Kudler
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Kudler Operation Overview
The purpose of this paper is to evaluate Kudler Fine Foods current operational procedures and to determine what changes could exist if local growers were contracted as a supplier of organic produce. In addition, this paper will measure and recommend suggestions for the organizations supply chain strategy as well as, describe the quality control tools and performance standards that will keep Kudler running at an optimal level.
Business Process Changes
Understanding how processes work is essential to ensuring the competitiveness of a company. A process that does not match the needs of the firm will punish the firm every minute that the firm operates” (Chase, Jacobs, & Aquilano, 2005). The Kudler organization uses multi-stage processes to ensure that products are moved with efficiency from the supplier to the consumer. For example, the meat department orders poultry from a supplier. Next, the supplier sends the poultry to the store for the department manager to inspect. After the poultry passes inspection, it is available for consumers to purchase.
In addition to fresh bakery, produce, meat, and seafood, Kudler Fine Foods is considering outsourcing the stores organic department to local growers. If this occurs, processes involving training, purchasing, inventory, advertising, merchandising, pricing, and forecasting will be added or modified to ensure that the organic foods department will add value to the company. Kudler will also need to include an organic foods training module. Each produce manager and sales associate will need to understand organic food standards in order to relay this information to the customers. This knowledge will also assist produce managers with making accurate purchasing decisions to guarantee the best quality. Because excess inventory is a concern for the organization, department managers will also have to monitor organic merchandise to make sure items are selling and producing income. Conversely, produce managers must be cognizant of items available in order to meet customer needs. Additional room will be needed for merchandise layouts and advertising displays. Forecasting, which is already a challenge for the Kudler organization, will prove to be more of a challenge because produce managers will have to predict the quantities on hand for both organic and non-organic items. Lastly, pricing for the organic food line will also have an affect on the overall process because managers will have to assign a price to the quality and freshness of organic items.
Supply Chain Changes
Not only will the inclusion of an organic food section affect several processes for Kudler, it will also affect the companys supply chain strategy. Supply chain management is a vital aspect of Kudler because it gives insight to external entities linked to Kudlers success or failure in providing and delivering quality products. In order for Kudler to make a calculated decision in deciding whether to use local growers, several things must be taken into consideration. For example, questions such as how reliable are the local growers, how will the products be moved to each of the Kudler stores, will the organic food suppliers have enough supplies to keep each of the Kudler stores stocked and are the prices of the local produces competitive must be answered.
Moreover, the addition of an organic supplier would assuredly have an affect on Kudlers inventory. Kudler already finds it challenging to forecast the products that customers will purchase. Adding an organic department will heighten the challenge since it will increase the wide array of products sold. Kudler must become more proficient in forecasting to determine inventory levels. Since each store is responsible for managing inventory and ordering products, estimating delivery frequency is something that will need evaluation. In addition, Kudler will have to synchronize the balance between supply and demand among all stores and be able to adjust quickly if items are favored or opposed. Products with short shelf life could be a big challenge for the Kudler. “Supply chain management is challenging, and important, in the field of short shelf-life grocery goods owing to a high number of product variants, strict traceability requirements, short shelf-life of the products, and the need for temperature control in the supply chain” (KД¤rkkД¤inen, 2003). These varying factors to protect the shelf life and quality of a product will have an impact on operation budgets for each Kudler location.
Kudlers goal is to have at least 95% of the items in stock to ensure customer satisfaction. The organization should infuse hybrid process that incorporates made to stock and made to order items. When placing an order to the supplier, Kudler could face the challenge of the local producer not having enough goods to meet the organizations needs. Some perishable items, such as milk for example, may have to be made to order because of its short shelf life. Other items, such as potatoes will be made to stock in order to keep up with the forecasted demand. The retail level will be pivotal to the success of Kudlers organic food section. Success or failure of this initiative will rely on Kudlers ability to improve consumer value and increase profitability. If the contracted producers cannot keep up with customer demand, this will have a negative impact on the company.
Many large grocery stores use warehouses to stock inventory. Kudler does not have a warehouse and relies on each store department manager to determine items needed and inventory level. No matter the where the products are order from or delivered to, transportation will always be needed. A local producer will prove beneficial if they are able to transport the organic produce to each of the Kudler stores in a timely fashion. Kudler should not only be concerned with the quantity of trucks of the local producers but also with the quality of trucks. Local producers must have trucks that can accommodate items that may need refrigeration or require certain temperatures.
Quality Control and Performance Standards
One of the main of objectives of the Kudler organization is to continuously improve its production sequence. In view of the fact that Kudler is committed to presenting customers with the finest and freshest foods and considering a new organic produce section, just-in-time manufacturing (JIT) will prove beneficial for organization. JIT management strives towards eliminating wastes by producing the right amount of products, at the right place, and at the right time. Excess inventory is a concern for Kudler because it means that stocked merchandise is not generating