The Stages of Heinz Ketchup Company's Development - Case Study Example

PROJECT MANAGEMENT By Name Course Instructor Institution City/State Date Heinz 57 Company The Goals and Objectives of the Project The Heinz Company is recognized worldwide as one of the leaders in the food industry. Heinz ketchup is not only considered as an iconic bottle but also as a well-known household staple. Ketchup is just one of the many Heinz products, and the company generates most if its revenue from the Asian and European markets. The goal of this paper is to examine Heinz’s project of producing quality products that focus on the sustainability, wellness, and health. Aside from producing high-quality food products that focus on unique traits of the consumer in different parts of the world, Heinz participates in different projects such as social responsibility and charity. As mentioned by Feinberg (2013), the Heinz products, particularly the ketchup bottle have turned out to be the mainstay of greasy diners as well as family dinners. The familiar glass frame of the ketchup bottle is attributed to a rich, interesting history. The objective of this piece is to analyze the Heinz Ketchup Company as well as the stages of its development up to now. Description of the project The project management efforts at Heinz vary with the stages of development; normally it is higher during development stages and low during the conceptual. At the company, product development happens simultaneously on different projects, and given that resources for development are normally limited, the project manager is mandated to coordinate resources between various projects at Heinz. The company has adopted some project management software that allows for the integration of multiple projects using only one resource pool. In addition, such resources such as human resources are normally extracted from email address books of the organization, and the allocation, as well as monitoring of task, is carried out through email. One of Heinz’s main projects is the ketchup, which has 50% market share in the United States. With the view to the company’s sales’ ketchup, sauces, and condiments make up approximately 24% of the company’s total sales; frozen foods (such as Weight Watchers, Budget Gourmet and Ore-Ida), 15%; pet products (Ken-L-Ration, Gravy Train, as well as 9-Lives), 14%; tuna, 12%; pasta meals, beans, and soups, 12%; infant foods, 11%; and other products account for the remaining 12%. The company generates 55% of revenue in North America, 11% in Asia-Pacific region, and 26% in Europe. The main project of the company is to produce the above-mentioned products economically and ensure quality. Company Description and Its Products Heinz Company was established in 1869 by Henry John (H.J) Heinz in Sharpsburg, Pennsylvania. The company success is attributed to the values of innovation, collaboration, team building, employees’ integrity, and resource-based operations. The company has successfully sold its products in the market for more than 140 years. The company incorporation happened on 17th July 1900, and in 1905 it became a business partnership. Presently, Heinz is headquartered in Pittsburgh, and its vision is striving to produce quality products for its global market while influencing the world positively. By means of its Heinz Seed project, the firm has successfully promoted sustainability and supplies natural hybrid tomato seeds to over 30 countries (Feigenbaum et al., 2011). This allows for the higher production of tomatoes with no genetic modification. As mentioned by Feigenbaum et al. (2011), this project has predominantly been successful in China. Besides that, Heinz partnered with Lucy Liu as the Heinz Micronutrient project spokeswoman to offer powdered minerals and vitamins packages that could be consumed by infants and children after mixing the powder with normal meals. Besides that, the company through Heinz Microseed project has enabled millions of children to fight the iron deficiency threat as well as mineral malnutrition in approximately 15 countries. The project focused mainly on Asian countries but was later introduced into Africa and North America with the objective of reaching many children. The company seeks to impact the world using Heinz Micronutrient and Heinz seed projects. H.J. Heinz Company before merging with Kraft Foods Group Inc. Was widely recognized for its 57 variety of products, but now the company produces thousands of food products in more than 20 countries worldwide. Furthermore, the company sells its products in different categories such as infant/ nutrition, meals and snacks, as well as ketchup and sauces. The categories have brand names like Nurture, Lea & Perrins, Classico, and others that have made Heinz become one of the world’s most successful companies in the food industry. As mentioned by Feigenbaum et al. (2011), Heinz is the world’s leader in the ketchup line in having over 50% of the