WORKSHOP BUSINESS GROWTH STRATEGY

THE 5 ESSENTIAL OF PLANNING

MINIMIZATION INPUT
- The Johnsonville Sausage Co. was based in
1.
Johnsonville, Wisconsin, a small town about 60 miles
Understandi north of Milwaukee. In 1945, when Ralphs parents
ng
purchased it, the company was a rural meat marketa

family home with a storefront, a sausage kitchen, and a

slaughter shed and smokehouse out back. The family
opened retail food stores between 1946 and 1952. They
bought livestock from local suppliers, slaughtered the
animals, and sold meat in the three retail stores. He also
made fresh sausage, which had acquired an excellent
reputation in the area.
- The wholesale business looked more promising and the
management decided to focus their efforts on building
this segment of the business. The management built the
companys wholesale business, return on equity climbed
from 18% to 27%, and the debt-to equity ratio between
55% and 65%.
Products
Johnsonville Sausages product line consisted of three
types of sausage, which in total accounted for
approximately 120 different items:

Fresh sausage : Made from

freshly butchered pork and beef cuts. Fresh products
had a shelf life of approximately three weeks.
Smoked sausage : A sausage
made in the same manner as a fresh sausage, but to
which nitrites were added as a cure. The sausage
was then cooked for two to four hours in a hot oven
with smoldering wood chips to impart a smoked
flavour. Smoke sausage had a shelf life of
approximately two months.
Semi-dry sausage: Semi-dry
sausage, also called summer or slicing sausage, was
made like a smoked sausage but was cooked for there
or four days. It was typically much larger than an
average sausage and could be sliced like a salami.
Semi sausage had a shelf life of at least four months.
Product varieties within each of
these three categories were created by varying the
species, the link length and the casing.

Production
-

The processing plants ran on a

two-shift basis. Fresh meat was delivered to the plant
by 10:00 p.m., when the first shift began to turn this
meat into sausage filler : meat was ground and spices
and flavourings added. At 6:00a.m, the second shift
arrived and began making sausages by stuffing
casings with this mixture.
The sausage meat was emptied
into a large hopper and was extruded by machine into
the casing.
For fresh sausage, the link were
then placed by hand on Styrofoam trays, flash frozen,
wrapped in cellophane packages, and packed in boxes
to be shipped.
For smoked or semi-dry sausage,
the link were placed in the smoke-house and
cooked/smoked for a time with a seasoned wood.
The process was somewhat
capital intensive since large, mechanized equipment
was used to grind the meat, stuff the sausage, and
freeze the links. The cost breakdown of an average
pound of sausage was a follows :
a. raw materials

58%

b. direct labour

4%

c. manufacturing overhead

20%

d. sale and marketing

9%

e. warehouse/distribution

3%

f. contribution to corporate

6%

Overhead and profit

100%

- Inventory was kept at a minimum- two days or so- and

all products were made in a response to customer orders.
During summer months, fresh sausage was extremely
popular, particularly the bratwurst for which the company
was famous in Wisconsin.
- Fresh bratwurst was the product most responsible for
Johnsonvilles growth; brats were sold at the
Milwaukee Brewers stadium and were extremely

popular. In fact, several annual polls of sportswriters and

broadcasters revealed that Johnsonvilles bratwurst was
the favourites stadium food available anywhere.
- In addition to publicity like this, the firm inaugurated a
TV at campaign in 1981 that focused on the brat fry as
a social event.
- First, performance is key. And in a well-developed
system, there is no conflict between what is the best for
the company and whats best for the individual.
- The second element is the idea that people do need
help to accomplish their objectives, and that this is the job
of management. We can help them by defining very
carefully what their job is, defining explicitly what the
performance standards are, and giving them the resources
they need.
- Over the years, as new functions in the organization
were articulated, Russ also assumed responsibility for the
following areas :
a. Engineering (developing plans for new plant and
equipment)
b. Research and Development (USDA testing,
packaging, product and process development)
c. Purchasing (buying meat, spices, and packaging)
d. Personnel Development (education and training)
- Each Monday, production schedules for the coming
week were developed by the plant coordinator. These
schedules set daily production volumes. Required
production targets then cascaded back to create
production goals for each area (grinding, mixing, stuffing,
packing, and so on).
- Manufacturing performance was evaluated against
budget. On an annual basis, beginning each fall, two or
three line workers form each area within manufacturing
became part of a budget team, together with people from
sales and accounting. Working with the sales force, the
line workers developed a sales forecast for the coming 12
months, by product line. They line developed budgets and
set goals for certain key measures, including :
a. Labor efficiency (pounds of sausage per manhour)
b. Yield (pounds of meat used per pound of sausage
produced)
c. Labor cost (dollar of labor per pound of sausage)
- Workers collected the data required to measure their
progress toward these goals and analysed and posted

