Operations Management: Kudler Foods

Running head: Operations Management: Kudler Foods

Operations Management: Kudler Foods

University of Phoenix

Abstract

Kudler Fine Foods is leading the way in the local gourmet food market; pairing food with good experiences has proven success. In order to add to this success, Kudler is adding organic produce from local growers. Fully developing this opportunity will include updating the marketing process as well as updating the current purchasing process by fully utilizing the purchasing manager in order to streamline the supply chain. This streamline process will include Kaizen ideas as well as a just-in-time inventory supplied directly from the field. Doing will increase the overall value of Kudler to the market in which they operate.

Operations Management

Buy organic! That seems to be the mantra of the day and a growing trend. The benefits of organic foods have been studied by the US Department of Agriculture and the US food and Drug Administration. These studies have shown that organic foods contain on average 30% more anti-oxidants than conventionally grown food (Hancock 2007). The benefits of choosing organic foods have caught on and Kudler Find Foods does not plan on letting those benefits pass them by. In order to make the most of the organic market, Kudler will need to look at their marketing plan or processes and purchasing process, identify weaknesses in their supply chain and implement new quality controls in order to see success.

Business Processes at Kudler

Kudler Fine Foods has seen success. They have expanded from one location to three. They have shown growth in each market as well as gained customer loyalty. They have developed a strong marketing plan set at identifying their company with the issues of self-actualization in Maslow’s Hierarchy of Needs by offering value added services like cooking classes with celebrity chefs, frequent flyer miles for purchases and other high end perks, but is something missing from their marketing process? Yes! Organics.

The pinnacle of a marketing plan that relies on self actualization motivators in the grocery business is organics. The super markets supply the basic need, food. Kudler will supply a higher need, organic food. Organic food expresses that not only do people need to eat; they need to eat well, recycle, save farmland and feel good about themselves doing it. This is not said to be trite, only to show that the marketing process will need to be adjusted to enter this market. According to the text, “a process takes inputs and transforms them into outputs that, it is hoped, are of greater value to the organization than the original inputs” and by adding the input of organics to the marketing plan, Kudler will arrive at a well rounded output (Aquilano, Chase and Jacobs 2006). Adding organics to the marketing plan will bring the overall product of Kudler Fine Foods to a new level by incorporating locally grown specialty items, benefiting the community around them. This benefit comes only if they can streamline the process of purchasing from the local suppliers.

The current purchasing process at Kudler is a little vague. The organization has a purchasing manager in place as well as a purchasing assistant, yet the purchasing for the stores is done by the “each of the three department managers” and Kathy Kudler herself. While this creates a specialized department unique to each store, it will be difficult for those department managers to go out and create relationships with local growers. Another problem in the process is that the system is set up on a purchase order plan and local growers work on a cash basis. The purchasing process works for major distributors but when branching to local growers, the current process will not be efficient.

The current process requires the department managers to locate the best price, develop relationships and ensure that they are checking with other departments in order to not over order any one specific product. This is all done while trying to maintain their individual departments. Kudler will need to implement a purchasing process that utilizes the purchasing manager and her assistant in order to focus solely on purchasing.

Using these members of the organization would help develop relationships with grower that would open communications into purchasing, streamline ordering, and ensure uniformity in the product purchased for all the stores. Currently Kudler has a walking paper system in place every time a purchase is made. Forms pass from one department to another through the process. An effective purchasing manager would also streamline purchases through one department limiting the cycle time that it takes from identifying the need for a product to purchasing that product and having it on the shelf. According to the marketing plan these process are in the works, but would need to be solidified prior to moving toward the local organic market. This ties into the overall quality of produce at Kudler as well as how the supply chain works.

Supply Chain at Kudler

Currently the supply chain at Kudler involved various suppliers all getting purchase orders through a variety of methods ranging from faxes to e-mail. Suppliers range from local distributors on a cash only basis to foreign markets and specialty items purchased by Kathy Kudler. In order to move into the local organic supplier business, the purchasing manager would need to create a supplier relations program. This has been done at Kudler, but the question is has it been done with the local grower. Research shows purchasing from local growers not only supplies the consumer with fresh, healthy organic produce, it also supports the grower and helps revitalize the local economy (Trobe