Operations Managements At Kudler Fine Foods

Operations Management at Kudler Fine Foods

Kathy Kudler has big plans for 2007. Included in her strategic plan, is opening her fourth specialty foods store. In order for her business to continue to flourish, she has planned marketing strategies to differentiate Kudler Fine Foods from other high-end markets. In opening her first, and subsequent, gourmet markets, she created an alternative shopping venue for the consumer. There was little competitive rivalry; however, she will need to maintain her edge in the gourmet arena by continuing to improve her services and products at a competitive price while maintaining the quality that her customers have come to expect. As an owner and a supplier, Kudler will need to review her current operations management programs and capitalize on her growing chain status for purchasing power.

Current Operations at Kudler Fine Foods

Kathy Kudler has been in business for less than 10 years and had tremendous success as a business owner. She owns 3 gourmet food stores and continues to expand her company. However, Kudler has many opportunities to tighten her business processes and gain potential revenue. Kathy Kudler is the owner and president of Kudler Fine Foods. Sustaining the president's efforts to run the company are 3 key positions, the Director of Finance and Accounting, the Director of Store Operations, and the Director of Administration and Human Resources(UOP, Virtual Organizations Portal: Kundler Fine Foods: Human Resources). She has depended upon these 3 directors to lead many of the major functions of her operation and develop policies and procedures of the 3 stores. There is a store manager in charge of each of the 3 stores. Their function is to manage the daily operations of each of the stores and those duties include everything from formulating pricing policies to locking the store at the end of the day. Theoretically, each of the 3 Kudler Fine Food Stores could be run differently or have different products (UOP, Virtual Organizations Portal: Kundler Fine Foods: Human Resources). "The Kudler stores are no different from any other store in that business success is geared to being able to provide total customer satisfaction" (UOP, Virtual Organizations Portal: Kundler Fine Foods: Operations). While I do not disagree with that statement, I assert that in order for Kudler to continue to be successful and multiply her stores, she will need to operate her each of her stores under a singular vision, with singular policies and procedures. In addition, she plans to change the format of purchasing away from the individual stores and purchasing in bulk from the local organic farmers. In 2002, Pitney Bowes undertook a similar venture when they started their "One Company" Philosophy. Hallman reports, "The internal communication challenge was to draw together Pitney Bowes' 35,000-strong employee population and build a unified corporate culture. Communicating this strategy focused on 3 key elements: people, processes and technology" (2006, pg.10). Although Kudler, does not have this size organization, she does lack a consistent process amongst her team. She will need to rebuild her processes in order to move forward and grow. Regularly scheduled staff meetings would be prudent and would go far in helping the employees feel part of the team. During these staff meetings, there should be a time for an open forum where staff can freely share ideas and offer solutions to problems that the company is facing. Hill points out that, "Corporate communicators need to give their employees an opportunity to offer their point of view or give feedback. Simple conversation ensures that they feel part of the organization, rather than on the sidelines" (2006, para. 3). Kudler will need to remain actively involved in her stores and in her staff. Talking to your staff as individuals will go far to improve productivity and morale. Hill reports that in a poll of employees, "the top three tactics to build staff motivation are: team meetings, leaders' visits and employee conferences, in that order" (2006, para. 6). Simply stated, face-to-face conversation surpasses any written form of communication.

Supply Chain

The current supply chain system at Kindler Fine Foods is not a formalized one. "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. It is the responsibility of the Department Managers to obtain the best price, quality, and delivery possible" (UOP, Virtual Organizations Portal: Kundler Fine Foods: Operations). It is conceivable that a customer goes to any of the three stores and find differing items. In addition, "The 3 department managers are encouraged to check with their counterparts at the other stores on the pricing, quality, and delivery of the merchandise they order. They are also encouraged to combine orders between their stores if they feel there would be a cost savings resulting from ordering a larger quantity of a particular item or multiple items" (UOP, Virtual Organizations Portal: Kundler Fine Foods: Operations). Another area of inconsistency for Kudler Fine Foods has been forecasting. Forecasting is the technique where a company looks at their usage of a product and predicts for future usage. For Kudler Fine Foods, "This is a reoccurring topic in monthly operations review meetings in which monthly sales are reviewed for the last year and monthly forecasts prepared for the next three months, a quarterly forecast for the quarter after that, and for six months for the next six-month period after that. The accuracy of this forecasting method has not been as good as desired and has resulted in the obsoleting of some merchandise and in offering others at drastic discounts(UOP, Virtual Organizations Portal: Kundler Fine Foods: Operations).This would represent a loss of revenue for the company. As Kudler introduces her plan to buy in bulk from local organic farmers, she will need to centralize her purchasing department. Buying in bulk allows a business to negotiate for better pricing, which will ultimately produce capital for Kudler Fine Foods. Kudler may also want to review their processes of inventory management and forecasting as they has been less than successful and have represented a loss of