Devry BSOP434 week 5 ilab

| August 13, 2017

Lab 5: Columbia Lumber Products Company

Note!

Submit your assignment to the Dropbox located on the silver tab at the top of this page.

(See the Syllabus section “Due Dates for Assignments & Exams” for due dates.)

Scenario/Summary

The Columbia Lumber Products Company (CLPC) was headquartered in
Portland, Oregon, where it had been founded in 1899. For many years, its
principal product had been only lumber; in the 1940s it began producing
plywood, and in 1960, particle board. The first two products, lumber
and plywood, were produced at various sites in Oregon, and marketed on
the West Coast and as far east as Chicago.

Particle board was produced in Duluth, Minnesota, at a plant built in
1962 with a U.S. Area Redevelopment Administration Loan. Initially, the
input to the plant was trimmings and other scrap from CLPC’s Oregon
operations. Particle board sales increased so quickly that the Duluth
operation consumed not only all of the former waste from CLPC’s Oregon
plant but also waste purchased from various lumber and wood products
operations in Minnesota and northern Wisconsin.

In terms of product volume, CLPC’s sales doubled between 1960 and 1990.
However, nearly all the growth had been in particle board; lumber and
plywood sales remained relatively constant (though varying with changes
in the home construction industry). In 1996, exports accounted for 9% of
CLPC’s sales. Nearly all of this was plywood sold to Japan. Fifteen
percent of CLPC’s 1996 purchases were from foreign sources, 5% was
mahogany from the Philippines used for plywood veneer, and 10% was wood
scrap purchased from Ontario, Canada, for use in CLPC’s Duluth plant.
Particle board produced in Duluth was marketed in all states east of the
Rocky Mountains, although sales in the southern United States were
somewhat less than spectacular.

The slowdown in home production, which started in the late 1970s in the
Midwest, really never ended and resulted in many years of little or no
growth in CLPC’s sales. Common stock dividends had been cut several
times. In 1996, they were 37 cents per share, down considerably from
their peak—in 1976—of $2.21.

Stockholders, the outside directors, and various lending institutions
were becoming increasingly unhappy. After a long, tense board of
directors meeting, agreement was reached only with respect to what some
of the organizational problems were. A partial list follows.

The corporate headquarters was in Portland, although all growth
occurred in the Midwest. Possibly, the headquarters, or at least more
functions, should be shifted to an office in Duluth where the plant was,
or to Chicago, the largest sales office. A major relocation away from
Portland would be difficult. Many employees would choose to remain on
the West Coast. Even for those willing to relocate, there was a split
between those willing to relocate to Duluth and those willing to
relocate to Chicago.There were too many vice presidents (see Exhibit 14-A). Because four
vice presidents (engineering, finance, human resources, and purchasing)
would reach mandatory retirement age by 1997, the number of vice
presidents should be reduced from nine to no more than six (plus one
executive vice president).Logistics and distribution costs were higher than industry averages.
The majority of customer complaints dealt with poor deliveries. In
Exhibit 14-A, a T shows where a traffic management function was located.
Geographically, the traffic manager for overseas operations was located
in Seattle, which was a foreign trade center for the Pacific Northwest.
The Chicago sales office had a traffic manager who handled all
fiberboard distribution and lumber and plywood distribution east of the
Rockies. Production and purchasing shared a traffic manager who was
headquartered in Portland and whose principal duty was overseeing
shipments of waste products from Oregon to Minnesota. Another traffic
manager in Portland, who reported to the sales vice president, was
acknowledged to be the firm’s senior traffic manager and more or less
coordinated the efforts of the other three. Recently, Irwin Buchanan III
had been promoted to that post. He was the only one authorized to
initiate action before regulatory bodies, and he also handled the
negotiations with carrier rate-making bodies and with carriers. (CLPC
used contract truckers and rail for most of its shipping.)The purchasing department handled the details of fleet management,
which included about a hundred autos on long-term lease for use by
management and by the sales force. Several light trucks were leased for
use around the plants.CLPC also owned two small aircraft, which often were the target of
questions during stockholders’ meetings. One plane was based at
Portland, the other at Duluth. Each was used in its respective region
for trips to sites without scheduled airline service. Both planes were
under control of the production department. Other departments,
especially sales, complained that the planes were being used for the
benefit of the production department rather than for the benefit of the
entire firm.P in the exhibit shows two packaging engineering functions. The one
under engineering was located in Portland and dealt with plywood
products. The one under sales was located in Chicago and handled
particle board products. The two packaging engineering functions saw
their roles differently. The one in Portland was concerned mainly with
safe packing and packaging of products moving between CLPC plants or
from CLPC plants to customers. The Chicago packaging engineers were
interested in finding new markets for particle board and lumber as
packaging materials to be sold to others. W in the exhibit shows where
there are company-owned warehouses. Numerous public warehouses were also
used, although not continually. Block I (upper left corner) in the
chart below shows locations of individuals concerned with inventory
levels. All four individuals were located in Portland. F indicates where
sales forecasting took place. Only sales and production devoted much
staff to forecasting. Each quarter, however, the financial vice
president’s office coordinated all forecasts to ensure comparability.
Computer operations were under control of the engineering division.
CLPC’s executive vice president determined priorities for computer
access and use.The human resources department handled employee moves, although only
a few had taken place since 1980. An outside director who was familiar
with current federal legislation suggested that CLPC negotiate a
contract with a household goods carrier to handle all CLPC employee
moves. This action would be especially significant if a major
reorganization resulted in numerous employee transfers.

