MGT Case #1 Read and Response

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Jun 10, 2024

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CASE #1 Green Manufacturing and Sustainability at Frito-Lay Frito-Lay, the multi-billion-dollar snack food giant, requires vast amounts of water, electricity, natural gas, and fuel to produce its 41 well-known brands. In keeping with growing environmental concerns, Frito-Lay has initiated ambitious plans to produce environmentally friendly snacks. But even environmentally friendly snacks require resources. Recognizing the environmental impact, the firm is an aggressive “green manufacturer,” with major initiatives in resource reduction and sustainability. For instance, the company’s energy management program includes a variety of elements designed to engage employees in reducing energy consumption. These elements include scorecards and customized action plans that empower employees and recognize their achievements. At Frito-Lay’s factory in Casa Grande, Arizona, more than 500,000 pounds of potatoes arrive every day to be washed, sliced, fried, seasoned, and portioned into bags of Lay’s and Ruffles chips. The process consumes enormous amounts of energy and creates vast amounts of wastewater, starch, and potato peelings. Frito-Lay plans to take the plant off the power grid and run it almost entirely on renewable fuels and recycled water. The managers at the Casa Grande plant have also installed skylights in conference rooms, offices, and a finished goods warehouse to reduce the need for artificial light. More fuel-efficient ovens recapture heat from exhaust stacks. Vacuum hoses that pull moisture from potato slices to recapture the water and to reduce the amount of heat needed to cook the potato chips are also being used. Frito-Lay has also built more than 50 acres of solar concentrators behind its Modesto, California, plant to generate solar power. The solar power is being converted into heat and used to cook Sun Chips. A biomass boiler, which will burn agricultural waste, is also planned to provide additional renewable fuel. Frito-Lay is installing high-tech filters that recycle most of the water used to rinse and wash potatoes. It also recycles corn by-products to make Doritos and other snacks; starch is reclaimed and sold, primarily as animal feed, and leftover sludge is burned to create methane gas to run the plant boiler. 2 There are benefits besides the potential energy savings. Like many other large corporations, Frito-Lay is striving to establish its green credentials as consumers become more focused on environmental issues. There are
marketing opportunities, too. The company, for example, advertises that its popular Sun Chips snacks are made using solar energy.At Frito-Lay’s Florida plant, only 3.5% of the waste goes to landfills, but that is still 1.5 million pounds annually. The goal is zero waste to landfills. The snack food maker earned its spot in the National Environmental Performance Task Program by maintaining a sustained environmental compliance record and making new commitments to reduce, reuse, and recycle at this facility. Substantial resource reductions have been made in the production process, with an energy reduction of 21% across Frito-Lay’s 34 U.S. plants. But the continuing battle for resource reduction continues. The company is also moving toward biodegradable packaging and seasoning bags and cans and bottles. While these multiyear initiatives are expensive, they have the backing at the highest levels of Frito-Lay as well as corporate executives at PepsiCo, the parent company. Link to the video: https://mediaplayer.pearsoncmg.com/assets/fl_green_production Discussion Questions 1. Why do Frito-Lay’s stakeholders have an interest in reducing the firm’s environmental footprint? - Stake holders have interest in reducing the firm’s environmental impact because for doing so help bring overall overhead cost down. This happens by using natural light, using less power from the grid, and reusing and recycling material. Another reason is that as consumer become more focused on environmental issues, they tend to purchase product from companies that care about environment and focus on going green. 2. Identify the specific techniques that Frito-Lay is using to become a “green manufacturer.” - Frito-Lay is reusing and recycling packaging material and other plastic waste. They are also focused on recusing or selling byproducts that are made during their product manufacturing. Frito-Lay is also using renewable sources of energy and trying to use more natural lighting. 3. Select another company and compare its green policies to those of Frito-Lay.
- Another company that I can think of is Apple. Apple’s goal is to go carbon neutral and the way they are doing it is not giving out charger cutting out packaging material and recycling their products. 4. What other changes could Frito-Lay make to increase sustainability in its processes and physical facilities? - Frito Lay is already on a great path and taking mostly all the steps they can in order to go green. Another thing they can do is come with packaging material for their products that uses less plastic or uses some type of material that degrades faster. This is because even though they recycle their material, most of the material ends up in streets or trash where it doesn’t get recycled. CASE #2 Product Design at Nautique Boat Company For nearly 100 years, Florida-based Nautique Boat Company has built innovative boats in a very competitive market. Nautique, as the premier boat for waterskiing, wakeboarding, and wake surfing, is on the cutting edge of style, customer satisfaction, and performance. There is continuing and rapid change in this industry, which sees substantial input from imaginative, experimenting customers. Success means integrating customer feedback, technological change, and creative engineering talent into a dynamic, but ongoing, product line. As number one in its market, Nautique is a vivid example of what it takes to be a creative leader. From the introduction of waterskiing in the 1920s to barefoot skiing to wake boarding in the 1990s and wake surfing in the 2000s, Nautique has led. While these new sport expectations were placed on boat performance, changes in marine engineering and technology were also taking place. Ski boats were initially made of wood, changing to fiberglass in the late 1950s, with tracking fins added in the 1960s. The 1990s brought longer and wider boats with hull changes, slopping transoms, spray relief, and flight control
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