Arbrecorp Ltée Case Study

Case Study: ArbreCorp LTÉE

ArbreCorp Ltee is an independently operating sawmill operation in Quebec, Canada, owned by a major forest products company. In ArbreCorp, several teams work towards the completion of a final product, each team having a medium to high level of interdependency for the completion of the product. These teams are the: sawmill, boom, planer, packaging, shipping and maintenance departments. Each of these departments have supervisors for each shift, except for the packaging department, where the source of the issues for the company lie. The packaging department shares a supervisor with other departments, depending on the shifts. In departmental teams such as these, there is a high authority differentiation level, meaning that the key decision-making is within the hands of the general manager, and to some degree, the supervisors. ArbreCorp, despite receiving high ratings and winning Boismarche’s packaging quality award for the past 5 years, experienced a decline in the ratings for the appearance of the end product, deemed substandard, receiving complaints from important customers.

As a result of this, ArbreCorp has faced losses, with increasing levels of inefficiency and suffering cost competitiveness within the packaging department, leading this to finally surface within the company. Decision-makers within the company must first pinpoint the problems within the packaging department, identifying what team processes are affecting the department’s effectiveness, deciding what solutions to attempt and implement. It is urgent that this is addressed immediately, as the packaging department handles the possibly most vital process, the first impression of a product that a customer will experience. If the ratings continue to decline rapidly, the company can face dire consequences, risking eventual bankruptcy.

The first step to solving a problem within an organization is identifying and understanding the symptoms. The first being the company experiencing a bottleneck in packaging: whereas the other departments experienced significant increase in productivity, with better human and physical capital investment, the packaging department experienced a decrease. This also led to the department being unable to handle the increased amounts of product they had to handle, leading to a large backlog. The second issue was an increase in production costs, with reports of increased overtime and extra Saturday shifts to handle the backlog. Additionally, this backlog also added to inventory costs with a risk for damage. Aforementioned complaints from customers about the packaging and state of the products, is another symptom. There were also reports of employees in the packaging department slacking, a sign of bad team norms that don’t align with the team’s goals and in turn, the company’s goals, with staff taking extended breaks and leaving early,