire company needs to support and be aware of the progress. Many of the concerns with the program were rooted in the disjoint between Campbell upper management, project engineers, and plant workers. Creating a centralized flow of information and research development will lead to greater transparency and facilitate more employee input. The greatest error Campbell made as a growing company was allowing physical expansion without accounting for project management evolution.
If they can re­engineer the way they approach project planning and company wide communication, then every mistake and success of Plastigon will be worthwhile.

MEMORANDUM

TO: JIM ELSNER
FROM:
Henri Aldorf, Joseph Bosso iane Dennis, Emily Murray
,
D
DATE:
3 SEPTEMBER 2015
SUBJECT: AMPBELL SOUP ­ PLASTIGON
C

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