market share in the United States. Besides that, Heinz’s Ore-Ida has been successful in the U.S. market with over 50% of the frozen-potato industry. As of 2011, Heinz has over 150 brands that have a 1st and 2nd place in market share across the globe. Moreover, the condiment line has for many years been the company’s main product lines holding almost 24% of the total sales. Heinz’s Stages of Its Development Even though Heinz is recognized widely for its ketchup, Manna et al. (2011, p.26) posit that the company produces a lot of food products, which are sold to over 200 countries. Still, Ketchup, Ore-Ida frozen-potatoes, and StarKist brand tuna are Heinz’s products that dominate the market in terms of share percentage. As mentioned earlier, the company was incorporated in the1900, turning out to be a major Brand name in the America. Heinz was then the leading American company in ketchup, vinegar, mustard as well as pickles. Hitherto, their ‘57’ array of products have increased to more than 200 varieties. As mentioned by Manna et al. (2011), Henry Heinz main objective was retaining the “57” name, which was the original slogan. In their New York-based factory, the ‘57’ sign was constructed illuminating on a pickle that was 40 foot long. Heinz was recognized far and wide as an advertising genius because of his clever merchandising, but still, he ensured that his religious morals were not violated. During his lifetime, all his advertisements were not running on Sunday. Heinz Company became the most impressive firm in the industry in terms of facilities and treatment of employees. Heinz England factory was opened in 1905, but some years later, Henry Heinz died (in 1919) aged 75 years. At that moment, Heinz Company had employed more than 6,500 people and close to 25 factories in different parts of the globe. Howard H.J. Heinz II, the son of Henry Heinz, became company’s president. Before Howard’s death, his son H.J. Heinz II (well-known as Jack) had worked in different divisions of the company such as administrative offices and canning factories. Earlier, Jack had established an Australian plant under the orders of his father, Howard. Some years later, Heinz-Australia became the biggest plant for food processing in Australia. Jack became the company’s president in 1941, and five years later he nearly doubled the sales. In 1946, the company announced that its net profit was over $4 million. At the time of the Second World War, Jack Heinz actively engaged in food relief and travelled more than four times to England with the objective of assessing food-related problems. During his tenure, Jack Heinz expanded the company, both domestically and globally. Jack launched subsidiaries in countries like Portugal, Italy, Japan, Venezuela, and Netherlands. Some of the assets acquired by H.J. Heinz Company between 1960 and 1965 include Ore-Ida Foods, Inc., Hachmeister, Inc. StarKist Foods as well as Reymer & Bros., Inc. There was an enormous change in the food industry during H.J. Heinz II tenure (25 years) as the chief executive. Some of the changes include the development of new marketing as well as distribution systems and the emergence of supermarket chains. In 1979, Anthony J.F. O'Reilly became H.J. Heinz Company president, and he focused mainly on financial results. Generally, achievements of O'Reilly's as cited by Manna et al. (2011, p.27) were very impressive. For instance, he spearheaded the acquisition of Hubinger Company acquisition and Weight Watchers International between 1975 and 1978 before being named as the company’s president. The company had by 1980 increased volume, and at the same time, reduced its plants and employees by half and 18%, respectively. When supermarket started selling generic products, Heinz Company started using thinner glass bottles to counter the generics industry with the objective of cutting the transportation and packaging costs. The size of the StarKist tuna can was reduced when they started underselling in the foreign markets, which enabled StarKist to save approximately $7 million. This saving strategy was recognized as ‘nickel and dime it’ and allowed the company to eliminate the bottles’ back labels, reuse water and reclaim heat. In the 1980s, O'Reilly's strategy was to utilize the savings to improve marketing, mainly advertising, with the main objective of improving the market share. As mentioned by Manna et al. (2011), O'Reilly's bottom-line and hard-nosed strategies made the Heinz Company to be recognized as one of the best companies in the world. The company’s expansion strategy saw Heinz penetrating the overseas markets, especially the developing countries such as Zimbabwe. The company penetrated the Chinese and Korean markets through joint ventures and in Thailand through the purchase of Win-Chance Foods’ controlling interest. The strategies espoused by O'Reilly led to the increase in sales from $2.9 billion to $6.1 billion between 1980 and 1990. Furthermore, the