results versus budget on a monthly basis. Daily figures

for yield, efficiency and cost were produced.
- During his first year, the management concentrated on
rebuilding distressed customer relations; building a
management team with specific responsibilities, adding
performance measures and accountability; establishing a
marketing and administrative structure, including internal
and external information systems; and initiating an entrylevel training program. The management also developed
the product line in response to suggestions from retailers
and the sales force, and he reduced operating expenses.
Transition of Management
- Before Johnsonvilles transition, the research and
development area was not formally delineated in the
organization; Ralph worked on his own ideas. Now R&D
was viewed as everyones responsibility. One of the
companys recent, and successful, new products, Beer n
Bratwurst, was developed by a team within the
company. The bratwurst was made with beer, instead of
the water, to replicate the flavour that many brat fans
achived by soaking the product in beer. The idea came out
of a brainstorming session held during summer 1984.
Together with individuals from the sales and research
areas, this team tested and refined the product, which was
introduced six month later.
1. Meningkatkan penjualan tahunan 25% dengan
meningkatkan bisnis grosiran ke Palmer

2. Setting
Objective

3.

2. Inovasi Produk untuk produk Sosis Category Fresh

yang memberikan kontribusi besar
3. Mengoptimumkan proses produksi untuk mecukupi
peningkatan sales 25%

4. Membuat kontrak dengan Palmer selama 1

tahun/jangka panjang, untuk menghindari pemutusan
kontrak sepihak di tengah jalan.
Formulating 1 . Mengembangkan variant produk yang lebih inovatif
dan tidak hanya berdasarkan pesanan dengan
Strategy
memaksimalkan fungsi R& D .
2. Mencari sumber bahan baku berkualitas sama dengan
harga yang lebih murah ( untuk daging , bumbu dan
kemasan )
3 Mengoptimalkan Produksi dengan Efisiensi tenaga
kerja dan meningkatkan yield

4 Melakukan kegiatan promosi secara kontinyu untuk

meningkatkan awareness terhadap Johnsonvilles Sausage
5 . Mengembangkan human resources dengan membuat
struktur organisasi, job description yang jelas , system
rewarding dan training untuk karyawan.
6. Meningkatkan produksi 25% dengan penambahan jam
kerja 20 jam selama 1 minggu .
1 minggu = 16 jam x 5 hari = 80 jam (jam kerja normal)
25% dari 80 jam = 20 jam /minggu
Promotion :
Membuat iklan TV yang berisi produk- produk Sosis
Johnsonville

4. Creating
Program

5. Organizing
Team

Membuat event- event promosi untuk membangun image

Sosis Johnsonville antara lain lomba makan sosis.
Membuat suatu tempat kumpul komunitas eksklusif Ibuibu rumah tangga sekaligus memfasilitasi dengan arena
bermain anak2. Dan juga mengedukasi bahwa sosis
merupakan makanan yang bergizi tinggi.

1. Melakukan kontrak kerja sama jangka panjang dengan

perusahaan pizza ,Hotdog Toko Roti yg punya jaringan di
berberapa kota besar untuk menggunakan sosis dari
Johnsonville
2. Membuka Restoran khusus dengan menu-menu dari
Sosis Johnsonville yang lengkap dengan area bermain
anak / taman bunga.

Dari Team 4
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