QUESTION 1 (30 Marks)

Procter & Gamble is a multinational consumer goods corporation with a significant presence in Africa, spanning over five decades. The company operates manufacturing facilities in several countries, including South Africa, Nigeria (previously), Kenya, Egypt, and Morocco, with distributor operations in over 45 African nations. Procter & Gamble (P&G) is a leading American multinational consumer goods corporation founded in 1837 by William Procter and James Gamble. Headquartered in Cincinnati, Ohio, P&G specializes in a wide array of personal health, personal care, and hygiene products. These products are organized into several segments, including beauty; grooming; health care; fabric and home care; and baby, feminine, and family care. In Southern Africa, P&G has established a significant presence, particularly in South Africa, where it has been operational for over 50 years. The company operates a manufacturing facility in Kempton Park, Gauteng province, which has seen substantial investments to enhance production capabilities. Notably, P&G inaugurated a cutting-edge Pampers Premium Care production line in November 2023, aligning with South Africa’s investment objectives and supporting sustainable and inclusive growth.
P&G’s operations in South Africa extend beyond manufacturing. The company exports products to neighboring countries, including Namibia, Swaziland, Mozambique, and Botswana, demonstrating the value of intra-African trade. P&G is committed to increasing small business participation in its value chains, reducing waste, developing skills, and empowering women. These initiatives underscore P&G’s dedication to contributing positively to the Southern African economy and communities.
Extracted from: https://us.pg.com/annualreport2024/an-organization-that-is-empowered-agile-and-accountable/

1.1 In the context of Procter & Gamble and any other organisation of your choice, critically evaluate the key performance indicators (KPIs) essential for assessing the effectiveness of human resource management initiatives in enhancing operational efficiency and driving organizational profitability. Support y o u r a n a l y s i s w i t h r e l e v a n t , r e a l – w o r l d e x a m p l e s a n d t h e o r e t i c a l frameworks. (15 marks)
1.2 In the context of the Fast-Moving Consumer Goods (FMCG) sector, critically evaluate and apply appropriate methodologies for redesigning job roles within manufacturing plants. Your response should analyse how these methodologies enhance both employee satisfaction and operational efficiency. (15 marks)

QUESTION 2 (15 Marks)

BrightClean Soap Manufacturing Company is a mid-sized factory specializing in producing high-quality, eco-friendly soap products. The company offers a variety of soap types, including bar soap, liquid soap, and specialty soaps infused with natural oils and organic ingredients. In one of its factories located in Xepo the firm produces 23000 units of Geisha blocks using 450 labour hours and 1200 Kg of sludge. As per the local conditions a labourer gets net payment of R20 per hour, raw materials cost R6 per kg. The other costs that have been highlighted for operations include electricity and overhead costs which are R8000 and R12100 respectively. BrightClean’s mission is to deliver sustainable, affordable, and skin-friendly products while minimizing environmental impact. The factory operates with a production line that includes raw material sourcing, mixing, molding, curing, packaging, and distribution. Raw materials like essential oils, plant-based fats, and natural fragrances are sourced from local suppliers to support community businesses and maintain product freshness. The organisation for its Hector facility, has introduced different production facilities. Method A uses 300 labor hours and 800 kg of materials to produce 6,000 units, with net labor costing R22/hour and materials costing R4/kg. Overhead costs are R6,000. Method B uses 400 labor hours and 600 kg of materials to produce 7,000 units, with labor costing R18/hour and materials costing R5/kg. Overhead is R7,000.
(As per the regional regulations all prices are quoted excluding VAT of 15%. Income tax is charged at 5.5% per labour hour) Your answers should be rounded off to the nearest 2 decimal places.
2.1 Considering the insert provided above, calculate the multifactor productivity. (5 marks)

2.2 Using the provided insert above, comment on the multifactor productivity of the two production methods.

QUESTION 3 (15 Marks)

