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Operations Management

Essay by   •  February 28, 2011  •  Research Paper  •  1,286 Words (6 Pages)  •  1,506 Views

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Operations Management

Introduction

Operations management is the process used by an organization to obtain materials, the process of transforming the product, and the process of providing the final product to the end user. Operations management consists of three stages: acquiring inputs, controlling the conversation process and delving the product to the user (Gomez, Meija & Balkin 2002). At Kudler fine foods this translates to purchasing products, preparing them for sale and selling to the customer (Apollo 2008). Kudler fine foods would have never thought that five years later they would have made significant growth that they have made since they first started. Kudler has made a decision to work with local farmers to produce organic products so that it can improve its business within its stores.

This paper will identify the business processes at Kudler that could be affected by this decision and will explain how they would be affected. This paper will also describe the affect of this decision on Kudler's supply chain. Finally, this paper will describe the quality control tools and performance standards that Kudler would need to put in place to ensure the effectiveness of its operations (Apollo 2008).

Business processes refer to various systems employed by a business to make it run efficiently (Educe 2008). The way an organization manages its purchasing, inventory control, quality management an operations systems, are all part of the business processes (Chase, Jacobs & Aquilano,2005). Kudler purchasing and inventory process is going to improve by working with the local organic farmers.

Purchasing

Kudler needs to focus on new purchasing practices the one they have in place now is not efficient for them. Each of the store managers are responsible for how they operate their stores, they must focus on the best items to sell, price, quality and delivery of the products, they have to make sure that they negotiate with the right suppliers. Kathy Kudler is the best person for this job, she can build that relationship and will need to meet with the suppliers, she also has to negotiate the right prices and make sure that the delivery of the produce for the stores. Kudler store managers are encouraged to wok together to place orders, however, without a formal process in place, most purchasing decisions ate made separately (Apollo 2008). Kudler's finance and accounting departments has developed purchasing and receiving procedures within their stores. Depending on their store they handled their purchase orders differently, they are either mailed, hand to the supplier, faxed and emailed. This system would need to be revamped and serve as the basis for payment to the supplier because this is the only means of tracking orders. The current networking capabilities and availability inventory reports will need to be used to determine the demand at each store as well as to track inventory. This will require additional support from the purchasing staff at corporate ( Apollo 2008).

To help eliminate waste and bottlenecks purchasing organic produce from local farmers will help out a great deal, but it requires a lot of planning. In order to realize a cost saving through bulk ordering, the process flowcharting will need to be revamped in order to consider the combined ordering of organic produce and inventory controls for all stores (Chase, Jacobs & Aquilano 2005).

Inventory Control

The managers are responsible for receiving and verifying their shipments for their stores. They have to make sure that all the quantity are their in good condition to be able to be put out on their store floors. Received items then need to be checked in so the suppliers could be paid from accounting. The numbers that they go off on are from prior sales, the determines the amount that the store would need to operate efficiently. Kudler has a very difficult time with this process they have to make sure that they satisfy their customer needs and not order to much quantity that it would spoiled. Through that are numerous seasonal produce for organic foods they have to make sure that their systems are updated in a timely manner and adequate. They will keep with the produce that they have on hand to avoid over purchasing and spoilage. The reports generated will increase the accuracy of the forecasting future inventory needs and trends for each if the stores instead of relying on historical data as they do now (Apollo 2008). Organic produce has a short shelf life.

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