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The Preston Plant Problem Case Case Study

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Updated: Jun 3rd, 2020

The story of survival of Preston plant started in 1998 when Preston plant’s major client for printing papers, Hewlett-Packard (HP), pointed out some problems experienced while using paper from Preston plant in dry conditions. A team at Preston plant worked hard for around seven months trying to solve the issue and in October 1999, the team came up with suggestions on a formulation that would produce enhanced coating. In 2000, production levels deteriorated forcing the management team to hasten the speed of the plant to raise productivity. However, the management team was not keen on the quality of products as long as they met specifications.

Two more happenings took place in 2000. Hewlett-Packard invited Preston Plant to tender bids for an agreement to supply vector project materials, an agreement that would grant Preston plant such orders for several years. Secondly, Rendall acquired Preston plant after finding out that Preston plant operated at a loss. In June 2000, HP expressed their discontent because of Preston plant’s lack of control concerning production.

Consequently, the management team at Preston plant executed new rules that gave operators rights to shut lines down if quality was not up to standard. In addition, the management team effected changes concerning communication to match the new rules. The management team set daily meetings for all staff members to review control information. In addition, the whole team would meet once in a month outside the plant for debating control data.

Such meetings led to positive developments at Preston plant including enhanced controls, improved quality and change of attitude by employees. Unfortunately, in September 2000, Hewlett-Packard denied Preston plant the vector contract due to quality issues. Rendall reached a decision to shut the plant down but the management team convinced him that Preston plant was still viable though some drastic measures were necessary. Such measures included cutting down on operating expenses through retrenching employees and coming up with an ideal plant as well as establishing new concepts for products to enhance confidence in sales.

Lastly, things changed for Preston plant by December 2000 when Preston plant realized profits, which made their former client, Hewlett-Packard, notice them. As such, Hewlett-Packard requested Preston plant to bid for a new product. Preston plant received the order from Hewlett-Packard in April 2000.

Controlling of process led to improved quality, energetic staff members with changed attitude towards work, and improved efficiency at the plant.

Statistical process control refers to use of statistical procedures to locate and control causes of variation in a particular process. It is historical in nature as it involves keeping records of previous trends and comparing them with current trends. At Preston plant, statistical process control led to various strategic changes. One, cost reduction strategy emerged from statistical process control, which included bringing down the number of employees as well as other operating costs. The management team believed that a bloated work force was responsible for variations in the process and reducing the number would prevent such variations and increase efficiency. Secondly, statistical control process led to diversification of products to come up with such a product as ‘protowrap’. Recycling of protowrap would minimize losses at the plant. Making the product would be technically hard but with newly acquired skills, Preston plant would manufacture protowrap in an economical way.

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