Kudler Fine Foods
Kudler Fine Foods (Introduction)
Kudler Fine Foods, a specialty foods store has three locations in Northern San Diego, CA. This specialty food store is dedicated to bringing gourmet foods/ products to a clientele interested in gourmet style cooking (University of Phoenix, 2007). In attempt to tap into an additional niche market, Kudler Fine Foods is partnering with local organic farmers (similar concept to Henry’s Grocery Store owned by local organic farmers) to reach a clientele with interest in fresh organic produce/ healthy living by providing fresh organic produce in Kudler Fine Foods store locations. Although Kudler Fine Foods has a great idea to reach a new niche market, the pros and cons of this strategy must be considered. In effort to look at the pros and cons of Kudler Fine Foods new business idea/ plan, Kudler Fine Food’s business processes, supply chain activities, and quality control systems will be discussed in the following paragraphs.
Kudler Fine Food’s decision to partner with local organic farmers may impact their business process of purchasing and inventory management. Currently Kudler Fine Foods’ inventory purchase is divided among their three store locations in which managers at each store are responsible for their store’s purchasing, specifically making their own decisions regarding how often and whom they purchase their supplies/ inventory from. Kudler Fine Foods’ current business idea to partner with local organic farmers seems to not coincide with their standard purchasing procedures in place. Kudler Fine Foods does not have a purchasing department. In order to make their new idea to work, Kudler Fine Foods’ purchasing procedures should be consolidated into a single department that does all the purchasing for efficiency and cost savings. Although Kudler Fine Foods may need to consider developing a dedicated team/ department to this area which would initially cost money, in the long run it makes more sense and will make operations a bit smoother.
Each store manager would need to purchase inventory from organic farmers separately which in the long run is more expensive and less cost effective than just consolidating this process into one department that handles all the purchasing/ inventory for all three Kudler Fine Food locations . For example, a central purchasing/ inventory department can have oversight on ways to move around revenue allocated to merchandise/ inventory that is not generating revenue. At current, store managers are responsible for the maintenance of these inventory levels in addition to their many other responsibilities. Kudler Fine Foods’ policy ensures that “adequate levels of inventory should be maintained to assure that stock-outs do not occur more than 2 – 3 times per year” (University of Phoenix, 2007). An additional challenge that Kudler Fine Foods may face is in the area of forecasting/ budgeting their inventory. This has historically been challenging for Kudler Fine Foods and with the implementation of a partnership with local organic farmer’s produce offered in their stores, this challenge will be even more eminent when they attempt to forecast/ budget their inventory.
Legal, distribution, delivery, and strategy procedures/ processes may be impacted by this new alliance of Kudler Fine Foods & local organic farmers. Expenses, timeframe, and freshness of merchandise from local organic farmers must be considered when implementing a process for inventory delivery. Kudler Fine Foods must legally bind/ put a contract in motion that guarantees that local organic farmers delivering produce to them will bring the most fresh and truly organic produce to Kudler Fine Foods so that Kudler Fine Foods may guarantee organic fresh produce that has high quality, to its customers. In addition, Kudler Fine Foods may want to hire a legal consul that has oversight of this partnership. The legal consul will make sure contracts are in place, legal issues are covered as foreseen, and may mediate if needed. Finally, the legal contract process may need to be reviewed as dealing with local smaller farmers may introduce new requirements.
Organic produce is generally a seasonal product which may create difficultness for Kudler Fine Foods in accurately forecasting their supply chain. Guaranteeing quality fresh produce to customers will mean excess produce will be left over/ spoiled on any given day, thus risking being trashed. This can be a negative turned into a positive if instead of throwing the produce away, Kudler Fine Foods may donate the produce to charity (tax write-off) or increase employee morale by giving produce that is left over to it employees, especially the lower-income employee who deliver, cashier, clean-up, etc,. This can assist in keeping the supply chain pumping, especially with Kudler’s “zero out of stock policy”. Because local organic farmers are prevalent in the greater San Diego area, Kudler Fine Foods has the advantage of receiving organic produce timely and fresh. They can keep there “zero out of stock policy” intact by having the local organic farmers at their door if any produce runs out and is needed as soon as possible. A sound supply chain strategy along with operational efficiency will need to be implemented by Kudler Fine Foods especially because it will now be competing with organic produce specialty stores such as Henry’s, Whole Foods, Jimbo’s, and etcetera. This awareness will provide Kudler Fine Foods with customer satisfaction and success for itself and its partnership. Kudler Fine Foods’ will create total customer satisfaction by having a one stop shop of gourmet and organic products.
Quality Control Tools and Performance Standards
Organic foods are generally known to be preservative and pesticide free. Kudler Fine Foods’ interest is in offering organic produce will need to be ensured by quality control of the organic produce. In other words, the organic produce delivered by local organic farmers needs to indeed be organic. This means it is preservative and pesticide free. Some research and development (R&D)/ benchmarking of local stores providing organic produce will need to be conducted regularly.
Kudler Fine Foods has made a great move by its decision to partner with local organic farmers. This strategy will make Kudler Fine Foods more profitable and marketable because of its competitive edge/ niche of being a one-stop shop for gourmet and organic merchandise. The implementation of Kudler Fine Foods’ new strategy will require lots of R&D/ benchmarking, such as successful operations management, supply chain development, and quality control management and legal counseling. With all of these intact, Kudler Fine Foods can ensure customer satisfaction and success for itself and partners!
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