Subject: MGT 314 - Operations Management

Question:

A. What is Frederic's involvement in technology acquisition decisions? What are his main concerns when evaluating the capability of new equipment?

B . What main human resource issues are an important part of Frederic's activities?

CASE 3 A day in the life of Frederic God, Operations Manager, BonPain Case date 2001 Stuart Chambers Frederic God is the Operations Manager of one of France's largest bakeries, BonPain, Orleans, which supplies supermarkets throughout Furope with frozen, 'par-baked' (part-baked) French-style bread and patisseries (decorative pastries often incorporat- ing fruit, nuts or jam). After delivery, these are t'nawed and re-baked in-store, providing delicious aromas and fresh-tasting, traditional-style products to Europe's quality conscious consumers. BonPain's largest volume of products comprises a range of baguettes (French sticks), which are made, baked and frozen on three high-volume, specially-built production lines. However, even for baguettes there is a very wide range of recipes and packaging requirements, so these lines have to be set-up for these differences several times per shirt. The lower-volume, more complex patisseries and speciality breads are made in batches, and are hand-assembled and finished prior to baking in batch ovens and freezers. The total range of products comprises around 600 stock-keeping units (SKUS), most of which are bulk-packed and stored in BonPain's freezers for up to a maximum of four week. There is also a relatively small, flexible sitchen where new products are being carefully developed by experienced chefs, who have a clear understanding of the materials and processes to be used in full-scale production. This facility is an extremely important 'order-winner' when dealing with supermarkets which require a regular supply of attractive and tasty new products. Frederic Gode recently attended a time management course arranged by the Human Resources department of the large international food manufacturing group which had acquired BonPain one year earlier. Reflecting on this course in the context of the com- plexity and variety of his daily job, Frederic decided to carry a dictaphone around for a day and record what he actually did. He chose a Wednesday in mid-October, which he considered would be a typical day in his working life. Later, his secretary carefully tran- scribed the tape as follows... 7:55 Arrived at work, parked walked to office. 8:00 to 8:15 Checked e-mail which included: . Productivity report for yesterday's output (obviously well below target!). . Quality report for last week, unfortunately showing above-average levels of scrap. A day in the life of Frederic Godt, Operations Manager, Bonpain 33 A note from the night shift plant engineering supervizor, reporting a serious four hour breakdown during the night on the fastest baguette line. He contends that this was not the result of any lack of maintenance; it had apparently been caused by a failure of the production operatives to stop the machine quickly and correctly when the conveyors were jammed by a major material spillage A note from Warehousing and Dispatch reporting that today's routine deliveries to our largest customer, Hypera (a supermarket group), could not be delivered at the scheduled times because of the production breakdown. One from an external equipment supplier, F-Robot, confirming their technical consul- Lanil's visit luvay al 11.30 lu discuss ure of the latest automation projects at the plant A request from Charles Lamouche, the Marketing Director, for an urgent discussion about production trials for one of the new product introduction projects. Replied, asking if he would be able to come to my office at 15:00. 8:15 to 9:00 Daily first tour of factory with the morning supervisor and the Senior Maintenance Engineer. . During the tour it was pointed out that one of the three baguette production lines had only just restarted working. It had broken down in the middle of the night due to a bearing failure. Spent about 15 minutes in discussion with a group of production operatives who were concerned about our regular requests for extra staff to run the third line at the weekend. Although reluctant to come in, they were persuaded that we did need the extra output to satisfy demand, which had recently grown by around five per cent due to an export order for the UK Noted that the finished baguettes from Line 1 (the oldest line) were showing wide variation in baked colour (but within the control limits) and asked to see the Quality Control charts, but routine notes on these did not highlight any reason for variations. Arranged for Pierre Moulin (the Quality Manager) to investigate root cause and to report back later. Was informed that we had run out of prepared apricots yet again, stopping sched- uled production of the most popular Danish-style patisserie. Reminded me that I need to discuss this with Purchasing Manager, since this is the third stock-out this week! Spotted a guard missing from one of the conveyor drives. Plant Engineer arranging replacement this morning - temporary guard put in place immediately. Excessive flour and fat spillage in mixing room. Appears to be caused by carelessness, perhaps lack of training of night-shift operatives. Waste of this type severely erodes our tight profit margins. Will follow this up at meeting. 9:00 to 10:00 Regular scheduled morning meeting with the three production line supervisors; super- visors from the mixing department, patisserie assembly and baking areas, and freezer warehouse, Pierre Moulin, the Quality Manager, and Monique Dumas, the Production Planning and Control Manager. The normal agenda included an overview of the previ- ous day's production statistics, and of the rolling one-week averages including: the total output of each main production line performance against schedule per specific product utilisation and efficiency measures, and graphs showing these over 12 months 34 Part 1 Operations management records of delivery performance on time delivery of ordered quantities quality statistics: scrap levels for products and packaging. Supervisors provided explanations of problems, and occasionally some suggestions on their resolution and prevention. However, many small improvements were increasingly being undertaken by kaizeri (continuous improvement) leams. Generally, these were done on a day-to-day basis, without great supervisor intervention. The meeting then continued by looking at forecast requirements for the next week and for the next three months. Monique pointed out that the market forecast sug- gested growth in hread sales of about two per cent per month, hut only very slight growth for patisseries. She