Operations Management Kudler Fine Foods

Operations Management Kudler Fine Foods

Operations Management Kudler Fine Foods

University of Phoenix

Operations Management Kudler Fine Foods

Kudler Fine Foods, a gourmet food shop, was founded by Kathy Kudler in 1998. Kathy established Kudler Fine Foods to provide consumers with a store that stocks a wide variety of the freshest ingredients and tools for gourmet cooking. Kudler Fine Foods currently has 3 store locations located on the central west coast of California. As a growth strategy, to attract new customers and keep existing customers, Kudler Fine Foods has decided to contract with local organic farmers to provide fresh organic produce to its stores. Success of the direct from local growers’ initiative depends on the careful analysis of affected business processes, supply chain activities, and quality control systems.

Business Processes

The business processes at Kudler that could be affected by the decision to contract with organic growers are purchasing, inventorying, delivery planning, packaging, and legal considerations. Currently, the purchasing of inventory is separated between the three stores and each individual store handles its own purchasing. The department manager of each store determines when, how, and who the store purchases from. Going forward, Kudler Fine Foods will need to change its purchasing process because the process would not be efficient if individual store managers purchased from the growers separately. The purchasing process should be consolidated into a single department that does all the purchasing for efficiency, cost savings, and process management reasons. “You make better and faster decisions by consolidating key business information and making it available at-a-glance” (Baron, 2006). Other processes which will be affected are delivery planning, packaging, and legal considerations. The delivery process of inventory from organic growers will need to be implemented. How will the produce get to the stores and in what time-frame? “Plastic packaging retains organic integrity by reducing cross-contamination and creating a micro-climate” (Merson, 2001). Kudler should make sure of how the produce is packaged because consumers care about the shelf-life of their produce. Finally, the legal contract process may need to be reviewed as dealing with local smaller farmers may introduce new requirements. Kudler’s supply chain would also be affected by the decision to contract with organic growers.

Supply Chain

“The idea of supply chain management is to apply a total systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer” (Chase, Jacobs, & Aquilano, 2005). Due to the nature of organic produce being generally a seasonal product, providing accurate estimates or forecasting may prove to be a difficult task for Kudler. Providing a steady supply of fresh organic produce will be a challenging task. An inherent risk of not managing the supply chain correctly is food spoilage or out of stock issues. Kudler is already striving to maintain a zero out of stock policy so this new initiative will be important to get the supply chain working properly. The supply, both quantity and quality, can be dependent upon weather conditions which will add some unpredictability to Kudler’s new supply chain (Chase, Jacobs, & Aquilano, 2005).

A positive effect to Kudler’s supply chain is that local organic growers are closer than traditional sources of inventory therefore reducing the amount of time to get the organic products into the stores, potentially providing fresher produce, and reducing transportation costs. An important consideration when Kudler chooses suppliers will be the distance they are located from the 3 stores. The suppliers should be located within a 100 mile radius. “In this way, transportation is kept to a minimum thereby reducing ‘food miles’, produce is fresher, and customers can be sure they are supporting local producers and the local economy” (Trobe, 2001). Kudler Fine Foods will need to implement a great supply chain strategy linked with operational efficiency to provide success for itself, partners, and customers.

Quality Control Tools and Performance Standards

Organic foods are generally known to be preservative and pesticide free. “Food safety is receiving more attention than ever before by governments and policy makers, health professionals, the food industry, the biomedical community, and last but not least, the public” (Magkos, Arvaniti, & Zampelas, 2006). If Kudler Fine Foods is going to offer organic produce it will need to make sure