Operations Management at Kudler Fine Foods

Table of Contents

i. Introduction.

ii. Business process affected and how they would be affected.

iii. Effects on Kudler's supply chain

iv. Quality control tools and performance standard needed.

v. Conclusion.

vi. References.

Introduction

Kudler Fine Foods founded by Kathy Kudler in 1998 to provide ingredients needed for gourmet meals in one location. Kathy began the company with one store, which turned a profit in the first year. The company now consists of three stores in different cities of California. The organization and culture at Kudler focuses on the customer and the employees. Based on it success in the business, Kudler intends to contract with local growers of organic produce, and in doing so bypasses the old method of purchasing their produce. If you don't see it, let us know and we will special order the item for you. (Kudler) Based on this idea, one can conclude that previously, Kudler goes through middlemen to purchase their products and to special order a produce requires you to have access to a large produce house that carries all the products needed such that an order can be placed and delivered immediately. " A process is any part of an organization that takes inputs and transforms them into outputs that, it is hoped, are of a greater value to the organization than the original inputs", according to Chase (2006). The new process of purchasing must be able to fit this definition and the results also must be noticeable in the outputs.

Business process affected and how they would be affected

The business process that would the affected would be the purchasing department. Purchases for goods and services are limited to approved vendors. (Kudler) Kudler had developed a list of approved vendors that they have conducted produce business transactions with over the years and now that they want to but directly, Kudler's mode of operation must change. Previously, Kudler Purchasing Function receives the sales data from each location at the end of each shift. The sales data is combined, the applicable inventory accounts are credit, and the business rules determine if a purchase order should be submitted.

Now, that Kudler buys directly, they need to have a modify the business rule concerning business order. Produces are seasonal, so in order to have all year long fresh produce, storage methods have to come into play. Failure to develop a fully functioning storage system can lead to a loss in terms of perishable inventory in terms of the produce. The purchasing unit now requires a knowledgeable agriculturist that helps them in their decision-making as far as the produce purchase is concerned. The quantity discount purchases and the number of days since last order no longer applies to the business rules created. The business rules for Kudler include but are not limited to: Quantity of inventory on hand, Quantity discount purchases, Number of days since the last order. (Kudler). Inventory at hand can be looked upon as to that which they now have in their storage that was previously purchased, but the quantity discount purchases given to them previously by their vendors no longer applies that they no but directly. Decisions are made on what merchandise to continue and discontinue selling. (Kudler) The decision-making on this part would be more difficult to make now, that they buy in large quantities for storage to maintain freshness and continually be in the season to sell any produce to their customers as promised. There would be an increased cost in terms of energy use and maintaining the contents of the storage, which was not previously used.

Effects on Kudler's supply chain

" The term supply chain comes from a picture of how organizations are linked together as viewed from a particular company", according to Chase (2006). ". the linkage between suppliers that provide inputs, manufacturing and service support operations that transforms the input into products and services and the distribution and local service providers that localize the product". According to Chase (2006). This is of concern to many businesses today the way their they setup and manage their supply chain operations. "Dell computer, for example, skips the distribution and retail steps typical of a manufacturing company's supply chain. Dell takes orders for its computers from customers over the internet and manufactures directly to the orders." According to Chase (2006). In doing so, they were able to reduce the cost of operation associated with the steps mentioned. The supply chain at Kudler would change to buying directly, which in turn reduces the checks and balances put in place for the supply chain. The business rules at work at Kudler are: Recommended by the Purchasing Function, Approved by the President, Input by the Purchasing Function, Tested by the Purchasing Function and Management and Reviewed periodically. (Kudler) The purchasing entity at work previously must now work with the agriculturist and then used their sales projections to perform the previous purchasing function. The approval process from the president would no longer be necessary in that they have an expert on the subject matter in place-agriculturist. The suggestions and ideas given by the subject matter must be reviewed periodically and tested often to make sure that it is meeting the business goal set