Each store contains about 16,000 square feet stocked with the finest imported and domestic foods in departments such as, Bakery and Pastries, Produce, Meat and Seafood, Condiments and Packaged Foods, and Cheese’s and Specialty Dairy Products (Apollo, 2007).
Kudler Fine Foods must have a loyal customer base as demonstrated by a $2. 3 million gross profit in 2003 (Apollo, 2007).
According to Kudler’s growth strategy, they plan to increase their profit margin in the next year by adding high-margin services and reducing costs by providing more efficient operations (Apollo, 2007).
Kudler Fine Foods’ continued success will stem from more efficient operation and logistic systems. Current Operation and Logistic Systems Accounting Network Kudler Fine Foods’ original business plan accounted for $50,000 to hire a consulting firm, Smith Systems Consulting, to install a Retail Enterprise management system (REMS) in the initial store (REMS) (Apollo, 2007).
A REMS allows system administrators to manage devises at different data centers (Kakadia, 2002).
A scalable Retail Management System (RMS) was chosen to manage operational devises communicate to the server which contains the accounting software (Apollo, 2007).
The following two stores also use the Retail Management System. The three stores are networked, so sales and accounting information can be seen and utilized from a central location. The accounting information is collected by the cash registers called point-of-sale (POS) terminals (Apollo, 2007).
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The job of a fast food restaurant store manager can be very challenging and also rewarding. It requires leadership skills and the ability to run a successful business. The manager will usually have to go through extensive training either on the job, away at a class provided by the restaurant chain or on their own through personal skills developed at previous jobs or through school. The job mainly ...
The POS terminals record and transmit the daily sales transaction activity through the RMS to Finance and Accounting Modules. Once in the modules the accounting data is used to produce financial reports and budgets, pay vendors, manage credit and debit transactions, and reconcile bank accounts. Purchasing
Kudler Fine Foods purchasing is done by the owner and store managers (Apollo, 2007).
Individually, the store managers determine purchasing requirements for each of their respective stores (Apollo, 2007).
It is up to each store manager to obtain the best price, quality, and delivery possible; however, they are encouraged to communicate with each other in order to find the best deals (Apollo, 2007).
The mangers may even order in bulk and split the inventory among the store to take advantage of discount pricing (Apollo, 2007).
The primary instrument used for purchases is a standard Purchase Order (PO) form.
Once a Purchase Order is prepared it may be submitted to vendors in a variety of ways, such as, mailed, emailed, hand-delivered, or faxed (Apollo, 2007).
Kudler Fine Foods’ Purchase Order system is the key tracking and financial document used for each order (Apollo, 2007).
Inventory Management Kudler Fine Foods’ inventory management system consists of multiple components. They use the POS terminals to track out-going inventory (Apollo, 2007).
In-coming inventory is received manually by the store managers. Verification of the in-coming inventory is done by comparing the Purchase Order to the shipment received.
Existing inventory is tracked using spreadsheets and a Microsoft Access database, which is not connected to the RMS. (Apollo, 2007).
Once in a while an inventory audit must be done by physically counting each item in inventory. Kudler Fine Foods must maintain a balance between having enough inventory to meet customer demand – avoiding stock-outs – and having excess inventory resulting in write-downs (Apollo, 2007).
The Term Paper on Kudler Fine Foods
... products the customers buys frequently. Also, the databases should store user interface information, since Kudler’s Fine Food is run from a website. Particularly, Kudler ... management (SCM) system to record purchasing agreements and query inventory status”.( Apollo Group 2004)In this case the internet wouldn’t be an alternative ...
Therefore, it is crucial for Kudler to be able to manage its inventory quickly and efficiently because it is directly related to customer demand and satisfaction.
Forecasting Forecasting demand is vital to Kudler’s success. As shown above, forecasting demand directly relates to inventory management and customer satisfaction, and it has always been a challenge for Kudler Fine Foods (Apollo, 2007).
Kudler uses historical sales data, extrapolated from the RMS, for the past three years in order to forecast customer demand (Apollo, 2007).
Monthly forecasts are produced for the following quarter and semi-annual period by using sales data from the previous year (Apollo, 2007).
This has been an inaccurate method of forecasting, which has resulted in excess, obsolete inventory that had to be discounted for sale (Apollo, 2007).
Merchandising and Pricing Customers demand up-to-date and fresh products to purchase; therefore, Kudler Fine Foods must analyze gourmet food trends and change the selection of products to meet demand (Apollo, 2007).
