Kudler Fine Foods Operations Management

Introduction

Kudler Fine Foods has several important issues in terms of its operations management. Kudler Fine Foods has made the decision to start contracting with local growers of organic produce. This will affect Kudler Fine Foods in many ways. This paper will identify those business processes at Kudler Fine Foods that could be affected by the change. It will also touch on Kudler Fine Foods supply chain and describe the quality control tools and performance standards that Kudler Fine Foods would need to put in place to ensure the effectiveness of its operations.

Business Processes

A process is any part of an organization that takes inputs and converts them into outputs that, it is anticipated, are of superior value to the organization than the original inputs (Chase, Jacobs, Aquilano, pg 154, 2005). Understanding how Kudler Fine Foods processes work is vital to their business (Chase, Jacobs, Aquilano, 2005). There are many factors management needs to consider when setting up a process (Chase, Jacobs, Aquilano, 2005). Some of the processes related to this new change are purchasing, quality control and standards, inventory management and operations systems.

Quality Control and Quality Standards

One important aspect of operations and logistics is purchasing. Although there is no purchasing department in any of the Kudler Fine Foods' stores, standard purchasing procedures are in place. Each of the three departments from each store determine requirements for the items sold and their department sells and places purchase orders directly with suppliers using a purchase order form that is standard between the three stores. The Department Managers' responsibility is to then obtain the best price, quality and delivery possible. Since quality can be defined as consistently producing what the customers wants while reducing errors while the customer is awaiting delivery, there needs to be a Quality Control Unit at Kudler Fine Foods to test the orders and ensure that purchases go as defect free as they possibly can. There needs to be a quality control benchmark in place so that the correct protocol will be followed. Six Sigma would be a good fit for Kudler Fine Foods as a quality and performance initiative measure (Chase, Jacobs, Aquilano, 2005).

Operations Management Systems

Advertising is done in local newspapers for Kathy Kudler and offered in all three stores at the same time. Kathy confers with her store managers and ensures that the proper inventory levels are on hand and transfers merchandise from one store to the next if necessary. Excess inventory is always a concern since it represents company monies being tied up in merchandise than is no longer generating income. The department managers are responsible for the maintenance of these inventory levels. Kathy has a policy of ensuring that adequate inventory levels be maintained to assure that stock outs do not occur more than 2-3 times per year. The customer service level of 95%, means that 95% of the time a customer will find merchandise available in a store and 5% of the time there will be no merchandise due to an out of stock situation.

Supply Chain Methodology and the Distribution Process

Kudler Fine Foods makes every effort to provide customers with total satisfaction. This is done by offering a varied selection of gourmet foods. The latest offering will include organic products produced by local growers. Kathy endeavors to identify new gourmet items which might be sold in her stores. She does this by monitoring gourmet food stores, going to conventions and visiting the competitions web sites. Once she finds new items, Kathy introduces them to her staff during her operations review meetings and allows her managers to give their opinions of the new product. There is then a decision made as to what the current selling price per item should be and how best to move the product from point A to point B.

Enterprise Resource Planning

Enterprise