ORGANIZATIONAL DEVELOPMENT CASE STUDY

MODULE 1: PROBLEM CASE

This section provides background information about the company studied in
the case. Details are given on the following items: brief history of the
company, significant characters and problems identified in the case study.

LY LEE FOODS COMPANY

Ly Lee Foods Company was established in 1992. Its humble beginnings started with
a single manufacturing machine and 5 employees. The founder Mr. Lee Sr. has 3
sons, Lexter, Luke and Louie. Lexter and Luke have left the company being older
and set up their own food companies; Lee3 Foods Industries and Light Biscuits
Corporation. These two companies are affiliated with Ly Lee Foods Company.

On June 2003, Mr. Lee Sr. has agreed with the Lee brothers that some changes need
to be made in the company to make it more profitable and competitive in the
industry. Thus that June, Louie was tasked to manage Ly Lee Foods. He was then in
his early 30’s and equipped with a Production Engineering degree from a reputable
university.

Louie made some changes to improve company performance, both in terms of

market share and profitability. From then till now, Ly Lee Foods has been able to get
a piece of the pie to be among the leading manufacturers of snack foods in the
country for the CDE market. Ly Lee Foods has currently over 300 employees. They
have solid distribution channels in the greater Luzon areas and the company has
recently distributed its products to the Visayas and Mindanao areas. Its main office
is in Manila with their branch in Caloocan and the factory located in Bulacan.

Currently, Louie is focused on improving raw materials warehouse department. Just

a few months ago, the company invested in an accounting IT system where all
receiving and releasing of goods from and to the warehouse may be monitored. This
computer system was set in place for better monitoring of inventory and record
keeping of all transactions. The responsibility of encoding the raw materials into the
computer system is with the person assigned to that particular material.

To improve the workflow at the Raw Materials Warehouse (RMW), Louie created a
Raw Materials Supervisor for the Department. Thus, on January 2016, Louie
assigned Digno, who has been there for almost 18 years, to become the Raw
Materials Supervisor. Digno had been a production worker and is a college
undergraduate. His responsibility is to monitor and double check all materials
received and issued. Part of his responsibility is also to monitor all company spare
parts and supplies, and to issue and receive them.

Currently under the Raw Materials Supervisor are seven (7) staff. These seven are
as follows with their corresponding tenure and job responsibilities:

1. Ben - handles raw materials (group 1)

- 20 years with the company
 - RMW Staff already
- Educational background is high school level

2. Robert - handles raw materials (group 2)

- 16 years with the company
- used to work as production staff (5 years in RMW)
- Educational background is college level

3. Jay-Ar - handles packaging materials (group 1)

- 8 years with the company
- used to work as maintenance staff
- Educational background is High School Graduate

4. Abner - handles packaging materials (group 2)

- 18 years with the company
- used to work as RMW for packaging materials
- Educational background is High School Graduate

5. Noli - handles packaging materials (group 3)

- 9 years with the company
- Used to work as Packaging operator for 3 years
- Vocational course

6. Rey - handles packaging materials (group 4)

- 15 years with the company
- Used to work as production staff- peanut section
- Educational background is High School Graduate

7. Myrna - handles scrap and Diesel (Pump in-charge for Delivery)

- 21 years with the company
- used to work as company lady guard
- Educational background is High School Graduate

The responsibilities of the raw materials/ packaging materials personnel are:

1. To be accountable for the particular material
2. To receive items from the supplier and see to it that they are the correct
specifications.
3. To ensure the quality and quantity of materials are received, stored and
issued properly in and from the warehouse.
4. To conduct materials inventory, either weekly or monthly, as indicated in
the standard operating procedure on the item.
5. To prepare and issue the items requested by the other departments.
6. To check the consistency and accuracy of the information on the request
forms (both incoming and outgoing requests).
7. To monitor and maintain the inventory level of stocks as indicated in the
standard operating procedure, and prepare the replenishment form when
the need arises.

The responsibilities of the scrap custodian are:

1. To be accountable for all the scrap.
 2. To receive and release the scrap.
3. To prepare the inventory report.

The responsibilities of the spare parts custodian are:

1. To be accountable for all the spare parts.
2. To segregate the spare parts according to types or classifications.
3. To conduct inventory of the spare parts.
4. To monitor and maintain the needed inventory level for the particular
spare part.
5. To monitor and maintain the inventory level of the spare part as indicated
in the standard operating procedure, and prepare the replenishment form
when the need arises.
6. To receive the damaged spare parts from other department.
7. To issue the needed spare parts as requested by other departments

Recently, supervisors in the production areas are very vocal about their complaints
against the RMW personnel. Early one afternoon, due to a sudden change in
production schedule, Precy, a Production Supervisor for Line 5, made an additional
request of group 1 raw materials to Ben. But Ben, instead of issuing out the valid
request, was angered by the request. Ben even questioned Precy as to why the
additional request. Ben did not issue out the requested raw materials immediately.
Bens’ usual reaction of delaying the raw materials request has been a consistent
response to additional requests. The other production lines have similar complains.

Because of this incident, Precy reported it to the Production Manager, Jenny. Jenny
then reported this incident to Louie, the General Manager. To this date, no action
was taken by Louie.

On another instance, Abner, was issuing out packaging materials to a packaging

supervisor of Line 2. The packaging supervisor commented that some of the
packaging materials are damaged, and damaged packaging materials should have
been returned back to the supplier. Abner commented, “Tell that to the supplier, it
is not my job anymore.”

A few months back, Digno requested for an additional personnel to do the encoding
of inventory spare parts. But Louie thinks this request is invalid since the RM
personnel are adequate. Sometimes, Louie sees them doing nothing. On one
occasion, Louie called the attention of Digno about the idleness of this staff. But
Digno answered arrogantly stating that they have nothing to do anymore. Louie
just ignored his remark for fear that it might trigger labor problems since he has now
over 300 employees.

But Louie knows these problems have to be addressed soon as it has been ongoing
since he took over the company. He calls in the Human Resource Manager who has
been in the company for 2 years for an analysis of the company raw materials
warehouse personnel. After extensive discussions, Louie is asking for a complete
report on the issues, diagnosis of the problems at hand and his recommendations.