Introduction
The below details a case-study for a US company who manufacturecookies. You need to review this case-study and answer ALL thequestions which follow.
The baking company is located in a small town in New York State.The bakery is run by two brothers. The company employs fewer than200 people, mainly blue-collar workers, and the atmosphere isinformal.
The company’s only product is soft cookies, of which it makesover 50 varieties. Larger companies, such as Nabisco, Sunshine, andKeebler, have traditionally produced biscuit cookies, in which mostof the water has been baked out, resulting in crisp cookies. Thecookies have no additives or preservatives. The high quality of thecookies has enabled the company to develop a strong market nichefor its product.
The cookies are sold in convenience stores and supermarketsthroughout New York, Connecticut, and New Jersey. The companymarkets its cookies as “good food” with no additives orpreservatives, and this appeals to a health-conscious segment ofthe market. Many customers are over 45 years of age, and prefer acookie that is soft and not too sweet. Parents with young childrenalso buy the cookies.
The company has two continuous band ovens that it uses to bakethe cookies. The production process is called a batch processingsystem. It begins as soon as management gets orders fromdistributors. These orders are used to schedule production. At thestart of each shift, a list of the cookies to be made that day isdelivered to the person in charge of mixing. That person checks amaster list, which indicates the ingredients needed for each typeof cookie, and enters that information into the computer. Thecomputer then determines the amount of each ingredient needed,according to the quantity of cookies ordered, and relays thatinformation to storage silos located outside the plant where themain ingredients (flour, sugar, and cake flour) are stored. Theingredients are automatically sent to giant mixing machines wherethe ingredients are combined with proper amounts of eggs, water,and flavourings. After the ingredients have been mixed, the batteris poured into a cutting machine where it is cut into individualcookies. The cookies are then dropped onto a conveyor belt andtransported through one of two ovens. Filled cookies, such asapple, date, and rasp- berry, require an additional step forfilling and folding.
The non-filled cookies are cut on a diagonal rather than round.The diagonal-cut cookies require less space than straight-cutcookies, and the result is a higher level of productivity. Inaddition, the company recently increased the length of each oven by25 feet, which also increased the rate of production.
As the cookies emerge from the ovens, they are fed onto spiralcooling racks 20 feet high and 3 feet wide. As the cookies come offthe cooling racks, workers place the cookies into boxes manually,removing any broken or deformed cookies in the process. The boxesare then wrapped, sealed, and labelled automatically.
Most cookies are loaded immediately onto trucks and shipped todistributors. A small percentage are stored temporarily in thecompany’s warehouse, but they must be shipped shortly because oftheir limited shelf life. Other inventory includes individualcookie boxes, shipping boxes, labels, and cellophane for wrapping.Labels are reordered frequently, in small batches, because FDAlabel requirements are subject to change, and the company does notwant to get stuck with labels it can’t use. The bulk silos arerefilled two or three times a week, depending on how quicklysupplies are used.
Cookies are baked in a sequence that minimises downtime forcleaning. For instance, lightcoloured cookies (e.g., chocolatechip) are baked before dark-coloured cookies (e.g., fudge), andoatmeal cookies are baked before oatmeal raisin cookies. Thispermits the company to avoid having to clean the processingequipment every time a different type of cookie is produced.
The bakery prides itself on the quality of its cookies. Cookiesare sampled randomly by a quality control inspector as they comeoff the line to assure that their taste and consistency aresatisfactory, and that they have been baked to the proper degree.Also, workers on the line are responsible for removing defectivecookies when they spot them. The company has also installed anX-ray machine on the line that can detect small bits of metalfilings that may have gotten into cookies during the productionprocess. The use of automatic equipment for transporting rawmaterials and mixing batter has made it easier to maintain asterile process.
The bakery is run very efficiently and has minimal amounts ofscrap. For example, if a batch is mixed improperly, it is sold fordog food. Broken cookies are used in the oatmeal cookies. Thesepractices reduce the cost of ingredients and save on waste disposalcosts. The company also uses heat reclamation: The heat thatescapes from the two ovens is captured and used to boil the waterthat supplies the heat to the building. Also, the use of automationin the mixing process has resulted in a reduction in waste comparedwith the manual methods used previously.
Ideas for new products come from customers, employees, andobservations of competitors’ products. New ideas are first examinedto determine whether the cookies can be made with existingequipment. If so, a sample run is made to determine the cost andtime requirements. If the results are satisfactory, marketing testsare conducted to see if there is a demand for the product.
There are a number of areas of potential improvement at thebakery. One possibility would be to automate packing the cookiesinto boxes. Although labour costs are not high, automating theprocess might save some money and increase efficiency. So far, theowners have resisted making this change because they feel anobligation to the community to employ the 30 women who now do theboxing manually. Another possible improvement would be to usesuppliers who are located closer to the plant. That would reducedelivery lead times and transportation costs, but the owners arenot convinced that local suppliers could provide the same goodquality. Other opportunities have been proposed in recent years,but the owners rejected them because they feared that the qualityof the product might suffer.
Questions:
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