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For this Assignment, you will evaluate a real-world business scenario using a systems thinking approach to evaluate the workings of an organization. You will identify areas within the case where systems thinking is applied and where it is not. You will also evaluate the dilemma in terms of the concepts of a learning organization and moral imagination.

Marco Benevento, the owner of Benevento Foods, a manufacturer and distributor of food products to hotels and restaurants, has received a complaint from one of his customers that several pieces of rubber have been found in one of the baking mixes. The customer is placing all incoming orders on hold until the issue is resolved. Adding to the situation, the annual BRC Food Safety audit is scheduled for the end of the month. Mr. Benevento knows that you are working toward completing your MBA and wonders if there are any techniques you have learned that may help to identify the causes of the quality issue. As you begin to tell him about systems thinking and root cause analysis, he is impressed and asks you to take charge of finding the root cause(s) of the quality issue and to provide him with recommendations for improvements.

Submit

your 3- to 4-page business report, to include the following:

Thinking in Systems

You are to evaluate the workings of Benevento Foods—including production, quality control, and maintenance processes—through the lens of systems thinking. Through your evaluation, be sure to address the following:

Identify two to three areas where Benevento Foods applied key principles of systems thinking and where this thinking appears to be lacking. Explain why.

By applying the concept of a learning organization, evaluate the core issues that you think led to the dilemma.

Note:

Be sure to consider the 11 laws of systems thinking as you perform your evaluation.

Apply the concept of moral imagination to the scenario and explain how it could help bring positive social change within the organization. Be sure to consider who the stakeholders are and explain how the framework would impact them.

