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Sizzling Stir Fry manage to keep costs at a minimum ensuring the use of all materials in the warehouse. Using stock rotation SSF are able to use every piece of stock coming into the factory preventing unnecessary waste.(Figure1). By doing this, it also allows the company to produce the 'bulk' products potentially reducing the amount of materials they have to order in. The machinery used during the processing also helps reduce the costs, the carrot cutting machine for example is a way of reducing the amount of staff required, allowing costs to be saved that would otherwise go towards wages. Also the computer weight machines enable the correct weight to be used during the processing reducing the amount of waste materials.
Stock Storage and Rotation (FIGURE 1)
"The degree to which an operation's process can change what it does, how it does it, or when its doing it."(Operations Management Slack)
SSF need to be flexible in order to satisfy the customer's requirements, as they have a variety of customers with different needs and wants. The company need to be able to accommodate and fulfil orders on such a varied scale in order to stay in business. SSF often has to produce different products at different times of year, also depending on the promotion the customer has on. The products SSF order from the suppliers are based on a 'Sales Forecast'; a estimate of what products need to be sold. If the orders received are at short notice and are different to the prediction, the customer will still want the product on time; this is where the company must be flexible enough and have the capability of finding ways of getting hold of the right materials. The company therefore must ensure they have varied numbers of staff on a different times, depending on the orders being placed by the customers.
" The elapsed time between customers requesting products or services and their receiving them." (Slack,2007)
The speed of the operations is an essential part of SSF because they are dealing with fresh ingredients; if product lines aren't getting out quick enough, they will reach the customers in a poor condition. The customer expects the product to be as fresh as possible so that it has a longer shelf life. They also do not want a slow process getting hold of products; they want the orders fulfilled quickly. If this doesn't happen the customer can quite easily go elsewhere, therefore it is imperative for SSF to complete orders as quickly as possible. If the company has an order of promotional products they will, for example, order in 'floretted broccoli' rather than normal, to cut out a part of the processing therefore saving time. The process from receiving the materials to producing the product is around 48 hours; this fast turnover not only allows the stock rotation system to flourish but provides the customer with fresher products therefore increasing their shelf value and overall customer satisfaction.
"A consistent conformance to customer's expectations." (Lovelock, 2008)
This definition is very true of the operations of the Sizzling Stir Fry as there is a big reliance on the customer in this line of business, they have to ensure the customer's satisfaction at all times. They also have a big emphasis on the quality of their products, this is evident from all aspects of the operation. Before the Staff enter an area where they could be in contact with the product, they have to wear protective clothing and go through a rigorous step by step cleansing routine. In doing this it will help with quality control and practically eliminates the chances of cross contamination which is one the biggest concerns for a company that produces fresh food and in such a variety. This emphasis on hygiene is also evident in the processing of the product, the machines and equipment are cleaned after every item has passed through reducing the risks of contamination. It is also done to ensure there is no old produce or trapped particles which can have an effect on the quality of the product. Another example of the extent to which the company goes to ensure the quality of their product is the machinery used in the processing; the weight machines and metal detectors ensure that the product meets the customer's requirements. Ensuring the customer's requirements is a key aspect of the company's operational strategy. Johnston states in his ideas on quality that, "Management must go beyond the thinking of inspection as merely sorting out the good products from the bad but as preventing the bad products from reaching the customers"(Johnston,2007). During the production process SSF hire a person to ensure no food gets stuck underneath the seal because this is what the customer doesn't want, it could be argued that by doing this they are preventing the bad products reaching the customer.
