Operations Management

Running head: Operations Management

Operations Management

\

MBA/502

Managing the Business Enterprise

Operations Management

Kudler Fine Foods is a store unlike any in the grocery industry. Kudler Fine Foods represents a store that could possibly spark a new era within the grocery world. The owner of Kudler Fine Foods, Kathy Kudler, has watched her dream of owning and operating a grocery store that specializes in fine quality food grow within a short period of time. The success of Kudler Fine Foods can be attributed to the innovative ideas, effective leadership, and organizational structure. The overall mission of Kudler Fine Food's "is to provide our customers the finest in selected foodstuffs, wines, and related needs in an unparallel consumer environment. Our selections coupled with our experienced, helpful and knowledgeable staff, merge to offer each customer a delightful and pleasing shopping outing" (Apollo Group, 2003). Kudler has managed to maintain its mission statement by providing its customers with the best and as a result the company has flourished. "Kathy considers one of her key responsibilities to be that of identification of new gourmet items that can be offered in her stores (Apollo Group, 2003)." Therefore, Kathy is considering plans to contract with local growers of organic produce to yet obtain the best in quality products for her consumers and take her business to the next step. If Kathy makes the decision to contract with local growers then changes could be introduced into the company's overall structural organization. Each aspect of Kudler Fine Food's organizational structure from basic business process to the supply chain and quality control process will be affected by the formation of a contractual relationship with local organic growers.

Operations

Business Process/Structure

Each department within Kudler Fine Food's organization implements certain business process with which they conduct their daily business functions. Therefore, some departments within Kudler may experience some process changes if a contractual relationship with local growers were to occur. An area that may receive an increased change in business process would be the legal area. "Kudler uses very few custom forms, preferring instead to use forms (contracts, order forms, etc) that are supplied by the parties the company is dealing with. For example, the leases on the stores were contracts supplied by the lessors. The few customized forms the company uses were obtained from "of-the-shelf" computer programs and slightly modified by Kathy or her assistants" (Apollo Group, 2003). Since Kathy Kudler is the primary legal decision maker, along with counsel from her sister-in-law and lawyer Anne Shousha., she may want to implement the use of personal company forms/contracts for business matters pertaining to local organic growers. The local growers may not have their own forms to implement due to their possible small associate business dealings, so Kudler would need to try and implement a contract in order to ensure that all areas are addressed and that the company will seemingly negotiate business beginning with their terms. The local growers would then be the ones to go back and write in customized areas to Kudler's contract if needed.

Another department within Kudler that would be affected would be the purchasing department, or the department managers who act as buyers within the organization. Currently, Kudler does not have a definite purchasing department in place. The company allows the different departmental managers within the stores to decide on which items need to be ordered. The managers fill out and submit the request forms. "There is no purchasing department in any of the stores although standard purchasing procedures are in place. Each of the three department managers in each store determines requirements for the items their department sells and places purchase orders directly with suppliers using a purchase order form that is standard between the three stores" (Apollo Group, 2003). If Kudler decides to create a business relationship with the local organic growers then the company may need to take time and money to invest in a procurement department strictly for tracking and maintaining order status on supply's. As of now, "the three department managers are encouraged to check with their counterparts at the other stores on pricing, quality, and delivery of the merchandise they order. They are also encouraged to combine orders between the stores if they feel there would a cost savings resulting from ordering a larger quantity of a particular item or multiple items" (Apollo Group, 2003). Therefore, it may be in the best interest of Kulder to secure a procurement team that will deal, along with Kathy Kudler, directly with the supplier and implement a process that would involve the procurement team taking request from the departmental managers and handling the process from then on out.

Supply Chain

"Marketing has encouraged the purchasing department to find ways of reducing costs of ordering foods and minimize the amount of food to be stored, while also having a zero output policy. In response, purchasing has developed a supplier relations program and has solicited the help of marketing to help roll out the program" (Apollo Group, 2003). The act of developing supplier relations and implementing cost reduction is an example of the company trying to reduce bargaining power of suppliers. The department managers are responsible for maintaining high customer service levels for the items they sell, which means carrying high levels of inventory, but not excessive service levels" (Apollo Group, 2003). As mentioned before, Kudler's informal purchase department, managers, operates by filling out a purchase order form, submitting the request, and awaiting the customer response. Since Kudler is trying to implement a low cost savings program aimed at inventory the company will need to figure out a way to successfully configure a process for carrying out their pre-planned operation. Instead of carrying a high supply of "excessive" inventory, the company will be implementing a form of the just-in - time (JIT) system. Just-in-time (JIT) system is the concept behind creating the firm's product