A. Synopsis
Copper Kettle Catering is a full service catering company that was established in 1972. They have subsequently grown to be one of the largest catering businesses in North Carolina. They have two different types of customer demands. They have a “delivery only” side of the business which focuses on preparing and delivering same day box lunches with a limited menu. The demand for this service remains fairly constant throughout the year. They also have a “deliver and serve” side of the business which focuses on catering large parties, dinners, and weddings. The lead time for this service is much longer. Customers usually book dates and choose menu items weeks or months in advance. This service also requires a much larger and diverse menu and the demand is much more seasonal. CKC’s facilities support both operations and their physical facilities layout resembles that of a job process.
They have 10 full time employees; and all except the cook, are flexible and can move between tasks as needed. CKC realizes that the catering business is very competitive and they have identified and prioritized their competitive priorities. They have recently noticed that customers are demanding more flexibility and faster response times. Small specialty caterers have recently entered the market and are able to satisfy these customer demands. Wayne and Janet Williams, the owners of CKC are impressed by the lean systems concept; however, they are concerned whether or not lean concepts and practices are transferable to their service business.
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B. Purpose
The purpose of this case study is to discuss and better understand the concept of lean systems and how management can apply lean concepts and practices to a service business through process management, inventory management, work flow and flexibility, and scheduling and delivery, to help CKC make improvements and gain a competitive advantage. We will try and determine how to use the lean systems concept to help reduce lead times, improve flexibility, decrease delivery times and add overall value.
C. Analysis
Question 1 – Are the operations of Copper Kettle Catering conducive to the application of lean concepts and practices? Explain. Yes, the operations of Copper Kettle Catering are absolutely conducive to the application of lean concepts and practices. Lean systems, in general, focus on high quality coming in and going out, improving inventory turnover, which helps lower inventory levels and reduces costs, and reducing setup times, simplifying processes, and reducing waste. All of these lean practices can be applied to CKC and their processes to help them try and meet the objectives that they are seeking for their company. Both the “deliver only” and “deliver and serve” components of the business use more of a “pull method” for the flow of material when filling orders. Most lean operations use this method. The “deliver and serve” side of the business probably uses the pull method a little more. The production of the food items is activated by customer demand. In my opinion, CKC definitely focuses on “quality at the source”.
They need to consistently meet customer’s expectations of quality. Especially, since they are dealing with food items, quality, freshness, and taste are of utmost importance. The quality of the raw materials/ingredients going in to the product must be as good as the finished product going out. A lean system works best if the daily load on individual workstations is relatively uniform. The case study article states that “the physical facilities layout resembles that of a job process” and also states that there are five major work areas. CKC appears to have relatively uniform workstation loads by spreading them out where each workstation handles separate but similar duties. Also CKC requires customers for the “delivery only” side of the business to call in orders by 10AM and the “deliver and serve” side of the business receives orders weeks and months ahead of time, this helps to establish sort of a reservation system so that production of items can be somewhat scheduled in advance, contributing to uniform workstations. In repetitive service operations, efficiencies can be gained by standardization. Standardization increases the total quantity that can be produced from a single or limited amount of items.
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This also tends to increase productivity because of less complexity of each job and because workers learn to do their jobs more efficiently with increased repetition. CKC has a relatively simple menu and also limited inventory space to carry numerous items anyhow, so the simple and limited menu allows for some standardization. Also, as previously mentioned, CKC has five major separate work stations, each repetitively performing its own task or process. These processes at each of these stations are repeatable and therefore conducive to standardization. According to our book, the role of workers is elevated in a lean system. Lean systems require a flexible workforce. Workers in flexible workforces can be trained to perform more than one job. A primary benefit of this is that workers can be moved from one workstation to another to help relieve bottlenecks should they arise. Also, if an employee is out sick or on vacation, another employee can step in for them to keeps product flow moving. Uniform flow is an important aspect of lean systems. CKC has 10 full time employees and all, except the cooks, are flexible and can move from station to station if needed.
Companies using lean systems need to have stable master production schedules, small, frequent, and reliable deliveries, and short setup times. CKC’s “deliver and serve” orders are booked well in advance and the Williamses can plan stable schedules at the beginning of every week. The case study articles states “Each Monday, the Williamses develop the schedule of “deliver and serve” orders to be processed each day. CKC typically has multiple “deliver and serve” orders to fill each day of the week. This level of demand allows certain efficiency in the preparation of multiple orders.”
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As for small lot sizes and short setup times, the case study mentions that CKC has space limitations and obviously since they are dealing with food items there is a risk of spoilage which limits the amount of raw materials that can be carried in inventory at any one time. Due to these factors, CKC most likely has small, frequent, and reliable deliveries short set up times. The short set up times definitely apply to the “deliver only” orders since they are scheduled and processed daily. The food preparation processes at each station also appear to be clearly visible so that workers can constantly monitor the processes and track the flow of materials or products, which is also necessary and conducive to a lean systems process.