Frosty Delight Ice Cream Manufacturing Facility is a fast-growing company known for producing premium, artisanal ice cream in a wide variety of flavors. The facility aims to balance quality and efficiency, offering both classic flavors like vanilla and chocolate and innovative ones like salted caramel and matcha swirl. The company supplies local supermarkets, restaurants, and specialty dessert shops, with a growing demand for their unique, high-quality products. As demand increases, capacity planning and utilization have become critical to the company’s performance. Frosty Delight operates with multiple production lines, including mixing, churning, freezing, and packaging stations. However, the company is struggling with underutilized equipment during off-peak seasons and overcapacity during high-demand periods like summer. These imbalances lead to inefficiencies, higher operational costs, and occasional delays in order fulfillment. One of its ice cream factories based in Mombasa operates with a production line capable of producing 1,000 liters of ice cream per hour. The factory runs for 8 hours a day, but due to maintenance and set-up times, it operates effectively for only 6 hours each day. The organization produces a variety of ice cream flavors and sells them to retailers across the country. One of their best-selling flavors is “Strawberry Bliss,” which they purchase in bulk from a supplier. The monthly demand for Strawberry Bliss ice cream is 12,000 units. The cost of purchasing a single unit of ice cream is R4.50 and the cost of placing an order with the supplier is equivalent to 0.75% of the monthly demand costs, and the annual holding cost per unit is R1.50. In light of the information provided:

3.1 In the context of the ice cream factory in Mombasa, distinguish between design and effective capacity.

3.2 Determine the EOQ for Strawberry Bliss ice cream and determine the number of orders that should be placed annually.
Assess the impact of a 6% increase in the monthly demand for Strawberry Bliss ice cream on the EOQ and the number of orders. Recalculate the EOQ and the number of orders under these new conditions.

QUESTION 4 (20 Marks)
A manufacturing company, “TechPro,” is considering two different production strategies for its new smartphone model. The company has identified three potential market conditions for the product: Strong Demand, Moderate Demand, and Weak Demand. Each condition has different probability and financial impacts on the production strategies. Strategy A (Low-Cost Production): This involves setting up a low-cost production line that can produce 10,000 units per month. However, it has limited flexibility to adjust production levels quickly in response to changes in demand. Strategy B (Flexible Production): This involves investing in a more flexible production line that can adjust production levels quickly but at a higher setup cost.

Strategy A Setup Cost: R200,000 Strategy B Setup Cost: R400,000
Using the information provided above, compute the Expected Monetary Value (EMV) for each proposed production strategy and identify which option offers greater financial viability. Additionally, create a decision tree diagram to visually represent this analysis and support your recommendation.

QUESTION 5 (20 Marks)

Nike Inc. is one of the world’s largest and most recognized companies in the athletic footwear, apparel, and equipment industry. Founded in 1964 and headquartered in Beaverton, Oregon, Nike has built a powerful global brand known for its innovation, design, and marketing excellence. The company serves millions of customers worldwide, offering a wide range of products for sports, lifestyle, and performance. One of the key factors behind Nike’s success is its highly complex and extensive global supply chain. Nike’s supply chain spans across multiple continents, involving a vast network of third-party manufacturers, suppliers, distributors, and retail partners. The company sources its products from more than 500 factories located in over 40 countries, with a heavy concentration in Asia, including countries like China, Vietnam, and Indonesia. This approach enables Nike to leverage cost advantages, access specialized manufacturing capabilities, and maintain scalability to meet global demand.
You have recently been appointed as the Operations Management Executive at Nike, tasked with recommending changes and improvements to the company’s supply chain processes. As part of this effort, you have undertaken an exercise to visually map Nike’s global supply chain network. Prepare a presentation for your team outlining your findings, and additionally, evaluate the potential impact of policies introduced by the Trump Administration on Nike’s supply chain operations and overall business strategy.

Answers to Above Case Study Questions

Expert Answer 1: Human resource management plays an important role in enhancing the operational efficiency and driving organisational profitability. It is however important to evaluate the effectiveness of Human Resource Management practices and this can be done through the application of certain key performance indicators. In the given case study of Procter & Gamble, the important key performance indicators essential for assessing the effectiveness of human resource management initiatives are analysed as follows:
Employee productivity rate: The employee productivity rate is an important indicator in evaluating the effectiveness of HRM practices as higher productivity implies quality HR policies operational within the organisation. In the case of Procter & Gamble, the introduction of pampers premium carry production line indicates the effectiveness of HR investments in technical training that resulted in higher productivity levels.
Absenteeism rate: Absenteeism rate is also an important key performance indicator in evaluating the effectiveness of HRM practices within an organization. To understand how absenteeism rate shows the effectiveness of HRM practices at Procter & Gamble, connect with our human resource management experts in South Africa.

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