HOME-STYLE COOKIES CASE ANALYSIS 1 Submitted by: George Ramselle P. Deposoy Georgia Hur Jinseog Noreen Rose A. Duran Garry A. Gallo Nina Jessa Marie Ladera Jan Rhett S. Simbulan Daisy Mae O. Tambolero December 13, 2012 COMPANY BACKGROUND The Lew-Mark Baking Company—Archway Cookie’s largest franchise is located in western New York State which produces fifty varieties of high-quality soft cookies with no preservatives added. The soft cookies mostly appeal to customers over 45 years old and to parents who have young children. The company has less than 200 employees, mostly blue-collar workers.
The production process begins as soon as orders from distributors arrive. Furthermore, the ingredients needed for each type of cookie entered into a computer which determines the amount of each ingredient needed, according to the quantity of cookies ordered, and relays that information to storage silos located outside the plant where the main ingredients are stored. The ingredients are then mixed and later on, the batter is cut into individual cookies. The company has also increased the length of each oven by 25 feet resulting in an increase of production rate.
The finished cookies are placed into boxes while deformed cookies are removed. This is done manually by workers. The boxes are then wrapped, sealed and label automatically. Most cookies are loaded immediately unto trucks and shipped to distributors. Some are stored in the warehouse but are shipped shortly after because of limited shelf life. CENTRAL PROBLEM The decision whether to adopt new production processes and alter some of the old ones and its effects to the entire production process as well as the product itself. OBJECTIVES To find the most favorable course of action that will benefit the entire company in the long-run * To exploit potential improvements and use it to their advantage * To improve the quality of the product SWOT ANALYSIS Strength * The product is very marketable especially to the health conscious segment of the society like the elders, and parents for children since it has no added preservatives—something which gives them an edge to other competitors. * Efficient in their production Weakness * The product has a short shelf-life. * Use of broken cookies as oatmeal cookies may distort the product itself Opportunities Automation of production processes * Less delivery lead time if they employ nearer suppliers—subject to the permission of the mother company * Product expansion—still subject to the permission of the mother company Threats * The company might lag behind other companies in terms of technology and productivity since they manually do the production processes. * Growth will be stagnant if they refuse to expand their product line ALTERNATIVE COURSES OF ACTIONS Automate the packaging process Advantage/s: * Saves money, more efficient, and time-saving
Disadvantages/s: * 30 workers in the production team will be rendered jobless. * Broken cookies might be included also in the packaging process since there is no one to take them off considering the shift from manual to automated. Use additives/preservatives in the ingredients to make cookies Advantage/s: * This will allow a longer shelf life to the cookies. * The company will be able to extend its current location points. Disadvantages/s: * The customers perception might change in terms of ‘quality’, knowing that the company is branded of producing ‘good food’.
Sell broken cookies Advantage/s: * This will ensure that all the products produced are fresh. If all broken cookies are used to make oatmeal cookies—that is, including filled cookies—it will distort the product itself Disadvantage/s: * Waste disposal costs would increase. Use suppliers located closer to the plant Advantages/s: * This will lessen delivery lead time and transportation costs They can also test if the products of the supplier can meet the same quality of their original suppliers’ products Disadvantage/s: Product quality may suffer. RECOMMENDATION The first, third and fourth ACA is recommended. Since the company is highly concerned of the quality of the product, they should use fresh ingredients and not just scraps from the other ones made. With regards to the waste disposal costs, they can just sell the broken pieces as animal food to zoos or other animal sanctuaries. The fourth one is also recommended since it will allow the company to save on some expenses.
If they are dubious about the quality, they may have a cookie taste test using the local products and compare it to their cookies which were made using their original suppliers’ products—that is of course subject to the approval of their franchisor. CONCLUSION Judging from the background given, the company is doing exceedingly well in the production of their products. They are highly efficient and effective as well. Their products are very marketable, inventory control is good, and their regard for quality is highly commendable. Conclusively, the over-all performance of the company is well and they are in control of the business.