"Delivering, or making available, products or services when they were promised to the customer"(Slack,2007)
The dependability of the company's operations is an essential requirement for a customer and therefore steps must be taken to ensure this. The orders received from the customers are often on promotion, this could either be a larger quantity of the same product or a new variety, and the customers would require the product to be of good quality and on time. Sizzling Stir Fry go to great lengths to ensure that their customers can depend on them, one of the ways in which they ensure this is the vegetable mix is layered during the processing in order to keep the mix of the product consistent and even. The vegetable mix is often bulk prepped so that if there is a sudden increase in the order of a product, the company can still prepare the product on time and of good quality for the customer. The specific wagon times for collection are a good way the company remain dependable to their customers, it allows the customer to know when to expect the product, and also exactly what products are put on the lorry.
As well as the performance dimensions proving a good insight into the operational strategy imposed by the company, some aspects of Porters 5 Forces also have provide a good insight. "The power of buyers is especially evident in economies where large retail chains dominate. They can become such major customers of manufactures that they can dictate product specification and price."(Lovelock, 2008) it could be argued that SSF relies heavily on the business of a large retailer and that their operational strategy is based around pleasing the retailer. In conclusion this section has identified and analysed the operational strategy of SSF and given reasoned suggestions on how to better some of their operations. SSF focuses towards the quality, dependability and flexibility aspects of the performance dimensions without neglecting the speed and cost aspects. However they could, through implementing small precise changes to the process flow and layout of the factory, create a positive effect on quality, cost and speed in the long term. This report will cover these aspects and give reasoned explanations and analysis within the following sections.
1.6 Porter's five forces
Threat of new entrants
SSF has a constant threat of new entrants into their market because it is a large market with many competitors. It is easy for customers to go elsewhere, therefore SSF have to ensure customer satisfaction. They also they need to keep on top of new entrants to monitor whether or not they are a threat to SSF's business.
Bargaining power of buyers
Customers can bargain to a certain extent which is obviously expected, but when SSF is reliant on buyers, it means that they have little room to manoeuvre; if they cannot negotiate fair prices, then the business can crumble. It is therefore imperative that SSF operate and develop a good business relationship with their buyers. This helps with keeping customers happy with everything from the stock to the price, but it also allows them to build up long lasting consistent business from satisfied buyers. " The customer is always right" SSF have to put the customer first if they are to succeed and keep operating.
Rivalry among existing competitors
Being in such a largely saturated market, there is obvious competition from rival companies, in order to combat this SSF must gain a good working relationship with buyers and suppliers, to ensure a long a prosperous future in trading together.
Bargaining power of suppliers
Suppliers of SSF have a substantial power over them as if they do not supply SSF then then SSF cannot operate. This is why it is imperative for the company to build a good business relationship, which leads to dependability and trust, which are the most important things for SSF in the area that they operate.
Threat of substitute products
Substitute products are quite an important factor for a business such as SSF. If a buyer finds similar produce that is cheaper then obviously they would go there in order to save money. In order to stop this happening, SSF offer a wide range of products and product lines, this allows them to cover a variety of produce, which only leaves a few products which SSF don't produce.
Map and evaluate SSF's process flow, core elements of the supply chain, and site layout for both products and information.
2.1 Process Flow
Unloading Materials Stored at Goods In Hand Cut 'Prep' Slicing Machine
Stored in Boxes. QA checks Load and 'Layer' 'Pre wash'
'Bulk prep' Chlorine Check vegetables
Wash Tank 'Cent' tube: Spinning of excess water. Weight station 'Mezz'
Feed Trays/Bags Trays/bags filled with product Check for overhang
Load 'Bagged' into machine
Seal lids onto trays Metal Detection Weight Check Load product into
Output from process
Stored in Despatch Load into lorrys
"Processes are an arrangement of resources that produces some mixture of products and services"(Slack,2007)
The process flow of SSF shows a clear indication of precise operational strategy and management. They use. Using Figure (2 ) in addition to the process flow layout it gives insight into what type of production process the company is involved in and how effectively run the company's operations are. By just analysing the layout of the process flow it is easy to gain an understanding of the positives and negatives of it that the company imply. By adding up the data given, it is clear that SSF use a Mass production method as they produce products with relatively moderate flexibility. Mass process production is processes which produce in high volume and relatively low variety. Mass production typically uses moving tracks or conveyor belts to move partially complete products to workers, who perform simple repetitive tasks to permit very high rates of production per worker. This allows the high-volume manufacture in a short space of time. Although production of goods is high, staff and workers tend to get bored with the repetition of workload so it is important to rotate staff onto different parts of the factory. This example fits perfectly for SSF as they produce a small varied amount of product ranges in quite a high volume. This is by far the better option for SSF, as when a company becomes too involved in variety or volume, this leads to higher costs, because if a company produces too much volume and cannot sell it then they will be losing money, SSF however only produce products to order which enables them to keep costs at a minimum with minimal wastage. With variety of products, if a company produces too much variety it will costs them to be able to complete all of the separate processes for each individual product range. SSF on the other hand complete a relatively low variety of products to enable them to keep on top of time constraints also cost.
