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Operations Management Assignment

Essay by   •  March 18, 2012  •  Research Paper  •  1,399 Words (6 Pages)  •  1,707 Views

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Operations Management Assignment

Kathy Kudler has a vision for her organization; Kudler Food plans to start contracting with local growers of organic produce. Because of this new venture operational changes will be necessary. Some business decisions will affect the process; therefore an outline will have to be explained in order to have an effortless transition. The process will be explained by describing the supply chain and how the decisions made will affect the business. The process will also require quality control tools and performance standards to be put in place to ensure the effectiveness of the business. The Accounting would have to collect data on the sales to make sure that the supplies are selling by tracking daily sales.

As previously explained; the processes at Kudler Food is a significant part of taking on a new business venture. As management has decided to explore the idea of buying from local growers some operational processes will effect this change. The business processes will be affected is the manager's duties at each store, the inventory managers, the purchasing manager, and the IT department. Inventory management will be effected in many ways. Excess inventory seems to be a concern of Kudler owner. Kathy's concern is that she preserves the need to move merchandise. The manager of each store is to take responsibility to ensure that orders are places and maintain adequate levels of inventory to assure that stock is well maintained. Kathy would like to be sure that she generates income instead of spending it on supplies that will not move.

Currently Kudlers Foods has no purchasing department in any of the stores. At this time each of the department store mangers determine the required items to be sold and places the orders directly to the suppliers using a purchase order form that is standard for all the stores. The Department store manager is responsible for obtaining competitive prices, quality, and delivery possibilities. The managers are also responsible for receiving and verifying all orders and making sure they are received in good condition. The managers are also responsible for making sure invoices are received by the accounting department so that suppliers can be paid.

In order for Kudler Food to start contracting with local growers of organic produce operational processes will need to be examined. The process should begin with the planning stage. During this stage the organization should being understanding the customer need for the product. The process could be understood by testing the product through a market research. During this process the organization can determine the resources needed, the time it takes to manage the product, and the goal is which the operation is trying to accomplish. Another process the management team can use to make the decision on the transition is the make-buy analysis. This process can be used to assess the organizations advantage of outsourcing. The process will allow the organization to assess if the company will make a profit or lose complete advantage by taking on a new product. The making-buy analysis will allow the firm to assess the reason for the outsourcing and the cost ( Gomez-Mejia & Balkin, 2002). The cost of buying the product may be less than the cost to the firm of equipment purchase and maintenance, labor and other inputs, inventory costs, and other overhead cost. Another process that could help implement the change would be to use the (JIT) just in-time system, this system is used to improve the stores profitability. ( Gomez-Mejia & Balkin, 2002). Managers develop smooth integrated production processes where steps are performed just as subsequent steps require them from inputs and the conversion process through disposition of the product. JIT need to be implemented at the strategic level at the operational level. Some examples are, from the time the business plan is laid out to the end of the disposition of the product. JIT system also services as a re-ordering system if used. As inventory comes close to depletion that inventory is reordered. JIT inventory systems could be useful to the store, by using the system it saves space on warehousing as well as labor. By using the JIT system money is not tied up in what may be needed or what the store is use to

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