Operations And Logistics

Running Head: Operations and Logistics Issues at Kudler Fine Foods

Operations and Logistics Issues at Kudler Fine Foods

Philip A. Jones

University of Phoenix

BSA 502

MISD0621

Dr. Ronald Black

September 18, 2006

Introduction

Kudler Fine Foods has several important issues in terms of Operations and Logistics. This paper will examine and analyze those issues and make any necessary recommendations on enhancements or improvements that could make the company more profitable in the foreseeable future. This paper will review Quality Standards, Operations Management Systems, Supply Chain Methodology, The distribution process, and finally Enterprise Resource Planning.

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 department stores 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.

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%, which means than 95% of the time that a customer will find merchandise available in a store and 5% of the time there will be no merchandise due to a previous stock-out.

Supply Chain Methodology and the Distribution Process

Kudler Fine Foods stores strive to provide total customer satisfaction, and this is done by offering a varied selection of gourmet foods as they become available. Kathy sees it as significant to identify new gourmet items that can be sold in her stores and she does this by monitoring gourmet food stores, conventions and web sites. Once she finds some new samples, Kathy introduces them at her operations review meetings and allows her managers to give their opinions on the new product sample. There is then a decision made as to what the current