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Kudler Fine Foods is presented in the virtual organization portal of the University of Phoenix MBA 502 rEsource page (2008). Kudler fine foods is a specialty food store located in the San Diego metropolitan area. It is a one-stop food shop with the finest selection of very best foods and wines at reasonable prices. The shop offers wide range of products such as fresh bakery items, fresh produce, meat, seafood, condiments and packaged foods and specialty dairy products. Within five years Kudler Fine Foods company had expanded to three branches (University of Phoenix, 2008). Recently, Kudler plans to start contracting with local growers of organic produce. This paper identifies the business processes at Kudler that could be affected by this decision and it also describes how the supply chain would be affected.Then,it explains the different quality control tools and performance standards that kudler need to implement to ensure the effectiveness of its operations.
Business processes at Kudler
A process is any part of an organization that takes inputs and converts them into outputs that, it is anticipated, are of superior value to the organization than the original inputs (Chase, Jacobs, Aquilano, 2005). Understanding how processes work is essential to the competitiveness of a company (Chase, Jacobs & Aquilano, 2005).
The different processes that would be affected are Purchasing, Inventory and delivery planning. At present at Kudler, there is no purchasing department. The department managers of each store determines the product requirements for his or her department and places the purchase orders directly with suppliers. The department managers are solely responsible for getting the best price and quality on their purchases.
In this case when it is brought from different local growers, it would be difficult to maintain the same quality and price. A problem from the processors and manufacturers perspective is the variability in quality of organic food (Knudson,2007).Because of this reason the price would also vary. The customers always expect good quality at a minimum price.Sometimes, it would be difficult for the department managers to find out the best price which should also matches with the other Kudler stores.
Since the suppliers are local growers,a make-to-order process will be followed to keep the inventory costs minimum.Because of this make-to-order process,the inventory has to made regularly, to maintain that no products are out of stock.In multi-period single-item order release and scheduling problem is considered in which the delivery schedule of the orders is determined through the planned lead times, and the capacity loading decisions are separated from the order release decisions in a way so as to plan for on-time deliveries.
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Supply Chain Management
The term Supply Chain comes from a picture of how organizations are linked together as viewed from a particular company. The idea 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).
Since kudler changed its policy to contract local growers, there will be increasing concern about how the supply chain would be affected. It would be a great challenge for kudler in fixing the prices. Although kudler has decided for local growers, it still has some disadvantages.
Growing crops without chemicals requires more man power to cultivate the crops, and cheap labor is readily available in developing countries. The European Union directly subsidizes farmers to grow organic crops, which is a big advantage for the stores in Europe.
Quality control tools and Performance Standards
Top management must make improvement in productivity a strategic objective of the firm. It must also be sure that managers from different areas of the firm work together to increase
efficiency(Gomez-Mejia & Balkin, 2002).
Consumers always prefer products of a consistent quality, and maintaining consistent quality is more difficult in producing organic foods than it is in producing food from conventional methods(Knudson,2007). The use of chemical fertilizers and pesticides not only increases yields but also improves consistency. Those organic producers and processors that can adequately address the issue of consistency will possess a competitive advantage(Knudson,2007).however these products has to be quality checked before it is delivered to the customers.
Quality management is defined as a planned and systematic approach to the verification of compliance with processes and their associated procedures and standards. The another purpose of this process is to constantly check the quality of the products. It also determines to what extent the organic growers are following the quality standards as agreed.
Quality Management is concerned with the formulation of more general quality policies, monitoring downstream process improvements, including the quality of the processes themselves and the triggering and progress-measuring mechanisms for process improvement. Total quality management, kaizen, just-in-time, and process reengineering are four methods of managing quality. Kudler should implement Total quality management(TQM) to improve its quality and improve the performance standards.
Total Quality Management
Total quality management (TQM) has been described as “a total commitment to quality and attitude expressed by everybody’s involvement in the process of continuous improvement of products and services, through the use of innovative scientific methods(Gomez-Mejia & Balkin, 2002).The steps that are involved in TQM are Plan,Do,Check and Act(PDCA cycle).Kudler must implement these process. At each step in the cycle, Kudler must focus on customer needs,
emphasize participation and teamwork of all involved in the firm’s activities (suppliers,
employees, and customers), and establish an organizational structure of continuous
improvement by all employees(Gomez-Mejia & Balkin, 2002).
The management should be very much careful about the standard ways of working. Individual employees can correct specific problems as part of their TQM responsibilities, such as alerting their supervisor to late deliveries and suggesting ways to improve scheduling.
The management at Kudler should make sure that everyone at Kudler are fully aware that they are responsible for quality. The respective managers should make their employees clear of their responsibilities. Separate target is set for every employee so that it can be evaluated and see how far they achieve their goals. The employees who exceed their targets should be recognized. This brings more enthusiasm among the employees.
Poor quality in the products might be a result of poor inputs from the suppliers. Strict quality control should be made in order to avoid poor quality products from reaching the customers. The management at kudler should also make sure to main a cordial long-term relationship with the suppliers.
Operations management uses TQM techniques to focus on the production process(Gomez-Mejia & Balkin, 2002).since kudler is going to order in huge quantities it should follow some standard quality techniques to eliminate defects. One such technique is six sigma. Sigma is a statistical measurement of defects in parts per million. In particular, processes that operate with six sigma quality produce at defect levels below 3.4 defects per million opportunities. Six Sigma's implicit goal is to improve all processes to that level of quality or better. This would really help kudler to achieve quality and happy customers.
Competition is at the core of a firm's success or failure (Turban, Rainer & Potter, 2003).The management at Kudler are very well aware that operational changes are necessary to stay ahead of the competition. Their decision to contract local organic growers would definitely be a huge success if they work upon the quality issues. With such convenience and low price (Padbury, 2006) attract lots of new customers. These initiatives shows an important
demonstration of an alternative and a new vision of Kudler in the food chain industry , one which is essential for the achievement of sustainable development.
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Chase.R,Jacobs.F.R,Aquilano.N.J(2005). Operations Management for Competitive Advantage, (11th ed.).New York: The McGraw-Hill Companies.
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Selc,Fransoo,de Kok,(2006). Work-in-process clearing in supply chain operations planning IIE Transactions, 206–220.
Turban, E., Rainer, R.K., & Potter, R.E. (2003). Introduction to Information technology (8th ed.). New York: The McGraw-Hill Companies.
University of Phoenix. (2007). Kudler Fine Foods [Computer Software]. Retrieved January 6, 2008, from University of Phoenix, rEsource, Virtual Organization Portal, MBA 502-Managing the Business Enterprise Web site.