W15440
BENEVENTO FOODS: WHEN THE RUBBER HITS THE DOUGH
Micheline Singh wrote this case under the supervision of David Wood and Stephan Vachon solely to provide material for class
discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may
have disguised certain names and other identifying information to protect confidentiality.
This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.
Copyright © 2015, Richard Ivey School of Business Foundation
Version: 2015-09-29
Marco Benevento, president of Benevento Foods (BF), hung up the telephone and put on his lab coat,
safety shoes and hairnet to enter the company’s production plant in upstate New York. He never could
have foreseen the current situation. It was June 2014 and he had just received a call from the Quality
Assurance manager at Rockwell Bakery reporting several pieces of rubber found in BF’s baking mixes
and informing him that the bakery would be placing all incoming BF orders on hold until the issue was
resolved. As Benevento walked through the plant, he questioned whether there were quality issues with
any other products or if this was an isolated incident. Regardless, with the annual British Retail
Consortium (BRC) Food Safety audit occurring at the end of the month, he would have to work quickly.
COMPANY HISTORY
In 1981, Antonio Benevento founded Benevento Foods, a manufacturer and distributer of food products
to hotels and restaurants. Just two years later, the company declared bankruptcy and Marco took over the
business from his father. At 17 years old, the younger Benevento became owner and president and sought
to develop a presence in the bakery industry, developing and manufacturing baking mixes and bases.
The baking mixes that BF developed and manufactured were distributed to commercial bakeries or bakery
departments within retail stores. The products were shipped as dry mixes with an average shelf life of 270
days. They were then baked in the customer’s store on an as-needed basis after wet ingredients were
added. BF’s customers ranged in size from small stand-alone bakeries to national grocery chains,
resulting in varying order quantities.
BF’s products were all manufactured in the upstate New York plant about 30 miles from Plattsburgh and
shipped across North America. All orders were delivered by truck, resulting in potentially long delivery
times. Some customers ordered months in advance when they had a strong predictive ability and
understanding of their sales forecasts. However, orders from small customers took a fair share of sales
and came with a request for delivery as soon as possible because they did not have the space to hold
inventory. As Benevento said:
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Many of our customers have become great friends of mine. We have done business together for
over 20 years. They don’t have the most advanced forecasting but they know if they are in a bind
and need to put through a rush order, I always tried my best to help them out.
The development of the custom baking mixes often emerged from a joint effort between the BF’s
Research and Development (R&D) team and customers. They worked together to create a product that
would meet exact specifications for taste, colour and texture. This was important as some of BF’s
customers sold products to end-consumers who had their own set of preferences.
Under Benevento’s leadership, demand increased to a level beyond what any of BF’s management
anticipated, and by June 2014 the New York plant was employing about 90 full-time equivalent workers.
BF continued to focus on growth by expanding distribution geographically to Mexico and Japan and
developing new product lines. One of the new product initiatives was the development of a gluten-free
line. The rigorous cleaning required for a product to be certified gluten-free added complexity to the
production process. New workers were also being hired on an ongoing basis and were integrated quickly
with on-the-job training from their peers to minimize production disruption and overtime hours. As the
volume and complexity of products increased, production was under increasing pressure to deliver on
time.
PRODUCTION
Production start-up began at 7 a.m. when the operators inspected their respective machinery and
workstations, filling out pre-operational inspection forms (see Exhibit 1). With a long list of items to
produce, they were always eager to finish the paperwork and start production. It was especially important
for the compounding and mixing rooms to finish their inspections as quickly as possible as they needed to
pass their products on to the next step in the process and did not want to leave their counterparts waiting
idle. Such a situation created some friction on the shop floor, as indicated by one of the bagging room
operators: “It’s not my fault I have to wait for the ingredients to be measured and mixed before I can start,
but I am the one who gets told off by the production manager for sitting around. The guys in the process
before me don’t hear any of it from the manager, but I’ll make sure they hear it from me later.”
Production began by measuring out the individual components of the dry baking. Then the operator
mixed these manually and combined them into mass production totes (see Exhibit 2). The combined
weight of the ingredients was then checked against the MO1 to ensure that no ingredient was missed in
the compounding process. Despite the standardized recipe, some operators experienced sporadic
difficulties, as one compound room operator said: “Sometimes it just doesn’t add up. We put everything
in properly but the weight doesn’t come out right. Usually we add some extra flour to get to the weight
we need and move on. With totes of 1,000 kilograms [kg], nobody will really notice.”
The combined ingredients were then transferred to the mixing room, where the contents of the 1,000 kg
tote was added into the mixer along with other ingredients. Some ingredients had to be added separately
at this stage to avoid contaminating the totes with allergens, such as dry eggs, soy and dairy. The product
was sifted for the first time as it was mixing. This ensured that no clumps of ingredients were left in the
mix. A mixing room operator explained:
If there is just a bit left in the sifter, I usually let it pass. It is more work to spend time speculating
what the material is and filling out the form than it is worth. Sometimes if I do a visual inspection
1
An MO or modus operandi is the bill of materials and mixing instructions for the product.
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at the beginning to see that all the ingredients are the right consistencies going in, I won’t waste
time trying to pry open the sifter door. I know it will get sifted again in the bagging room. If I
don’t catch it now, he will in the bagging room later.
Once the product was mixed according to the MO, it was transferred into another 1,000 kg tote and kept
outside the bagging room in the holding area. Once the bagging room operator was ready for that batch,