was concerned that it would be necessary to arrange increased levels of overtime to cover this extra demand and that there might be resist- ance from the operators, since they had already been working excessive levels of overtime over the last few months. It was certainly the time to consider purchasing a fourth baguette line! Pierre was concerned that this pressure on output could lead to further deterioration in quality performance, which could not only create customer complaints, but might also lead to rising levels of scrap and waste. I also know that Monique is really getting stressed by the increasing prospect of being unable to meet a big customer's delivery schedule. Many supermarkets are trying to reduce their frozen inventory to only one or two days' demand, so if we fail to deliver, stores could be out of bread and then there will be big trouble! It's not made any easier by the pattern of consumer demand - up to twice as much bread and patisseries are sold in supermarkets on Fridays and Saturdays than on any other shopping day. We must address these issues when preparing our next operations strategy report. I brought the team's attention to the apparently increasing levels of spilt materials (on the floor observed on the morning tour. They agreed that a team would be formed to look at underlying causes of such waste. 10:00 to 11:30 Mostly alone in my office. I wanted to begin looking at the detail of proposals to auto- mate the packing lines. If we make the right choice, it should be possible to eliminate two people per line by the robotisation of final packing. However, the equipment to do this is very expensive, with the best solutions seeming to be tailor-made for specific types of bread. This would therefore limit the future flexibility of this equipment. However, the project looked promising in terms of my calculations of the payback period, and I was therefore looking forward to the visit of our preferred supplier. Some of this time spent reviewing Monique's calculations of the future capacity requirements of the plant. Use of overtime to provide extra capacity can only continue for a matter of months before that alone will not provide the solution. It is going to be necessary to invest in another line sooner rather than later if we are to avoid delivery problems in the coming spring. I should discuss the market forecast by volume and types with the Marketing Director, so I rang his secretary ard made an appointment to talk with him this afternoon. There were four phone calls during this period: Packaging supplier to discuss quality problem with one size of folding cardboard cases supplied in September. Agreed compensation/replacements and process changes to ensure non-recurrence. A day in the life of Frederic Gode, Operations Manager, BonPain 35 with Personnel to work out the future role and training needs of supervisors.) One of them was clearly under the impression that kaizen was simply a new version of total quality management - and that had not been a total success when we attempted it five years ago! 13:40 to 15:00 Another tour of the factory. Spent most of this time looking at SPC charts in each department because there was some evidence that these were not being used correctly. We may have to undertake some more training in this area if we are to get the full ben- efits of SPC. Then spert some time with the Plant Engineer looking at possible locations for the installation of packing robots. The current packing area is badly laid out and needs reconfiguration, so I hope we can combine the installation of new equipment with a redesign of this area of the factory. Finally, a short time looking at the freezer room, where we must consider capacity expansion. The increasing range and volume of product has recently led to a shortage of storage space. Also, if some of our large customers are moving towards just-in-time (JIT) deliveries, it may be necessary for us to support this with slightly increased inventory levels. The time has come for us to do a more detailed analysis of inventory, and if we leave this too late, we may end up having to rent more expensive storage space at exter- nal deep-freeze warehouses. On the way back to the office, passed the training room where a kaizen team was conducting a brainstorming session. Did not interrupt this. 15:00 to 15:45 Scheduled meeting with Charles Lamouche, Marketing Director, and Sara Lepont, Product Development Manager, concerning development of a new range of mini- patisseries. The concept is to supply products of about a third of the normal size, which can be used at parties and receptions. Market research indicates a big potential growth in this type of 'snacking'. However, these products will be significantly more difficult to make on our existing equipment and will require the development of new recipes and packaging which would together reduce the drying out of the products during the freezing stages. Although the recipes have proved successful in the trial kitchens, the time had come for full-scale production trials within the factory, most of the meeting was spent agreeing an outline schedule for this work. I reported on the capital equip ment requirements for this project. 15:45 to 17:00 Began writing my monthly report for the monthly Board meeting. This summarises the production statistics for the previous month, and requires an explanation for any signifi- cant shortfall. The main problems reported included lower than budgeted levels of productivity and material usage variances which indicate an above-average level of waste and scrap. I reported on the actions being taken to improve process control. I also reported that the decline in productivity was largely caused by last-minute schedule changes which were outside the control of production management The next section included details of capital requirements for new equipment needed over the next two years. Many of these items had already been included in the main capital budget, but the need for some new items had arisen as a result of changes in capacity requirements and unforeseen new product developments. A day in the life of Frederic Godt, Operations Manager, BonPain 37 18:00 to 18:10 Final check of production performance for today. Everything seems to be going well! Checked e-mail - only one significant new message, from the Operations Director. He is arranging a meeting with all his managers to begin work on the annual strategic review. This looks like being a big task ahead for me and the production team. 18:10 End of day, thank goodness. It's really amazing to see where my time goes! What a range of different things I seem to have been involved in today. But really, it is like that every day. End of taped record