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Deliverables

This week’s lab consists of five questions. Please be certain you answer
all the questions and address all the areas outlined in the grading
below.

LAB STEPS

Step 1: Original Organizational Chart

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Question 1: Draw a new organization chart for Columbia
Lumber Products Company that you feel best overcomes the directors’
criticisms of CLPC’s present (January 31, 1996) organization. Indicate
the geographic location of all operations shown on the new chart.
Explain why you established the organization chart the way you did.

Step 2: Organizational Chart of Reorganized Firm

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Question 2: Assume that the firm should be reorganized
in a manner that emphasizes sales and marketing. This would include a
physical distribution system, which would support the marketing effort.
Draw an organization chart that you think would accomplish this aim.
Indicate the geographic location of all operations on the new chart and
explain why you drew the chart as you did.

Step 3: Organizational Chart of Centralize Firm

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Question 3: Assume that the firm wants to reorganize
into a highly centralized form, closely managed from a single home
office. Draw a new chart that takes this into account. Indicate the
geographic location of all operations on the chart and explain why you
organized it as you did.

Step 4: Organizational Chart of Decentralize Firm

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Question 4: Assume, instead, that the firm wants to
reorganize into a highly decentralized form, where many important
decisions can be made out in the field. Draw up a new chart, including
the geographic location of all activities. Explain why you drew it up as
you did.

Step 5: Faster Third-party Firm

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Question 5: Young Irwin Buchanan III, the firm’s senior
traffic manager, heard rumors that the number of vice presidents was to
be reduced. He felt that this would reduce his chances of ever
achieving vice presidential—or presidential—status. Luckily, he had
access to some money in a family trust fund. He wondered whether he
should propose to form a separate, third-party firm to contract with
CLPC to perform CLPC’s logistical operations. What functions should it
offer to perform?

Step 6: Final Step

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Submit your completed assignment to the Lab Dropbox in a MS Word
document for grading. This work should adhere to the APA 6.0 guideline.

See the Syllabus section “Due Dates for Assignments & Exams” for due dates.

Grading Rubric

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Be sure to answer all the questions.It is recommended that you show all of your work. If you only
provide the answers and any of them are incorrect, you will lose all of
the points allocated to the incorrect answer. However, if you show your
work you might be able to obtain partial credit even if the answer is
incorrect (e.g., you set up the problem correctly but you make a math
error in your calculations)

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