net profits during the same period increased fourfold to $504 million. O'Reilly continued with his restructuring efforts by acquiring UK’s Farley's baby food, India’s Glaxo Holdings plc's and Wattie's in New Zealand. By 1996, the sales had surged to $9.11 billion, and this increase is attributed mainly to the company’s acquisitions in different parts of the world. At the domestic level, the company acquired Kraft General Foods, Inc in 1994, Quaker Oats Company in 1995, and Earth's Best, Inc in 1996. The company initiated a major restructuring in early 1997 that led to the sale or closure of 25 plants, and the employees were reduced by 2,500. Still, the company carried on with its selective acquisitions; for instance, it acquired John West Foods Limited in 1997, which was then one of the UK’s leaders on canned fish and tuna. Heinz experience a leadership change in 1998, whereby O'Reilly was appointed as the nonexecutive chairman and Johnson became the company’s CEO and president. The restructuring efforts of the company led to different products lines, but ketchup, infant foods, frozen foods, tuna, convenience meals as well as pet foods generated approximately 80% of the company’s total revenues. More recently, H.J. Heinz Company and the Kraft Foods Group Inc merged to form one company, known as Kraft Heinz Company. According to Coyne (2015), the new company has sales amounting to $28 billion; thus, making it third-largest company in North American food and beverage sector. Organization Structure After the merging of Kraft Foods Group Inc and H.J. Heinz Company to form Kraft Heinz Company, Alex Behring was named the Chairman of the board of directors effective. He had previously served as Heinz board Chairman between 2013 and 2015. John T. Cahill was appointed as the Vice Chairman, and other directors include Tracy Britt Cool, Warren E. Buffett, Gregory Abel, Feroz Dewan, Jeanne P. Jackson, John C. Pope, Marcel Herrmann Telles, Mackey J. McDonald, and Jorge Paulo Lemann. The company’s CEO is Bernardo Hees and had been working at H.J. Heinz Company before the merger. Paulo Basilio is the company’s Chief Financial Officer, and his task is overseing all the finance functions of the company. Additionally, Melissa Werneck is the company’s Senior Vice President of Global IT, Performance and People. Her major role is setting as well as implementing performance goals in the firm and monitoring the global information technology and human resource functions. The company’s Vice President of Corporate and General Counsel Secretary, Global Operation, Global Foodservice, Corporate and Government Affairs, and Marketing, Innovation, R&D is Jim Savina, Eduardo Pelleissone, Emin Mammadov, Michael Mullen, and Nina Barton, respectively. The zones presidents include Rafael Oliveira (Europe), Carlos Piani (Canada), Francisco Sa (Latin America), and Marcos Romaneiro (AMEA). George Zoghbi is the company’s U.S. Chief Operating Officer, while Eduardo Luz, Tom Lopez, Howard Friedman, Sergio Nahuz, Andre Maciel and David Toy are heads of U.S. Meals & Sauces Business, Beverages & Snack Nuts Business, Meat & Dairy Business, Sales, Commercial Finance, and Foodservice (Kraft Heinz Company, 2017). Type of the Problems That Heinz Faces In Production The performance of the company as cited by Feigenbaum et al. (2011) is influenced by economic and political conditions in their markets across the globe. Some of the conditions as well as factors that have influence Heinz in its production activities include changes in applicable regulations and laws, which includes the changes in drug and food laws, taxation requirements, accounting standards, as well as environmental laws. Besides that, factors such as restrictions on exports and imports, political unrest, and hyperinflationary environments in countries such as Venezuela pose a serious challenge to Heinz’s production plants. According to Feigenbaum et al. (2011), even though the market exhibits some growth potential, hyperinflationary environment and political instability generates risk for business operations and also market penetration. Disruption of Heinz’s supply chain can adversely influence the company’s financial results. Furthermore, high energy costs can influence the company’s transportation and production costs. Besides that, the exchange rate of the foreign currency can make it challenging for the company to effectively integrate joint ventures and acquisitions into its current business operations. Pricing is also another major problem that can influence production at Heinz; for instance, poor financial condition of both suppliers as well as customers can negatively influence the ability of the company to maintain or gain profitability or market share. A major change in the sales volume or product prices could financially affect Heinz. As mentioned by Nambiar (2010, p.3), the product design conventional role in manufacturing companies was making sure