he brought it into the bagging room and opened the bottom flap of the tote to access the product. While he
did, he checked to ensure there were no loose threads hanging from the tote that could contaminate the
product. The product was then sifted again before it was ready to be divided into large brown paper bags.
The product traveled down from the sifter to a large funnel, called a hopper. Below the hopper, the
operator held a paper bag and entered the desired weight on the screen. This allowed the product to flow
through the hopper in increments of the specified amount, using an automatic filler.
After Benevento received a complaint from a customer about under-filled product bags, the operators
were trained to make sure there was always more than the required amount in each bag. The weight of the
bagged product needed to be at least as much as the weight specified on the label. Ensuring this required
additional labour because the automatic filler weight in the bagging room was often incorrect and the
operators had to weigh each bag on a portable scale and adjust the amount manually. The bagging room
operator expressed great frustration with the maintenance employees: “I’ve told them so many times that
the automatic filler doesn’t work. Once in a while they’ll send someone to take a look at it and it will
work for a day or so before it breaks down again. Then they complain I’m taking too long to get product
out. It’s because I have to do everything manually!”
Once the bag was filled, weighed, stitched and sealed, it went through the x-ray machine. Finally, the
bags were stacked on a pallet, wrapped and taken to the storage area where they stayed until they were
shipped to the customer.
QUALITY CONTROL
Food safety became a prevalent public issue following a number of serious incidents in the industry. In
2008, Maple Leaf Foods voluntarily recalled a number of meat products after a widespread outbreak of
listeriosis and 21 reported deaths.2 Benevento knew that any erosion in consumer confidence would have
a long-standing effect on sales. As a result, BF employed a rigorous quality system to avoid a similar
situation.
The weight of the product in the paper bag was a key indicator of potential foreign material
contamination. If there was variation from the desired weight, there could be cause for concern. The
bagging room operator weighed three bags from each batch (one at the beginning, middle and end) to
ensure consistency. The records were then collected by the Quality Assurance Department to be filed in
BF’s information technology system at the end of the week (see Exhibit 3).
A sample from each batch was also baked and tested by an internal quality control technician, who
checked to make sure the product adhered to the characteristics set out by the customer (density, colour,
taste, etc.). Some samples of randomly selected products were shipped to an external lab for additional
allergen and contamination testing. This was particularly important for gluten-free products that must
have gluten content of less than 20 parts per million (ppm). According to the compound room operator:
2
Morgen Witzel, “Maple Leaf’s Response to a Crisis,” Financial Times, www.ft.com/cms/s/0/8c8d3668-adb5-11e2-82b800144feabdc0.html#axzz3ae0ixi6q, accessed May 21, 2015.
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“Before I start the batch, I check to see if this product will be sent out for external testing. If I see that it
is, I make sure I’m a little bit more careful. Generally we don’t hear about the results unless they are
really bad. No news is good news around here.”
MAINTENANCE
With the rigorous demands on production, one of management’s greatest concerns was the amount of
machine downtime. From the moment they arrived at 2 p.m., the two part-time maintenance employees
were chasing machinery. The production supervisor was often found filling the role of the maintenance
employees in the morning. He commissioned temporary fixes until they arrived.
The mandate of the maintenance team was to keep the line running so that the operators could get product
out the door. As a result, preventative maintenance was limited, and machines were patched up as quickly
as possible so that they could keep running. A bagging room operator complained:
Sometimes the buzzer on the x-ray machine doesn’t work. There is an alarm light for backup but
now I have to manually weigh the bags so sometimes I don’t see it. Unless the machine was on
the edge of stopping, I did not even bother calling maintenance anymore. They never really fixed
the problem and they took too long. By the time they were done, I was already two batches
behind and my supervisor was breathing down my neck!
CONCLUSION
BF had received minor complaints before, but nothing near this severity. Benevento wondered whether
this was an isolated incident or if it was systematic. Regardless, with the BRC audit around the corner and
customer orders piling up, he quickly needed to get to the bottom of this problem.
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EXHIBIT 1: PRE-OPERATIONAL INSPECTION FORM
Source: Company files.
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EXHIBIT 2: PRODUCTION PROCESS
Measure & compound
ingredients according to MO
Check weight of tote with
ingredients
Sift & mix ingredients
Add other ingredients
(containing allergens)
Sift & divide product into
paper bags
Check weight of full paper
bags
Move finished bags to
storage area for shipment
Source: Company files.
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EXHIBIT 3A: BAGGING ROOM DATA COLLECTION
Source: Company files.
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EXHIBIT 3B: BAGGING ROOM WEIGHT CHECKS
BATCH #
WEIGHT CHECK (KG)
BEGINNING
MIDDLE
END
96396
20.00
20.00
20.00
96397
20.16
20.00
20.00
96398
20.00
20.15
20.10
96399
20.20
20.15
20.11
96400
20.00
20.10
20.20
96401
20.11
20.13
20.00
96402
20.00
20.15
20.00
96403
20.00
20.11
20.00
96404
20.10
20.00
20.00
96405
20.16
20.04
20.00
96406
20.13
20.04
20.11
96407
20.12
20.00
20.10
96408
20.00
20.10
20.00
96409
20.00
20.00
20.10
96410
20.05
20.13
20.07
96411
20.14
20.06
20.07
96452
20.13
20.08
20.14
96453
20.17
20.11
20.02
96489
20.10
20.11
20.00
96490
20.00
20.00
20.10
96375
20.00
20.10
20.15
96376
20.10
20.16
20.00
96309
20.00
20.17
20.10
96421
20.00
20.13
20.00
96446
20.15
20.14
20.11
96447
20.00
20.00
20.10
96448
20.07
20.13
20.02
96449
20.12
20.06
20.01
96369
20.00
20.16
20.00
96570
20.15
20.00
20.00
Note: Weight checks were conducted on individual bags at the beginning, middle and end of each batch during the bagging
process.
Source: Company files.
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Week 2 Assignment:
An Evaluation of the Dilemma at Benevento Foods:
Thinking in Systems
Report prepared by: Replace this text with your name.
Date: Replace this text with the submission date.
Walden University
WMBA 6040: Improving Business Performance
1
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References
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