Operations Management at Kudler Fine Foods

Background

Kudler Fine Foods is a local upscale specialty food store located in the San Diego metropolitan area. Kudler Fine Foods was started by Kathy Kudler. “Her vision was to create one store that would stock a wide selection of the freshest ingredients as well as all of the tools a gourmet cook could ever want. Kathy was certain that combining the convenience of one-stop shopping with reasonable prices would be a recipe for success.”(Kudler Fine Foods Web) Since 1998, Kathy Kudler has slowly increased her demographic with 3 stores now being open in Lo Jolla, Del Mar, and the newest store in Encinitas, CA.

Process Changes for 2007

Kathy Kudler has identified the possible need to provide not just fresh produce but also an organic variety. As media reports continue to voice the concern with what Americans eat and how pesticides are affecting our overall health, Kudler Fine Foods wants to stick to their mission of providing a wide variety of the freshest ingredients. Market Surveys completed by Kudler Fine Foods in 2006 concluded that “The merchandise sold is a good value for the money”, 38% disagreed with this statement. (Kudler Fine Foods Survey2006). To provide organic produce and ultimately make a profit, Kathy Kudler needs to identify if organic produce are going to replace the entire produce inventory or if the produce inventory will be a combination of both organic and chemically altered fruits and vegetables. Once a decision is made the following business operations are going to need to altered; Purchasing, Merchandise Selection, Forecasting, and Facilities.

To properly benefit from the Kathy Kudler initiative, the Purchasing department will need to identify how Inventory, Suppliers, Supplier Relations, Quality are to going to make this initiative successful. To provide organic produce to the customer, decisions on inventory have to be made. Produce does not have an endless shelf life so the product that will be purchased by organic growers needs to be a product that is cost effective and will be purchased by the customer. The price for organic produce is guaranteed to be higher since organic growing methods yield less sellable product then chemical means. If Kudler Fine Foods is going to remain competitive, the organic produce prices must be attractive. With three stores and many organic farms in the San Diego area, Kathy Kudler is confident that competition will result competitive prices.

Besides providing an inventory of competitively priced produce, an inventory of produce needs to have a shelf life that is equivalent or exceeds the shelf life of the chemically grown produce currently offered. Unfortunately, since preservatives are not added to organic produce, the shelf life of organic foods is less. With a limited time frame that an organic vegetable can be sold, a tight time schedule must be maintained between Kudler Fine Foods and the organic suppliers. Tight time schedules can only be kept when quality relations are maintained between Kudler Fine Foods and the supplier. To maintain a balance that provides the most money and least risk for the partnership, will require constant monitoring of current inventory and daily/weekly sales figures.

The Purchasing Department at Kudler Fine Foods also needs to maintain an inventory of produce that is cost effective based on the ratio of cost and demand. For Kathy Kudler to continue to provide specialty foods in her stores, she needs to constantly monitor the trends of popular foods in gourmet cooking magazines as well as the television programs such as ones offered on the Food Channel. To foresee what customers may request before they request it, Kudler Fine Foods is able to meet the demand before anyone else does. Foreseeing the demand also Kathy you to make deals with the suppliers to introduce this product at an introductory price to help truly judge the consumer interest. Between market surveys and current sales figures, risk can be legitimized based the demand for product that is only offered at your local Kudler Fine Foods.

To provide the best environment for organic produce, facilities need to identify the conditions that promote the best visual appearance and shelf life for their new products. Maintaining close relations with the organic suppliers, farmers can be brought in to help design the best display solution for their products. Once the new products are on display, the information provided by the farmers can be used to maintain an overall humane environment that will guarantee quality product for the customer.

Supply Chain

To meet the needs of Kudler Fine Foods, organic produce suppliers will need to meet the competitively priced and vast inventory provided by Kathy Kudler’s former suppliers. Meeting directly with the organic produce farmers,