Operation management

nyentery management is ene ef the mest imp:-ertant I
eperatiens management aetiyities at lylaner Bakeries,
Eurepe‘s largest menufaetureref ‘ambient’ baekaged
eakes and pies. [Ambient means that they mn be stered
at reem temperature._.i Its brands inelude Lyens and Mr
lfipling. ltsfleet ef yans reutinely resteeks the shelyes ef
theusands ef small retailers and else distributes te majer I
s.lp-ermarkets. but here the re-erdering preeess is usually
managed by the sup-ermarket’s ewn inwntery
management systems. Gakesare predueed at feur
faeteries, en preduetien lines, seme ef whieh are ed-erated I I
eentinueusly. Altheugh eensiderable effert is made te
fereeast sales aeeurately. there is always uncertainty. ”
there are limits te hew mueh inyentery ean be used te ..
eempensate fer demand fluetuatiens be-eause +
sspermarkets require pr-eduets te be en their shelyes fer ‘=_
mest ef their shelf-life, allewing enly a few days fer Maner

te transpert. stere and deliyerthe preduets.
Input steaks ef raw materials must alse be earefully
managed at eaeh faetery. Elulk ingredients sueh as fleur
and sugar are deli-rered te giant sterage siles, but
managing the hundredsef ether ingredients i_butter, nuts, ‘ I
dried fruits. pasteurizeduegg, ete.,l is mere eemplek. Seme way pmdums are pmduced an the prfldumifln “HES
cf rfhese Era mm‘ EKPEHENE b’_Jt are “SE5 m huge mlumaa Altheugh seme breduets sell eneugh te warrant their awn
fmne E_:’mEr5 are En”? E’”“”””5?’?_“’“‘ “Saga ‘5 Ema“ Sam? preduetien lines, mest lines haye been designed te make
Ingredients have a shert shelf-lne.and have te be stered In H range flf Similar prmuflta So pmdums are madfi in
Epemal 3rTmd’m’n5? Some are 535?‘-‘r a‘*’3??“”E- Gthfirs are batehes, suffieient te last until the next ere-duetien run.
eseeially Imperted and are en leng lead times and fresh
annual ereps sueh as fruit ean yary in duality and .

ayailability. Packaging is frequently ehanged ta refieet new
prflmmifina and price Changes. Yet running DUI Df Stack is 1 What arethe faeterswhieh eensijtute inyentery helding
Semua ‘1 can disrupt prmummn Schedules and lead m eests. erdereestsand steek-eut eests at lylaner Bakeries’?
steek-euts effinishee ereduets. affeeting betn sales and 2 What makes its inventory planning and central se
eustemer relatiens. lnyenteny alse eeeurs beeause ef the -EGr’I”IplE=<‘?

Operational details
Steve’s shop has grown steadily over the years. Originally, he maintained a modest three automobile bays at his shop, and Steve and his long-time buddy, Bill, conducted most of the work except oil changes which were handled by a part-time apprentice. Currently, Steve’s shop has six bays (the layout of the shop is shown in Figure 1) and seven mechanics. Each of the bays is identical so that any employee can work at any station.

Four of the employees (including Steve and Bill) are full-time (work at least 40 hours per week), and three are interns who work part-time (work fewer than 40 hours per week). Steve and Bill are the only two mechanics permitted to do work beyond the basics, and so more involved car services can take some time getting through the shop. Most mechanics at Steve’s were trained at the area vocational school, and those with particular skill are taken on as apprentices who work under Bill and Steve on the more involved projects. Steve provides all the tooling necessary, and is revered as a fair and caring boss. In return, Steve’s employees are loyal and hard-workers; seldom is absenteeism a problem, and turnover is rare.

The employee schedule for a typical week is shown in Table 1. The numbers shown in Table 1 are all devoted to working on vehicles. The shop closes for one week in the winter (although somebody is usually on call that week to handle emergency services that cannot wait). The hours required, the prices charged, and the percent of customers requesting each service are shown in Table 2.

o Have the appropriate process strategy decisions been taken? If not, what changes should be considered?

o Are all aspects of the service package being considered? What should be emphasized? What should be de-emphasized?