A good layout should be concerned with safety, allowing fire exits to be clearly marked, and path ways clearly defined and not cluttered. The flow of materials and information should be channelled by the layout as to be appropriate for the objectives of the operation. This generally means minimizing distance travelled by transformed resources, which is imperative for SSF to ensure speed and accuracy of the process and distribution. Clarity of flow is important to the success of a process flow, as if the layout of processes is not clear and coherent to all employees and customers it tends to slow down the production process. It is important for all areas no matter how important, to be clearly sign posted and everyone in the company to be up to date with the current arrangement. Also important are such things as accessibility, use of space and long term flexibility. These factors affect the business operation because if the factory areas are inaccessible then the process is being slowed. The use of space needs to be fully utilised to prevent wastage and or cramped factory working conditions. If the company suddenly switches to a different product range which in SSF's case is highly likely, they need to be able to change and be adapt to the product range and type of products they need to produce. SSF at the moment have a very clear and concise process mapping system, which contributes to the success of the company.
This is the ground floor plan of SSF factory, as it shows it is clearly labelled and laid out. Using the data it is possible to gain greater understanding of the product layout that SSF currently imply. Looking at the different types of layout it is clear that SSF use a cell layout , which in their case is essential and makes the process of production easier and clearer. Cell production is where the transformed resources entering the operation are pre-selected to move to one part of the operation in which all the transforming resources, to meet their immediate processing needs are located. After being processed in the cell, the transformed resources may go on to another cell. In effect, cell layout is an attempt to bring some order to the complexity of flow. SSF use this type of layout to ensure that products can 'flow' along the chain of production in a clear and well defined way to contribute to effectiveness of the production process.
Relating to your analysis in Q1 and using relevant operations management concepts describe and evaluate the critical elements of SSF's operations
This question will be looking at the core elements of operations management, and applying reasoned suggestions for SSF.
When discussing constraint management, one of the main theories that occurs is the bottleneck theory. The bottleneck theory consists of 5 key stages; identifying the constraint, exploiting the constraint, sub-ordinate other processes to constraint, elevate constraint and begin process again. The theory of constraints can be applied to the operations at SSF. It is based around the idea that, "the rate of revenue generated is limited by at least one constraining process. Only by increasing the throughput at the bottleneck process can overall throughput be increased."(Slack,2007) At Sizzling Stir Fry the process can produce around 90 boxes an hour but operate at only 45 boxes an hour. This is because the people at the storage cannot processes any more than 45 boxes efficiently, meaning that the storage process at the end of the operation acts as the 'bottleneck', restricting the throughput from the process. The company however is able to meet the demand from the customers whilst operating with the constraint, this is an example of how the company matches the working capacity to the 'drumbeat' of the bottleneck.
