The Patterson Operation

In: Business and Management

Submitted By penyapol
Words 1978
Pages 8
THE PATTERSON OPERATION1
Background
Carrington, Inc. is an international company engaged in the production and
distribution of pharmaceuticals, proprietary drugs, and cosmetics and toiletries.
In its worldwide operations, Carrington employs over 15,000 people and has
sales of over $500M annually.
At the midsouth plant of Carrington, Inc. management was faced with problems
of low productivity, low employee morale, and high unit costs in the section
responsible for the assembly of various kinds of packages containing
assortments of different products made by the company. These “prepaks,” or
“deals,” as they are referred to within the organization, are specially prepared to
the specifications of the individual customer. Each package may contain from 24
to 480 items, and the total number of packages for a customer may range from
10 to 1500 units. Most of these packages are prepared in such a way that the
retailer can set them up as freestanding, point-of-sale promotional displays.
From Carrington’s standpoint, the objective of using these product displays could
be placed in aisles or used as shelf extenders. Assembling the deals is
essentially a job-shop type process and prior to last year, the “assembly room”
was located in a part of the main plant known as Section 10.
The employees in Carrington’s manufacturing and assembly operations are
unionized, and the firm uses a Halsey 50-50 Incentive Plan, a time-saved bonus
plan. Under the Halsey Plan, a worker who can do her or his job in less than the
standard time receives a bonus of 50 percent of the hourly wage rate multiplied
by the time saved. For example, an employee who completed 10 standard hours
of work in 8 hours would be paid 8 hours plus 1 of the 2 hours saved. Thus, if
the hourly pay rate is $8.50, the worker would earn $76.50 for the day.
PROBLEMS WITH SECTION 10
The assembly of…...

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