Students, Firms Seek Solutions
It was the case of the missing milk crates that led Stephen Schaffer of Alta Dena Certified Dairy to the executive MBA classroom at Pepperdine University. He wasn’t looking for the crates -- or for a degree. He was looking for solutions.
Alta Dena loses a million of the heavy-duty plastic crates each year to theft or misplacement, said Schaffer, general manager of the City of Industry-based dairy. It wasn’t sure why or how.
The problem adds up to more than just milk money. Alta Dena spends about $4.5 million each year to replace the crates it uses to tote its dairy products to supermarkets and food service clients. It’s an industrywide problem.
The students in the MBA class, many of them working professionals, are part of Pepperdine’s Education to Business program, which provides free business consulting to local companies.
“We said, ‘We’ve got nothing to lose, and let’s see what some very bright minds, who don’t have preconceived notions about the dairy business, might come up with,’ ” said Schaffer, also a vice president of the dairy, a unit of Dean Foods Co. of Dallas.
Alta Dena is one of dozens of companies that have taken advantage of the free business consulting offered by Pepperdine in Malibu as well as Loyola Marymount University in Los Angeles.
Others “clients” of the two programs include a local unit of Raytheon Co.; Fluor Corp., which recently completed its relocation from Aliso Viejo to Texas; and smaller companies such as Tibetan Tea of South Pasadena and Guerra Plumbing of Los Angeles.
The businesses need fresh insights. The students need a chance to apply their knowledge and skills in a real-life setting.
For both groups, said Pepperdine program director Doreen Shanahan, “their needs are solutions to each other.” Shanahan, who founded the program in 2002, is a former sales and marketing executive at Coca-Cola Co.
She screens companies for participation in the school’s program, which includes students from the full-time master of business administration track and the part-time executive MBA program.
Each trimester, students compete in teams to find solutions for their corporate clients.
Reduced revenue, increased competition and declining markets are some of the issues they might tackle. Conversely, rapid growth is the challenge at some companies. For Alta Dena, it was the financial drain of the lost crates.
Student teams, after meeting with Schaffer and other managers and visiting the dairy, came up with a variety of suggestions.
Some students recommended tagging the cases with radio frequency identification tags, computer chips or bar codes. Others suggested launching a public awareness campaign that explained how expensive the crates are, at $4.50 each, and how the cost of the losses is passed on to customers.
“A couple of them came up with, interestingly enough, conspiracy theories,” Schaffer said.
The students speculated that the crates were being stolen to be sold illegally to regrinding operations that could sell the plastic resin to manufacturers. It’s a possibility the dairy itself has considered.
“The bottom line is there were some very, very useful suggestions, some of which we have already acted on,” Schaffer said.
Useful solutions are the goal of Shelly Automotive Group of Irvine, which has just started the MBA case project process at Pepperdine.
The family business started with a BMW dealership in 1990. It now has five dealerships and 600 employees. Michael Chadwick, vice president and director of operations, wanted to glean insights into how to move the entrepreneurial organization to a more corporate environment that could support further growth.
“We didn’t see this as an end-all, cure-all solution to problems,” he said. “But we saw it as absolutely one of two or three different pieces that we can lay over this process.”
Loyola Marymount’s eight-week summer executive consulting project is run by faculty advisor and management consultant Rick Jones. He divides the class into groups, each of which tackles problems at a different company.
The program was started by Jones and Bill Lindsey, the assistant dean, six years ago, when the university launched its executive MBA degree. In keeping with the Jesuit school’s philosophy of outreach, the program focuses on small, minority-owned companies.
Jones works with the Los Angeles mayor’s office to find companies suitable for student teams.
“We really stack this so there is absolutely a benefit to both the students and the clients,” he said. “The university’s reputation is at stake.”
Just as in the workaday business world, not all the student consulting projects have a happy ending. At least one of the 18 companies that have worked with the Loyola students would not accept the final report of their recommendations, after asking for and receiving a preview.
The school chalks it up as an appropriate learning experience.
“The primary focus has to be on learning for our students because you can even learn from bad experiences,” Lindsey said.
El Dorado Mexican Food Products, a Los Angeles-based tortilla maker, provided a happy ending for the student consultants.
The students offered suggestions for how to code orders and reconfigure the manufacturing process to be more efficient, among other recommendations.
A year later, the company is still referring to the thick handbook the students compiled.
One of those students is Robert Villanueva, 44, a public relations executive at Boeing Co. in Huntington Beach who hopes to start his own business someday. He is enthusiastic about the experience.
“As students we put our heart and soul in this,” Villanueva said. “We were not getting paid, but we wanted to make a difference with these companies.”
Cyndia Zwahlen can be reached at cyndia.zwahlen @latimes.com.
