Submitted by: Submitted by pangkerry
Views: 796
Words: 1901
Pages: 8
Category: Business and Industry
Date Submitted: 05/02/2011 11:03 AM
1
THE PATTERSON OPERATION
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 $500 million annually.
At the mid-south 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 specifically
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 was to create additional shelf space
for Carrington’s products. In the stores these displays could be placed in
aisles or used as shelf extenders. Assembling the deals is essentially a jobshop
type process, and prior to last year, the “assembly room was located in a
part of the main plan 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, if a worker can do his job in less than the
standard time, he 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 for 8 hours plus 1 of the 2
hours saved. Thus, if the hourly pay rate were $8.50, the worker would earn
$76.50 for the day.
Problems with Section 10
The assembly of...