Operational Management Assignment : Kudler Fine Foods

Introduction

Kudler Fine Foods is presented in the virtual organization portal of the University of Phoenix MBA 502 rEsource page (2008). Kudler fine foods is a specialty food store located in the San Diego metropolitan area. It is a one-stop food shop with the finest selection of very best foods and wines at reasonable prices. The shop offers wide range of products such as fresh bakery items, fresh produce, meat, seafood, condiments and packaged foods and specialty dairy products. Within five years Kudler Fine Foods company had expanded to three branches (University of Phoenix, 2008). Recently, Kudler plans to start contracting with local growers of organic produce. This paper identifies the business processes at Kudler that could be affected by this decision and it also describes how the supply chain would be affected.Then,it explains the different quality control tools and performance standards that kudler need to implement to ensure the effectiveness of its operations.

Business processes at Kudler

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, 2005). Understanding how processes work is essential to the competitiveness of a company (Chase, Jacobs & Aquilano, 2005).

The different processes that would be affected are Purchasing, Inventory and delivery planning. At present at Kudler, there is no purchasing department. The department managers of each store determines the product requirements for his or her department and places the purchase orders directly with suppliers. The department managers are solely responsible for getting the best price and quality on their purchases.

In this case when it is brought from different local growers, it would be difficult to maintain the same quality and price. A problem from the processors and manufacturers perspective is the variability in quality of organic food (Knudson,2007).Because of this reason the price would also vary. The customers always expect good quality at a minimum price.Sometimes, it would be difficult for the department managers to find out the best price which should also matches with the other Kudler stores.

Since the suppliers are local growers,a make-to-order process will be followed to keep the inventory costs minimum.Because of this make-to-order process,the inventory has to made regularly, to maintain that no products are out of stock.In multi-period single-item order release and scheduling problem is considered in which the delivery schedule of the orders is determined through the planned lead times, and the capacity loading decisions are separated from the order release decisions in a way so as to plan for on-time deliveries. Early or late delivery of the orders, which are released and delivered in batches, significantly affects the inventory costs ( Selc,Fransoo,de Kok,2006).

Supply Chain Management

The term Supply Chain comes from a picture of how organizations are linked together as viewed from a particular company. The idea is to apply a total systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer(Chase, Jacobs, Aquilano, 2005).

Since kudler changed its policy to contract local growers, there will be increasing concern about how the supply chain would be affected. It would be a great challenge for kudler in fixing the prices. Although kudler has decided for local growers, it still has some disadvantages.

Growing crops without chemicals requires more man power to cultivate the crops, and cheap labor is readily available in developing countries. The European Union directly subsidizes farmers to grow organic crops, which is a big advantage for the stores in Europe.

Quality control tools and Performance Standards

Top management must make improvement in productivity a strategic objective of the firm. It must also be sure that managers from different areas of the firm work together to increase

efficiency(Gomez-Mejia & Balkin, 2002).

Consumers always prefer products of a consistent quality, and maintaining consistent quality is more difficult in producing organic foods than it is in producing food from conventional methods(Knudson,2007). The use of chemical fertilizers and pesticides not only increases yields but also improves consistency. Those organic producers and processors that can adequately address the issue of consistency will possess a competitive advantage(Knudson,2007).however these products has to be quality checked before it is delivered to the customers.

Quality management is defined as a planned and systematic approach to the verification of compliance with processes and their associated procedures and standards. The another purpose of this process is to constantly check the quality of the products. It also determines to what extent the organic growers are following the quality standards as agreed.

Quality Management is concerned with the formulation of more general quality policies, monitoring downstream process improvements, including the quality of the processes themselves and the triggering and progress-measuring mechanisms for process improvement. Total quality management, kaizen, just-in-time, and process reengineering are four methods of managing quality. Kudler should implement Total quality management(TQM) to improve its quality and improve the performance standards.

Total Quality Management

Total quality management (TQM) has been described as “a total commitment to quality and attitude expressed by everybody’s involvement in the process of continuous improvement of products and services, through the use of innovative scientific methods(Gomez-Mejia & Balkin, 2002).The steps that