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Operations Management

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Autor:   •  December 23, 2010  •  937 Words (4 Pages)  •  534 Views

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Several business processes will be affected as Kudler Fine Foods starts to offer organic produce purchased from local growers. The purchasing process at Kudler will change as the three department managers at each store will now need to determine the organic produce requirements at each of their stores and then place the purchase orders with each organic grower. It is currently the responsibility of each of the department managers to oversee the purchasing process in terms of ensuring product price, quality and delivery. The managers are encouraged to confer with each other in case larger orders can be made and shared between stores. This process may be more difficult when dealing with organic produce and the needs of the customers at each location. With the three Kudler stores being located in La Jolla, Del Mar, and Encinitas, the disposable income level of each store's customers will affect their willingness to purchase higher priced organic produce. Therefore, the store managers may find it more difficult to combine organic produce orders between their stores.

Kudler's advertising will also be affected by the decision to start offering locally grown organic produce. Kathy Kudler will continue to prepare the advertisements for the local papers; however, now she will definitely want to change the advertising to prominently feature the fact that the stores now offer locally grown organic produce. Currently advertised specials are offered simultaneously at all three stores. Kathy may want to offer different advertised specials for the organic produce at each store in order to take advantage of the different income levels of each store location's clients. As Fromartz (2007, para. 12) noted, people are generally only willing to spend a small portion of their total grocery budget on organic foods, so part of the Kudler advertising campaign will need to not only stress the altruistic benefits of supporting local organic farmers, but also the health benefits of eating organic produce. Plus, with major players such as Wal-Mart and Tesco starting to aggressively enter the organic food market (Rushe, 2007); Kudler will want to look at upping their advertising budget, which was $263,000 in 2003.

Kudler offering organic produce will affect their inventory management, forecasting, and merchandise selection and pricing. Kudler will need to form strong relationships with their local organic produce suppliers to ensure the organic growers will be able to guarantee the quantity and pricing on the organic produce Kudler. Local growers will be susceptible to possible shortages due to insects, disease and weather. Therefore, Kudler will be open to the risk of shortages of certain items due to unforeseen circumstances. The availability of their supply will need to be continually and very closely monitored by the department managers in order to possibly foresee any looming issues. Kudler would be encouraged to continue the process of introducing and reviewing new products at their operations review meetings. Kathy Kudler and the department managers should also visit each supplier of organic produce as a team or individually, on a regular basis, to build and maintain a strong relationship with each supplier. These regular visits will also assist Kudler in quality control as they will be able to determine firsthand if any quality issues exist with that supplier's produce.

As part of Kudler's strategic objective to increase the loyalty and profitability of their customers, Kudler should consider partnering with their local organic produce suppliers in having events at the farms of the suppliers. These events can introduce customers firsthand to the world of organic farming and where cooking demonstrations could be held using that farm's organic produce in various dishes. These events should be highly publicized through

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