Instruction:

Executive Summary

Company Background

Main Issue

Assumptions

Problem Statement

Internal Analysis

External Analysis

Alternative Courses of Action

Advantages

Disadvantages

Recommendation and Plan of Action

Conclusion

Case Study:

Modern Cauldron Catering (MCC) is a full-service catering company

that provides services ranging from box lunches for picnics or luncheon meetings to large wedding, dinner, or office parties. Established as a lunch delivery service for offices in 1992 by William and Joanne Winston, MCC has grown to be one of the largest catering businesses in North Bay, Ontario. The Winstons divide customer demand into two categories: deliver only and deliver and serve.

The deliver-only side of the business provides drop-off of boxed meals consisting of a sandwich, salad, dessert, and fruit. The menu for this service is limited to six sandwich selections, three salads or potato chips, and a brownie or fruit bar. Grapes and an orange slice are included with every meal, and iced tea can be ordered to accompany the meals. The overall level of demand for this service throughout the year is fairly constant, although the mix of menu items delivered varies. The planning horizon for this segment of the business is short: Customers usually call no more than a day ahead of time. MCC requires customers to call deliver-only orders in by10:00 A.M. to guarantee delivery the same day.

The deliver-and-serve side of the business focuses on catering large parties, dinners, and weddings. The extensive range of menu items includes a full selection of hors doeuvres, entres, beverages, and special-request items. The demand for these services is much more seasonal, with heavier demands occurring in the late spring early summer for weddings and the late fallearly winter for holiday parties. However, this segment also has a longer planning horizon. Customers book dates and choose menu items weeks or months ahead of time.

Modern Cauldron Catering food preparation facilities support both operations. Thephysical facilities layout resembles that of a job shop. There are five major work areas: a stoveoven area for hot food preparation, a cold area for salad preparation, a hors doeuvre preparation area, a sandwich preparation area, and an assembly area where deliver-only orders are boxed and deliver-and-serve orders are assembled and trayed. Three walk-in coolers store foods requiring refrigeration, and a large pantry houses nonperishable goods. Space limitations and the risk of spoilage limit the amount of raw materials and pre- pared food items that can be carried in inventory at any one time. MCC purchases desserts from outside vendors. Some deliver the desserts to MCC; others require MCC to send someone to pick up desserts at their facilities.

The scheduling of orders is a two-stage process. Each Monday, the Winstons develop the schedule of deliver-and-serve orders to be processed each day. MCC typically has multiple deliver-and-serve orders to fill each day of the week. This level of demand allows a certain efficiency in preparation of multiple orders. The deliver-only orders are scheduled day to day owing to the short-order lead times. MCC sometimes runs out of ingredients for deliver-only menu items because of the limited inventory space.

William and Joanne Winston have 10 full-time employees: two cooks and eight food preparation workers, who also work as servers for the deliver-and-serve orders. In periods of high demand, the Williamses hire additional part-time servers. The position of cook is specialized and requires a high degree of training and skill. The rest of the employees are flexible and move between tasks as needed.

The business environment for catering is competitive. The competitive priorities are high-quality food, delivery reliability, flexibility, and costin that order. The quality of the food and its preparation is paramount, states William Winston. Caterers with poor- quality food will not stay in business long. Quality is measured by both freshness and taste. Delivery reliability encompasses both on-time delivery and the time required to respond to customer orders (in effect, the order lead time). Flexibility focuses on both the range of catering requests that a company can satisfy and menu variety.

Recently, MCC has begun to feel the competitive pressures of increasingly demanding customers and several new specialty caterers. Customers are demanding more menu flexibility and faster response times. Small specialty caterers have entered the market and have targeted specific well-defined market segments. One example is a small caterer called Lunches-R-US, which located a facility in the middle of a large office complex to serve the lunch trade and competes with MCC on cost.

William and Joanne Winston have been impressed by the concepts of just-in-time operating systems, especially the ideas of increasing flexibility, reducing lead times, and lowering costs. They sound like what MCC needs to do to remain competitive. But the Williamses wonder whether JIT concepts and practices are transferable to a service business.