that the desired objectives are met by the end-product with the view to the customer preferences considering the aesthetics, ergonomics, efficiency, and performance. With the increased emphasis on sustainable production, Heinz is burdened with the extra task of taking into account the environmental impact of the company’s decisions. Therefore, it has become very important for the company to first accustom itself with different issues associated with sustainability. According to Nambiar (2010, p.3), processes and material selection has a major bearing on the company’s impact on the environment. For this reason, it is imperative for Heinz to constantly improve the processes of production by concentrating on waste reduction. Implications of Project Management Tools and Techniques at Heinz With the view to project management, Bender (2010, p.12) posits that the responsibility of conceiving, designing, as well as implementing, and handling the overall objectives of the organization including project management is shouldered by the executive management. The success of projects at Heinz is mainly attributed to sound project management practices, the company’s ability to ensure that all projects are aligned with the activities of the organization, and providing adequate resources and capital to the project activities. Besides that, the company uses advanced technologies to ensure resource optimization. In order to remain competitive as indicated by Zdanytė and Neverauskas (2012), organizations have to be flexible as well as dynamic to adapt to the requirements of the business environment. Given that the food industry has become very competitive, project management has enabled the company to realize sustainable development. It has become more vital for the company to develop an integrated approach by concentrating on organization strength and the goals of the strategic plans which cannot be separated from the normally acknowledged managerial standards. The projects carried out at Heinz are designed purposely to meet the specific objective of the company that falls in the quality of continuous improvement and quality. At Heinz, the project managers focus on putting Lean Six Sigma projects into practice that concentrate on executing efficient operating procedures. Although Lean Six Sigma appears extremely complex, but project manager at Heinz employs numerous laws in its day-to-day activities; the law of the market, flexibility, complexity, focus, and velocity. The objective of project management tools and techniques at Heinz is looking for issues that influence the customers, their root causes, and putting solutions into practice so as to improve processes and improving customer satisfaction.  How the Project Manager Adopted Planning, Budgeting and Scheduling Process At Heinz, the project leader is responsible for developing project infrastructure utilized for designing as well as implementing the project. The project manager takes part in building a plan for implementing the project rooted in the profile of the project. Basically, the plan for tracking as well as developing the procurement plan, detailed schedule, as well as the budget plan is developed at the time of project start-up. During the start-up phase, the plans for tracking client satisfaction, communication, as well as information technology are developed. The company’s project manager uses tools such as responsibility matrices, diagrams, and flowcharts to capture the work processes related to project plan execution. It is the responsibility of the manager to make sure that project schedule development, as well as management, normally is completed on time. The Heinz’s project manager always ensures that projects are completed on time by developing a realistic plan. The project managers are also tasked with not only developing a project plan but also building a schedule to make sure that the plan is met. The project schedule is developed by analyzing the project contract, scope, and other related information which could enable the manager and team define the deliverables of the project. This information is utilized by the project team to create a milestone schedule. At Heinz, a detailed schedule is developed through a work breakdown structure, whereby the project team arranges tasks in layers of detail. Heinz understands that a project can only be successful if competed within the budget. Therefore, the project manager and team are tasked with developing as well as controlling the project budget. Basically, the project budget accuracy is associated with the amount of information recognized by the manager and team. It is the responsibility of the project manager to make sure that the cost estimates developed by project team is based on accurate information. Heinz manager is also responsible for costs tracking against the budget and taking suitable corrective action to make sure that project performance is in line with project