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Case Study - 180760119011,12 (Fargo Foods)

Fargo Foods is an international food manufacturer with $2 billion in annual revenue and canning facilities in 22 countries. It has experienced 12.5% growth annually for the past 8 years. Recently, Fargo Foods implemented a matrix project management structure for construction projects but found it was not operating effectively. Key managers were interviewed to understand challenges. Replanning was seen as necessary due to initial planning being vague and ground rules changing. Additionally, selecting the best technical experts rather than managers to lead projects had been a mistake, resulting in a lack of confidence in line staff.

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Priyank Chaudhari
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368 views7 pages

Case Study - 180760119011,12 (Fargo Foods)

Fargo Foods is an international food manufacturer with $2 billion in annual revenue and canning facilities in 22 countries. It has experienced 12.5% growth annually for the past 8 years. Recently, Fargo Foods implemented a matrix project management structure for construction projects but found it was not operating effectively. Key managers were interviewed to understand challenges. Replanning was seen as necessary due to initial planning being vague and ground rules changing. Additionally, selecting the best technical experts rather than managers to lead projects had been a mistake, resulting in a lack of confidence in line staff.

Uploaded by

Priyank Chaudhari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Fargo Foods

Case study by Chaudhari Priyank [180760119011] &


Chhotala Kuldip [180760119012]
Fargo Foods is a $2 billion a year international food manufacturer
with canning facilities in twenty-two countries. Fargo products include
meats, poultry, fish, vegetables, vitamins, and cat and dog foods.
Fargo Foods has enjoyed a 12.5 percent growth rate each of the past
eight years primarily due to the low overhead rates in the foreign
companies. During the past five years, Fargo had spent a large portion
of retained earnings on capital equipment projects in order to increase
productivity without increasing labor.
An average of three new production plants have been constructed
in each of the last five years. In addition, almost every plant has
undergone major modifications each year in order to increase
productivity.
In 2000, the president of Fargo Foods implemented formal project
management for all construction projects using a matrix. By 2004, it
became obvious that the matrix was not operating effectively or
efficiently. In December 2004, the author consulted for Fargo Foods
by interviewing several of the key managers and a multitude of
functional personnel.
What follows are the several key questions and responses
addressed to Fargo Foods:
Q. Give me an example of one of your projects.
• A. “The project begins with an idea. The idea can originate
anywhere in the company. The planning group picks up the
idea and determines the feasibility. The planning group then
works ‘informally’ with the various line organizations to
determine rough estimates for time and cost. The results are
then feed back to the planning group and to the top
management planning.
• If top management decides to undertake the project, then
top management selects the project manager and we’re off
and running.”
Q. Do you feel that replanning is necessary?
A. “Definitely! The planning group begins their planning with a very
crude statement of work, expecting our line managers (the true
experts) to read in between the lines and fill in the details. The
project managers develop a detailed statement of work and a work
breakdown structure, thus minimizing the chance that anything
would fall through the crack.
Another reason for replanning is that the ground rules have changed
between the time that the project was originally adopted by the
planning group and the time that the project begins implementation.
Another possibility, of course, is that technology may have changed
or people can be smarter now and can perform at a higher position on
the learning curve.”
Q. Do you have any problems selecting good project managers and
project engineers?
• A. “Yes, We made a terrible mistake for several years by selecting our
best technical experts as the project managers. Today, our project
managers are doers, not managers. The project managers do not
appear to have any confidence in our line people and often try to do
all of the work themselves. Functional employees are taking
technical direction from the project managers and project engineers
instead of the line managers

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