Kudler Fine Foods

KFF Operations Management

Kathy Kudler established Kudler Fine Foods in 1998. Her vision was to establish her own gourmet food store and offer a wide selection of fine meats, produce, chesses and wine that are not available in local neighborhood food stores. Kathy opened her first store in La Jolla, California. The success of her La Jolla location had allowed her to open two additional stores in Del Mar and Encinitas, California. In their process for expansion and in their quest to provide the finest foods, KFF has decided to begin contracting with local growers of organic produce to provide fresh organic produce in KFF stores. This paper will examine the changes that this decision will bring on KFF business processes, supply chain activities, and quality control system.

Business Processes

Purchasing and inventory management will be two processes that will initially affected by the decision to contract local growers. Currently, KFF does not have a purchasing department; however, standard purchasing procedures are in place. Store managers at the three KFF locations are responsible for purchasing and determining when and how much and which supplier to purchase from in order to keep the shelves stocked. By contracting local organic growers, KFF would be able to consolidate their purchasing.

This process has the potential to give KFF more purchasing power and which could enable them to bargain and lower their produce supply cost and in turn provides better prices to KFF customers. On the other hand, if KFF contract only local growers instead of growers in other states or countries, if the supply of local organic produce is reduced and the number of organic growers become limited it could cause overall rise in price and could end up costing KFF more money.

Delivery will also be other process that may be affected. A constant and accurate delivery process will need to be established with the local growers. This will enable KFF to have fresh food available at the right time to reduce excess inventory and minimize the amount of fresh produce that could go bad.

Supply Chain

According to Chase, “supply chain management is a hot topic in business today” (Chase, 2005, pg. 406). Supply chain management applies a total systems approach to managing the flow. This allows information to be communicating a need for materials or supplies, and services from suppliers through factories and warehouses to the final customer (Chase, 2005). Because organic produce production is at most time determined by seasons, maintain accurate estimates or forecasting for specific produce is a complicated task for Kudler. KFF prides itself in providing fine food and produce so it would be beneficial that they run and a Just in Time (JIT) and First in and First out (FIFO) supply chain process. “In a JIT system, the firm’s inputs are kept at the lowest level possible. Inputs arrive at the organization when, not before, they are needed” (Gomez-Mejia, 2002, pg. 378). Enabling an efficient JIT supply chain management process that is customized to KFF will be beneficial for KFF. This will reduce spoilage and supplying concerns as well as inventory cost. In addition to this, contracting local grower will allow KFF organic supplier to be in a closer proximity. This could have a positive effect by lowering shipping and transportation cost and allowing supply will be readily available to Kudler when needed to replenish stock.

Quality Control Tools