plan. Recourse Allocation, Monitoring, and Controlling At Heinz, the project team is concerned with resource allocation, monitoring as well as controlling. The company is involved in the project by offering resources as well as controlling the project influence in establishing factors like the scope of service, market share, profitability, as well as quality. The commitment, as well as the support of Heinz's top management, is an important requirement for the success of the projects. The success of projects at Heinz is attributed to the willingness of the leadership to offer resources and the needed administrative support. Still, it is the responsibility of the project manager to ensure that the allocated resources are efficiently utilized. The project team is also responsible for planning as well as control of resources utilization (Munns & Bjeirmi, 1996). At the phase of monitoring and controlling, it is the responsibility of the project manager to make sure that all tasks in the project schedule are completed. At Heinz, the project schedule is normally updated and monitored regularly, and the project charter highlights management approaches and a list of risks that have to be monitored. Business Solution and Analysis, Costing Break Down For effective portfolio management at Heinz, the company should carefully align its strategic goals, well-managed projects and funding sources. The company should make sure that there is sufficient money for crucial initiatives, but programs and projects that have failed to meet its objectives or are uneconomical have to be identified. To maximize return on investment, Heinz should have a clearly-defined strategy that has measureable goals. Given that Heinz’s project portfolio is extremely multifaceted and large for the project team to manage with no sophisticated technological tools; the company should adopt the Enterprise project portfolio management software so as to align its strategic goals successfully with the projects; thus, enabling company leaders and project manager to monitor long-term and short-term results. With the view to Costing Break Down, the company should classify in the project into cost elements as well as cost units. Basically, establishing a cost structure would allow for efficient controlling, cost planning as well as measures implementation to reduce costs. The company should develop the Costing Breakdown structure to summaries costs in the projects as evidenced in the figure below. Figure One: Cost Breakdown Structure Conclusion In conclusion, Heinz is recognized worldwide for its Ketchup as well as condiment products lines. Clearly, Heinz has a different line of products in different food categories ranging from frozen foods to condiments. Heinz’s ability to offer different products across the globe is attributed to its diversity strength in production and innovation. The company’s innovative marketing methods help in successful product production in the global food industry. Heinz has engaged in different innovative projects with the objective of improving its product lines. References Bender, M., 2010. A Manager’s Guide to Project Management Learn How to Apply Best Practices. Upper Saddle River, New Jersey: Pearson Education, Inc. Coyne, J., 2015. Goodbye H.J. Heinz Co.; Kraft Heinz merger a done deal. [Online] Available at: HYPERLINK "http://www.bizjournals.com/pittsburgh/news/2015/07/02/goodbye-h-j-heinz-co-kraft-heinz-merger-a-done.html" http://www.bizjournals.com/pittsburgh/news/2015/07/02/goodbye-h-j-heinz-co-kraft-heinz-merger-a-done.html [Accessed 1 March 2017]. Feigenbaum, K., White, J. & Matticks, E., 2011. H.J. Heinz Inc: Industry Analysis. Greenville, SC: Furman University. Feinberg, A., 2013. The Untold History Behind Everyone's Favorite Condiment Bottle. [Online] Available at: HYPERLINK "http://gizmodo.com/the-untold-history-behind-everyones-favorite-condiment-1201120987" http://gizmodo.com/the-untold-history-behind-everyones-favorite-condiment-1201120987 [Accessed 1 March 2017]. Kraft Heinz Company, 2017. Leadership Team. [Online] Available at: HYPERLINK "http://ir.kraftheinzcompany.com/management.cfm?sect=g" http://ir.kraftheinzcompany.com/management.cfm?sect=g [Accessed a March 2017]. Manna, D.R., Marco, G., Khalil, B.L. & Esola, C., 2011. Sustainable Markets: Case Study Of Heinz. Journal of Business Case Studies, vol. 7, no. 5, pp.35-42. Munns, A.K. & Bjeirmi, B.F., 1996. The role of project management in achieving project success. International Journal of Project Management, vol. 14, no. 2, pp.81-87. Nambiar, A.N., 2010. Challenges in Sustainable Manufacturing. In Proceedings of the 2010 International Conference on Industrial Engineering and Operations Management, Dhaka, Bangladesh. Dhaka, Bangladesh, 2010. California State University. Zdanytė, K. & Neverauskas, B., 2012. Selection Appropriate Project Management Tool For Advanced Organization. Economics and Management, vol. 17, no . 2, pp.782-87. Read More