Quality management can be considered to have three main components: quality control, quality assurance and quality improvement. Quality management is focused not only on product quality, but also the means to achieve it. Quality management therefore uses quality assurance and control of processes as well as products to achieve more consistent quality. SSF use quality management to ensure that their product gets to its customer in a excellent standard of condition, SSF use quality checks throughout the production process to ensure that the product is fully checked and approved, before being sent off to the customer. Checks consist of Quality assurance checks, safety checks, weight checking and metal detecting. All of the checks ensure that the product gets to the customer in a good condition
Demand management is an approach to medium-term capacity management that attempts to change or influence demand to fit available capacity. The problems Demand Management has to solve in the short term include those arising from, Degradation of service due to unexpected increases in demand. Partial interruptions to service due to hardware or software faults. (Slack, 2007). There are three things which a company have to do to keep operating; absorb the demand, adjust output and change demand. At the moment SSF gets a lot of orders which means a large demand, SSF have to be able to absorb the demand in all areas of production to keep operating at that high output level. If demand starts to overpower then they would have to move on to adjusting the output, so they can cope with the production process throughout.
Supply and demand can will affect all businesses, as it means how much people want the product and how well the business can 'supply' that need. There are three elements to supply and demand of stock; make to stock, make to order and resource to order. SSF have adopted a system which they 'make to order', this means that the company purchases the raw materials based on the forecasts, but also on the orders. There is an element of risk in using this system if the forecasts are incorrect, also the customers often order promotional products at short notice meaning that efforts must be made to get the materials in time to remain dependable. The company often 'bulk preps' the food which increases the risks of the operation but again help the company remain flexible to the orders. The system adopted by the company is due to the dependent demand from the customers; the demand for food ordered is governed by the customer. As a result the company operates on a chase demand basis. This requires the company to be flexible in order to accommodate for the changes in demand. With the operations running 24 hours, it enables any increases in demand to be accommodated for; with the company having access to part time staff it allows them to be flexible.
When assessing the critical elements of Sizzling Stir Fry's operations, using the principles of Lean can help us understand the positive and negative elements. Lean can be described as a philosophy that, "seeks to eliminate waste in all aspects of firm's production activities: Human relations, vendor relations, technology, and the management of materials and inventory." The 5 principles of lean are value, value stream, flow, pull and perfection. Lean is based around two philosophies, the elimination of waste and respect for people. The waste principle is very important to that of SSF as if they do not ensure all produce is used correctly and efficiently they can end up losing a lot of money due to wastage, so it is important to make sure along the production then that every bit of produce is being fully utilised in the process.
Referencing all your above analysis outline how SSF's operations could be improved, and why this would help the business overall.
Having analysed all of SSF as a business throughout this report, there are points that have been discussed which have a significant effect on how SSF operate during their operations processes. One of the main factors that are a cause for concern is the cost and quality aspects of the operations, if they are not keeping on top of expenditure and wastage then they will end up losing vital supplies of both money and stock. The quality aspect is also very important to the success of the business, if they do not produce their products to a good standard of quality, then the customer can go elsewhere, which is why quality is an important factor.
When looking and SSF we can see that constraints are a big factor which can have a devasting effect on production, these constraints consist of quality of staff, as if staff or under working, then they are losing time in the production process, which could otherwise be allocated to machinery instead of staff, in doing this it will increase flow of production allowing more produce to get out of the factory. If they increase flow of production through the chain, then at the end they will have to increase shipments and delivery of the produce, as if there is too much stock produced and it is not getting out of the factory in time to be delivered, then the stock will amount up and, quality of the produce becomes compromised. Using machinery though could mean less dependability, due to breakdowns and other problems, but as this report has shown if they production flow in the middle and assign more staff at both ends of production at prep/goods in and goods out, they will be able to increase output, which in turn will keep customers happy and increase revenue and orders for the company.
As it stands SSF are positioned well in their specific market, and are able to target a relatively larger audience with their products, generally down to how flexible there production, as they can make a lot of differentiated products in a short space of time. In conclusion the findings in this report show how SSF can better themselves through increasing line flow, but also by increasing their factory size to accommodate a more effective production line.
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