Monthly trend analysis is performed to determine products that are selling above and below projections, not selling at all, yielding the highest net profit (Apollo, 2007).
Products that are selling well are purchased for inventory and merchandised, and products that are not selling are discounted and discontinued. Determining new merchandise to carry and pricing is done by Kathy Kudler. She benchmarks against her competitors, monitors gourmet magazines and web sites, and attends gourmet conventions to find the latest and greatest gourmet food products to stock (Apollo, 2007).
Then she purchases a small lot of new products to review with the store managers, and they decide if they will stock them or not (Apollo, 2007).
Marketing and Advertising
Once new products are accepted in inventory it is important for Kudler Fine Foods to advertise them. Kathy Kudler prepares advertisements in local newspapers for all three stores (Apollo, 2007).
She coordinates with the store managers, though weekly meetings, to ensure each store has the appropriate advertised merchandise (Apollo, 2007).
Sometimes demand for a product is higher at a particular store, so merchandise must be moved between the stores (Apollo, 2007).
Kudler Fine Foods’ marketing strategy focuses on customer loyalty and profitability of consumers (Apollo, 2007).
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In order to develop marketing plans Kudler has to tediously, manually track historical sales data in order to analyze marketing trends. Based on the analysis, they plan to expand services, institute a frequent shopper program, and increase efficiency of marketing efforts (Apollo, 2007).
Kudler’s Marketing budget is formed by analyzing past Marketing expenditures in order to predict costs of marketing activities such as, radio, newspaper, and television advertising and public relation events and sponsorships (Apollo, 2007).
Opportunity to Improve Operations and Logistics
Kudler Fine Foods is growing out of its current operation and logistic systems. Methods that worked for a one store operation have become cumbersome and time consuming. Kudler Fine Foods should streamline its information technology. This would improve Kudler’s operations and logistics by eliminating redundant tasks, reducing costs, and becoming an industry pioneer. Improve Information Technology The single most important step Kudler Fine Foods should take to improve operations and logistics is to update its information technology system.
They have out grown the Retail Management System that was implemented in the initial store. Their current RMS only supplies transactions actions data to one business function: Accounting. Data regarding other business functions inventory, purchasing, shipping/receiving, human resources, marketing are not represented by the RMS. For example, forecasting data must be manually extrapolated out of the accounting/financial data and entered into a spreadsheet to be used, and Purchase Orders are manually filled out and not connected to the RMS.
These methods are time consuming and a waste of resources. Kudler Fine Foods data is decentralized and spread out among all business units. The solution is implementing an Enterprise Resource Planning (ERP) system. An ERP system uses compatible hardware and software components to centralize and integrate entire organizational data into one unified system (Tech-Faq. com, 2007).
ERP systems use a unified database to store data for all business functions such as Marketing, Accounting, Human Resources, Purchasing, Supply Chain Management (Tech-Faq. om, 2007).
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An ERP system would allow the three Kudler stores to seamlessly integrate data in one location. This would improve productivity because management only has to look in one location in order to analyze data. Specific Examples of Improvement by ERP From one location, Kathy Kudler could use the ERP software to instantly see what products have been selling well, check inventory levels of those products, schedule merchandise moves if one store had an excess, and order more of the product directly from the vendor.
She could also create queries combining forecasted demand, historical sales data, and estimate human resources needed to create Marketing budgets and events. Kudler management could use the ERP system set predetermined levels of inventory based on sales data and vendors could check inventory and autonomously replenish inventory as needed. This proactive inventory approach would help ensure customer satisfaction/loyalty and reduce labor costs, thereby achieving Kudler Foods growth strategy. References: Apollo Group, Inc. (2007).
Kudler Fine Foods Virtual Organization. Retrieved February 25, 2008, from University of Phoenix, rEsource. Business Systems 502 Web site: https://ecampus. phoenix. edu/secure/aapd/CIST/VOP/Business/Kudler. Kakadia, Deepak, et al (2002).
Enterprise Management Systems Part I: Architectures and Standards. Retrieved February 25, 2008, from Sun Microsystems Web site: http://www. sun. com/blueprints/0402/ems1. pdf. Tech-Faq. com (2007).
What is ERP? Retrieved February 25, 2008, from Tech-Faq. com Web site: http://www. tech-faq. com/erp. shtml.
