Kudler Fine Foods is a well known specialty grocery store that has three locations throughout California. These locations include Encinitas, Del Mar, and La Jolla. Kudler’s core products include organic foods, and a variety of delicious wines (University of Phoenix, 2003). Kudler Foods is especially known for providing exceptional guest service by establishing high levels of quality products, and maintaining a great understanding of quality product knowledge (University of Phoenix, 2003). Kudler also allows their consumers to special order products that aren’t normally available. Recently, Kathy Kudler who is the company’s founder and owner has noticed a dramatic increase in the demand for organic products. With that in mind, it is imperative that Kudler Fine Foods offer a large variety of organic products for their consumers. By providing a large variety of organic products, Kudler Foods has the opportunity to improve their levels of management and sales (University of Phoenix, 2003). In order to maximize the efficiency of this plan, Kudler Foods will have to contract with local growers and negotiate prices for buying organic produce. This paper will discuss the current business process practiced by Kudler Foods, and how the contract with local growers for organic produce will affect the supply chain. It will also evaluate the influence of the current supply chain and assess what necessary changes should be made in order to maintain their competitiveness, and improve their performance levels.
The everyday business practices that take place at Kudler Fine Foods consists of, detailed processes of operations management, purchasing inventory, and inventory control. The
Operations Management processes that will be impacted the most are the inventory control process. In order to roll out the contract with local food growers, specific process guidelines will have to be set in relation to the local organic grower’s contract (University of Phoenix, 2003). These new processes will help Kudler Foods to establish a strong business relationship with the local growers, and set guidelines with the different operational practices. The overall impact of this business decision will lead to an increase in efficiency and sales (University of Phoenix, 2005).
Purchasing inventory is an important part of the operations management process, and each key executive is responsible for the purchasing of that inventory (McNamara, 2009). The managers at Kudler Fine Foods are given autonomy in order to prioritize, allocate, and monitor inventory controls (University of Phoenix, 2005). Since Kudler foods give their customers the ability to special order products that are not normally available, it is important that the department managers have a proficient process when it comes to handling special purchase orders. Kudler Foods would reap rewards from implementing advancements of having a special order inventory system that coordinates with the local organic growers. In turn the department managers would play a vital role on how the ordering should be done and also determining which contractors to purchase inventory from (McNamara, 2009). Handling purchase orders with this strategy will help the process to be more effective.
Another strategy that would all be proficient, is sending purchase orders electronically through the internet. Establishing the purchase orders and defining specific guidelines with the growers will help to reduce mistakes and unnecessary orders during the ordering process (McNamara, 2009). Each store will have to select a supplier for different levels of inventory. The Operations Management
operational process would be proven most effective for this process. By regulating purchase orders through local growers, the order process would help increase the stores sales and efficiency. Also delivery schedules will need to be set at specific times in order to ensure high quality produce. Each store has the ability to regulate the levels of inventory and the amount of purchasing based on that particular store’s demands (University of Phoenix, 2003).
In order to maintain steady partnerships with the local growers a quality operational process to ensure the inventory process will have to be implemented. Also a new practice will have to be determined for receiving the produce. Implementing new operation practices will require ownership responsibilities (McNamara, 2009). In order to drive productivity, each store will have to verify all shipments and match them with their orders. Manual processes demand checking received items and sending them to the accounts payable department in order to ensure payment to suppliers (University of Phoenix, 2003). It is imperative that inventory is managed efficiently, because of the perishable life of many organic products. With that stated inventory must be checked daily in order to maximize efficiency and satisfy customers. Organic produce has a short shelf life because of its composition, and having too much inventory can increase expenses because of spoilage. A strong first in, first out system also known as (FIFO) will help monitor the shelf life of organic products, and it would allow Kudler Foods to evaluate the spending habits of their customers more efficiently. Managing inventory responsibly can help maintain reasonable prices (University of Phoenix, 2005).
For Kudler Foods it is very important to have one specific manager overseeing the
Operations Management purchasing and inventory process. This is where effective communication will come in, because the new inventory practice will require timely update statuses from each store managers. This system can help organize the inventory information from each store and help the purchasing manager to communicate effectively with organic produce growers (McNamara, 2009). This will allow managers, to determine the needs of their stores by communicating with other store managers and local produce growers.
Supply chains consist of people, businesses, technology, and information that is related to sending a product from a supplier to a business, and then eventually to a consumer. An organized supply chain consists of efficient practices that include managing inventory and reducing costs across all departments. The Six Sigma can be a useful tool when it comes to regulating these processes, because it examines the weaknesses of the business. Six Sigma will help to evaluate the structures and best practices of a business (isixsigma.com, 2009). In Kudler Fine Food’s case, Six Sigma will help identify the causes of errors by showing how to reduce the variety of manufacturing. It will also show Kudler Foods how to reduce costs, and increase their profits while contracted with local growers (isixsigma.com, 2009). The daily operational process would include high levels of product knowledge, understanding and implementing best practices, and constantly improving satisfaction among their consumers.
In order to ensure high quality and strong levels of performance Kudler Fine Foods will have to examine the business impact of contracting with organic growers, and monitoring its overall effect on the business (isixsigma.com, 2009). Since deciding to go with local organic
Operations Management produce growers Kudler Foods will need to establish specific performance standards based on their expectations for the local organic growers. The local organic growers will have already set their own standards prior to the delivering of organic products. Performance standards can be determined and implemented for distributing and displaying the new organic goods, this will draw more attention to the consumers when it comes to purchasing certain organic products, especially when it comes to product availability. Operations management and performance standards are correlated with one another when it comes contracted partnerships (McNamara, 2009). By monitoring the quality of products, Kudler Fine Foods will be able to determine which products sells, and what does not. Reviewing the performance standards will improve the consistency and productivity of each of the Kudler Foods Store. In order to maintain, the success among the Kudler Fine Food stores, managers must energize their team, and clearly express their expectations of their employees. Every employee needs to know that they are valuable when it comes to the performance contribution of the store (University of Phoenix, 2005). Measuring performance, setting goals and objectives, monitoring progress, and giving feedback is critical for the execution of the new practices.
Overall, Kudler Fine Foods will have to make changes to their business practices when it comes to purchasing inventory, managing inventory, adjusting the supply chain, and setting performance standards. Improving in each of the areas will help Kudler Fine Foods to make a smooth transition to the local organic growers. Though, it is imperative that Kudler Fine foods examine the overall risks and opportunities, when it comes to making changes to their daily operations and satisfying their consumers. By ensuring inventory controls, and steady business partnerships, Kudler Fine Foods will have the ability to expand its business, maximize efficiency, and increase profits. The impact of such a change will challenge the operational productivity of a company. Though, by executing the different levels of management and ensuring quality products, Kudler Fine Foods will be on their way to lucrative growth.
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McNamara, C. (2009). Operations Management. Free Management Library. Retrieved from
Six Sigma. (2009). What is Six Sigma?. Retrieved from http://www.isixsigma.com
University of Phoenix. (2005). Operations Management for competitive advantage. Retrieved
from University of Phoenix, MMPBL 502 website.
University of Phoenix . (2003). Web link: Virtual organization portal: Kudler Fine Foods.
Retrieved from University of Phoenix, MMPBL 502/ Managing the Business Enterprise