Operations Management

Operations management is the process the managing the entire process from acquiring the materials, transforming the materials to the final product and delivering the product to the customer. Kudler Fine foods is specialty food store that conducts business in fresh produce, fresh bakery and pastries, fresh meat and seafood, condiments and packaged foods and special dairy products. Kudler fine foods have plans to switch to local farmers for fresh organic produce. Following examines the impact of this change to the business operations of Kudler Fine Foods in implementing the new strategy.

Business processes at Kudler Fine Foods

Implementing new strategies require changes in business processes. Understanding how business processes work is essential to ensuring the competitiveness of a company. A process that does not match the needs of the firm will punish the firm every minute that the firm operates. Process is defined as a set of activities performed by an organization that takes inputs and transforms them into outputs ideally of greater value to the organization than the original inputs (Chase, Jacobs & Aquilano, 2005).

Process analysis helps the manager to identify the various processes involved to implement strategies in the organization. The key terms in process analysis is the cycle time and utilization. Cycle time is the average time taken between completions of successive units. Utilization is the ratio of time that a resource is actually activated relative to the time that is available for use. Clearly understanding the purpose of the analysis is critical to setting the level of detail in modeling the process. Often different processes affect the performance of another (Chase, Jacobs & Aquilano, 2005). Process flow charting is the tool used to analyze the process. The four components of process flow charts are tasks, decision points, flow of materials and storage areas. Process can be categorized to single stage process and multistage process. The process viewed as a single black box is single staged process. In this process all the activities are collapsed and analyzed using a single cycle time. A Multiple stage process has multiple groups of activities linked through flows.

Process can also be categorized as Make-to-stock process or Make-to-order process. Make-to-stock process ends with finished inventory and customer orders are served from this inventory. The main advantage of Make-to-stock process is standard products can be delivered quickly to the customers. This is important to customers who require speedy delivery. In Make-to-order process the process is activated only after receiving the order from the customer. One of the main advantage of Make-to-order process is the process is custom made for every individual customer. The main disadvantage of Make-to-order is it takes longer time to process the order from the customer.

Kudler Fine Foods currently follows Make-to-stock process. One of the issues of Kudler Fine Foods is they carry higher level of inventory using the Make-to-stock process. Kudler Fine Foods needs to change this process to accommodate the new change. As these organic produce are perishable, they should maintain low level of inventory. This can be achieved by reengineering the supply chain strategy. Kudler needs to have an understanding of how the existing supply chain works and the needs of the customers. Kudler Fine Foods should establish performance measurement system after the reengineering process has occurred.

Impact to Supply Chain Management process

The term supply chain is described as how organizations are linked together as viewed from a particular company. Supply chain is the linkage between suppliers that provide inputs, manufacturing and service support operations that transforms inputs into products and services, and the distribution and local service providers that localize the product that fits the end user needs (Chase, Jacobs & Aquilano, 2005). The components of supply chain are suppliers, service support operations, local service providers and customers.

Following analyzes how the processes associated with the components of supply chain are impacted by Kudler Fine Foods switching to local farmers.1) Kudler Fine foods offers produce which includes fresh foods, vegetables, spices and varieties of fruit all around the world. Even though Kudler Fine Foods has planned to switch to local buyer, as a first step Kudler should decide whether the local farmers can offer all these varieties of foods or Kudler should leverage from other suppliers for different varieties of food, 2) Kudler Fine foods should select the farmers who will be the suppliers for fresh produce. Kudler Fine Foods should also analyze the purchasing terms and contractual terms while selecting these local farmers. When selecting the farmers they should analyze the availability of required produce, the quality of produce, the delivery mechanism and the cost of the produce. Managers need to oversee not only the selection of inputs and suppliers, but also the availability of the needed quantity of inputs, the quality of the inputs, ability of suppliers to meet the delivery dates, and the reliability of the suppliers (Chase, Jacobs & Aquilano, 2005), 3) Materials requirement planning is a process to determine how much inventory levels are required in the production process. As the farmers are local, Kudler fine foods need not store large amounts of inventory levels. The produce can be ordered depending upon the tastes and requirements of the customers in a particular store. As the farmers are local the delivery charges are lower than bringing the produce in bulk from other parts of the country. 4) Kudler Fine Foods should come up with the delivery process to deliver the fresh produce to the local store, 5) The process of managing the invoice and making payments to these local farmers needs to be addressed , 6) Inventory management is the process of maintaining inventory levels to meet the customer needs. Kudler fine foods should determine if there would be continuous supply from these local farmers to meet the required demand. As Kudler fine foods are contracting with local farmers, any change in climatic conditions resulting in floods may drastically affect the supply. Kudler fine foods should have contingency plans to address the above situation, 7) Kudler Fine Foods should determine the consistency of quality of the fresh produce from these local farms. This may require Kudler Fine foods to implement new quality control mechanisms, 8) Kudler fine foods can attract more customers by changing the marketing strategy to advertise more on the fresh produce which is locally grown, 9) As Kudler Fine foods is contracting with the local farmers, they reduce inventory costs and delivery costs. This can help them