Operations Management at Turnaround at the Portland Plant

- Turnaround at the Portland Plant

Operations management is a key element in the overall success of the Portland plant of Rexam Graphics. Each task, issue and decision made from an operations perspective, builds on the foundation that defines the outcomes and results of the paper plant. The operation of the plant establishes and exposes the way the plant is judged by current and potential customers. As a producer of precision coated papers for ink-jet products, Rexam Graphics has to avoid poor operations decisions that from past experiences that have poorly affected the company. The core competency of Rexam's Portland plant is production of various types of specialty papers. Inefficiencies have surfaced including poor production decisions, low productivity, and most importantly, a weak management system. Cost efficiencies have been an issue including storage and inventory. The inefficiencies at the plant, particularly in operations management, the need for improvement is apparent. The purpose of this analysis is to illustrate the techniques and procedures that are needed for the plant to achieve the desired quality and production levels necessary for survival. The Portland Plant must seek ways to reduce costs and to increase productivity. By creating a plan that includes quality production, an inventory control system, cost improvements and a strong management team, Rexam Graphics can transform from a underperforming company to a top contributor in the field of paper production.

OPERATIONS STRATEGY & PERFORMANCE

The Portland plant of Rexam Graphics is facing the risk of permanent closure. There have been constant issues in production, that if continued, would result in the plant fully ceasing operations. Upkeep of the plant's operational components have not been maintained and this neglect is evident through the constant mechanical problems with machinery and technological issues arising from incorrect information being relayed to the equipment. For this analysis, our group has made the assumption that the existing management at the Portland plant has demonstrated serious judgment flaws regarding accountability for detrimental manufacturing processes and procedures and needs to be replaced. The lack of management experience and insight into process improvement methodology from the management group has also significantly contributed to a productivity dearth in plant production. From the materials presented to us, we have come to the conclusion that there are no processes or production line protocols in place in that ensure that proper procedure was followed nor that production was maintained at even the lowest acceptable standard deviations. Productivity deficiencies, coupled with the lack of monitoring the quality of the final product, have been key factors in the plant's failure thus far. Due to the lack of quality control the company has shipped subpar product to customers and Rexam's overall business reputation is on the line due to Portland.

Due to this group's assumption of poor management, if the Portland plant is to survive, a necessary management change must be made. If the existing management structure were to remain, the current management team would need to undergo considerable training regarding concrete business expectations. Regardless of terminating or retraining management, if an effective process and quality realignment plan is not implemented quickly the Portland plant would experience a greater benefit by permanently closing its Portland operations rather than undergoing increased legal liability and continued loss of reputation due to poor production quality. Another issue hindering the success of the plant is a disparity of clear guidance from the corporate executives of Rexam Graphics, whom have yet to deliver the Portland division any specific instructions or expectations concerning the plant's business plan and production objectives. Without clear objectives and measurable deliverables from Rexam headquarters, current management at the Portland office should not be solely blamed for the inefficiencies of the plant's operations.

Additionally another issue, which is not addressed within the text, is the financial management of the plant.. Rexam headquarters has not clearly designated a role at the Portland plant for which individual has the appropriate declaration of authority to act as the accountable financial officer nor included support staff. Without an appointed financial manager, the lack of maintaining appropriate accounting records could have detrimental results, particularly if Rexam is a publically traded company and is in clear violation of the Sarbanes Oxley (SoX) Act requirements for producing accurate financial records. Violation of SoX requirements could mean severe fines up to and including imprisonment of Rexam's executive officers, assuming that Portland is an operation within the United States. Even as a privately held organization, potential investors and shareholders are being deceived due to lackadaisical although not necessarily malicious accounting practices. Or group recommends that Rexam should hire an accountant or business manager for the Portland plant to manage day to day office operations. The office manager would handle all of the financial aspects of orders, supplies, rental agreements, invoices, payroll, etc. In an effort to avoid internal interference from the Portland plant, we suggest that Rexam headquarters appoint an external resource to oversee the financial and office operations of the plant. Our text did not mention two vital pieces to the success of the plant, without these integral success factors the plant would inevitably fail. 1. The continual maintenance, and monitoring of production machinery as well as any non-human production aids that assist in the production line combined with the process of creating the final good. 2. The people required to manage and maintain the facility, which would generally be the management team, but should be someone assigned specifically to the maintenance and replacement of production line machinery.

The top performance objectives should resonate with producing quality, cost-effective final products, developed to meet the customer's requirements, before or on the date in which the customer specified and the manufacturing partner agreed to. In other words the end product should conform to the Iron Triangle requirements: time, scope and budget. Being able to meet the performance objectives not only of the customers and upper management but ideally manage to and motivate employees makes each production line have that much more than a systematic application of mechanical parts. Management should strive to have heart, enthusiasm, and desire to deliver a quality product. A similar performance