Operations and Logistics for Kudler Fine Foods

I.Goals:

To enhance the ability of Kudler Foods to reliably and profitably create and deliver competitive advantage to the marketplace.

Spotlight operational capabilities that will generate profitability and build brand loyalty to Kudler Fine Foods

1.Purchasing

Standard Purchasing Procedures

Managers in each store determine requirements

Managers place purchase orders directly with suppliers using a standard purchase order form

They receive and verify all orders

Correct items

Correct quantities

Undamaged condition

Documented on an Order Received form and sent to Accounting

Accounting pays the invoices

Resposibilities of Managers

Obtain the best price

Obtain the best quality

Obtain delivery when possible

Check with their counterparts at other stores.

Combine orders for bulk discounts

Kathy places purchase orders

Repair items

Unique items

Capital items

2.Advertising

Newspaper advertisements are prepared by Kathy

Specials are offered at all three stores simultaneously

Weekly Operations Review Meetings

Kathy coordinates items on sale with store managers

Kathy makes sure adequate supplies of merchandise will be on hand

Merchandise can be shifted between stores should one store have a higher demand of an item than another

3.Accounting

Data is collected by the point-of-sale terminals

Record all items

Record all quantities

Record all prices

Record taxes

Record totals for all daily sales transactions

4.Inventory Management

Excess inventory

Represents money being tied up in merchandise that is no generating income

Excesses can lead to write-downs of the merchandise

Department Manager Responsibilities

Maintaining high customer service levels for the items they sell.

This means carrying high levels of inventory that are not excessive

Kathy's policy is that levels should be adequate to ensure that stock-outs do not occur more than 2 or 3 times each year.

This is discussed during monthly service meetings

Adjustments to merchandise stocking levels are made if warranted

Customer service level of 95% is the general goal for number of items carried

95% of the time a customer will find what they are looking for

5% of the time there will be no merchandise due to stock-out

Stores decide on item-by-item basis whether a rain check will be offered

5.Forecasting