Sharps Sandwich Shop Inventory Control, Process Management, Demand Forecasting, Supplier Relationships Learning Objectives

Understand the role of purchasing and its strategic impact on an organizations competitive advantage.

Understand sourcing decisions and the factors impacting supplier selection.

Understand the pros and cons of single sourcing versus multiple sourcing.

Calculate and apply quantitative forecasting techniques.

Describe and use the various tools of Six Sigma,

Pareto chart, fishbone diagrams Case Notes Dawn Sharp is the owner of Sharps Gourmet on the Go Cafe, located in a large city and known for its gourmet sandwiches and salads. The shop is open 24/7 and serves many different sandwiches and salads, from chicken salad sandwiches on organic bread to exotic burgers. Customers can order at the counter and wait for their order to be processed or they can pick up premade cold sandwiches or salads in the cooler section of the shop. Dawns goal is to give customers quick service and quality products. If a counter order item is incorrect or cooked improperly, the customer can return the item for cash or credit. A returned order can be because mustard was added when the customer said no mustard or the hamburger is cooked well-done instead of rare as the customer had ordered. As part of her inventory system, she has two routes for items either returned or not purchased and not expired from the cooler- these are placed in a charity bin and donated to a church at the end of the day. Items with expired dates or otherwise not able to be donated are put in the trash. All waste, donated or trashed, is recorded in a waste log. This process enables Dawn to reconcile the waste sent to the church to actual waste, i.e., items that are thrown in the trash. Excess inventory, any ingredients unable to be used the next day, is also included in her system. Dawn had assumed that a significant quantity of her overall waste (95%) was items placed in a donation container to be dropped at a homeless shelter. However, as she compared her numbers in the waste log, Dawn discovered that more items were going into the trash. The daily order return rate also seemed to be creeping higher. As Dawn evaluated the inventory problem that was related to the premade system, she discovered a similar issue speed and freshness. The pre-made category enhances speed and eliminates lines at the counter but how to guarantee freshness? The counter orders were slower but there seemed to be a good portion of those items also going into the trash. Although they have excellent employees, they do not understand the tools of quality. If things appear too complicated, they wont buy into the system and wait times will increase. Dawn currently purchases ingredients from multiple suppliers that arrive with deliveries at various times during the week. At the local farmers market, Dawn will often ask vendors with interesting ingredients to deliver to the shop thinking they can use the new ingredients in daily specials. How will you make this business more efficient? Multiple supply chain and operational issues listed below require problem-solving and recommendations.

1. Inventory System: They need a system to keep the process of premade sandwiches, yet guarantee that freshness will be unaffected. Are too many sandwiches being made at the wrong time of the day?

2. Inventory Management: They are evaluating the food quality by the waste, meaning as the cost of waste increases she senses that the product quality is decreasing. Recommend to Ms. Sharp a better method to evaluate quality than just cost. Are they equating the supplies with the demand?

3. Process Management: Develop and offer the staff a basic and quality process tool that will enable them to reduce errors and improve quality, yet are not complex, and will not demand a lot of their time.

4. Supplier Relationships/Purchasing Management - single or multiple, quality assurance, timeliness: How can they can manage suppliers more effectively?

5. Looking forward: What can you recommend to Dawn to increase her business that is both efficient and potentially profitable? Describe the operational aspects required to execute your plan.