Question 2 – What, if any, are the major barriers to implementing a lean system at Copper Kettle Catering? There are several barriers that CKC may face if they decide to try and implement a lean system. They have noticed that customers are demanding more flexibility and faster response times. To continue with their current level of response times and to be able to respond even quicker, CKC will have to make sure that their supplier relationships are excellent. These relationships are extremely important so that they can be assured that they will receive fresh, quality ingredients and that the deliveries will be reliable and on time. Without these relationships, they will not be able to respond quickly and this could present a barrier. Since they cannot keep a large inventory on hand, they greatly depend on their suppliers and their reliable deliveries. Also, some of their dessert vendors require them to physically go and pick up these orders. This is obviously a barrier to a lean process system. The case study mentions that CKC’s physical facilities layout resembles that of a job process.
A job process or job shop is described as an operation that specializes in low to medium volume production and utilizes a job or batch processes. It has the flexibility to produce a wide variety of products in significant quantities; however, there is still considerable divergence in the steps performed. This setup may be a barrier for a lean system process. CKC may wish to consider redesigning their facilities layout to resemble more of a flow shop if at all possible. A flow shop is an operation that specializes in medium to high volume production and utilizes line or continuous flow processes. This would be more conducive to a lean system. Another barrier for CKC could be standardization. Even though their limited menu currently allows for some standardization, if they wish to face their competition and be more flexible with their menu and offer more and different items, the variability in each order may inhibit standardization. Depending on how diverse their menu becomes, their facility could turn into more of a custom job shop which is counterproductive to a lean system.
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The somewhat unpredictable, seasonal demand for the “deliver and serve” side could also present a barrier. CKC is actually providing service for two different markets and they each actually require two different types of operating systems to completely satisfy both sets of customers. And although similar, they are both slightly different in the order of their competitive priorities. The “deliver only” side would focus more on quality, delivery reliability, and cost; and the “deliver and serve” side would seem to focus more on quality, flexibility in both type of request and menu items, response time, and cost. Having two different operating systems with different competitive priorities presents another possible barrier to implementing a lean system.
Question 3 – What would you recommend that Wayne and Janet Williams do to take advantage of lean concepts in operating CKC? To take advantage of lean concepts that could be applied in operating CKC, the Williamses may want to try and separate each side of the business, the “deliver only side” and the “deliver and serve side”. In doing this, they will be able to focus on each of the operations separately and focus on each of their different competitive priorities. Since the current layout resembles a job process, the Williamses may want to redesign the layout for each operation to resemble more of a flow shop or have more of a flow pattern if possible. This should definitely be a possibility for the “deliver only” side of the business since they have fewer menu items and a little more standardization than the “deliver and serve” side. The layout for each operation should be clean, neat, organized, and clearly visible to try and reduce cycle times at each station which should also help to reduce lead times. CKC may want to try and consolidate or reduce their number of suppliers.
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Having only a limited number of reliable suppliers that always provide on time, fresh, quality products could help their operations be more efficient. They could also focus on building excellent relationships with these suppliers and provide them with information regarding their customer’s demand patterns and needs for each side of the business. They should be able to leverage these relationships for lower raw material costs. CKC may also only want to focus on the dessert vendors that provide delivery. This would save a great deal of time that is wasted to have one of themselves or an employee drive around and pick up desserts. With a limited menu, they should be able to locate a vendor that delivers and can provide all of their needed desserts. They should develop an excellent relationship also with this vendor and if they are purchasing all of the desserts from one vendor they should also be able to negotiate better prices. While on the topic of suppliers and materials, CKC may want to try and limit menu selection, at least for the “deliver only” side of the business.
This would help with standardization at the work stations and in the entire processes for both sides. This would also help reduce cycle times as well as lead times and increase efficiency and productivity. Limiting menu selection would also reduce the need for raw materials and therefore reduce inventory levels which are a factor at CKC since it is mentioned that they have limited space and also the possibility of spoilage. CKC, however, needs to absolutely identify their customer’s needs before implementing this option. The case study mentions that customers are beginning to demand more menu flexibility; so limiting menu selection may not be an option but CKC should consider all of their options. CKC already appears to have a somewhat flexible workforce with their 10 employees. They are all flexible and can move from station to station except for the cooks. CKC may want to focus on more cross training of their full time as well as their part time employees and may want to cross train an employee or two to assist the cooks and handle some but not all of their work if needed. D. Recommendations
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The recommendations for CKC are explained in question 3 (see above).
Basically, I would recommend that CKC focus separately on each of their operations, the “deliver only side” and the “deliver and serve” side. By doing this they should be able to reevaluate their competitive priorities and better determine what lean processes they can implement for both sides to improve flexibility and response times. They should try and determine if it would be feasible to redesign the layout for each side and develop more of a flow pattern in each of their processes.
They should keep make each work station clearly visible and keep them clean, neat and specifically organized so that items are easy to find and use. They could also try and employ signaling techniques for the flow and movement of the work from station to station maybe by some type of color coded cards stating what each individual work station or employee may need. They should focus on reducing the number of suppliers and developing close, symbiotic and beneficial relationships with them. They should also try and maintain only dessert vendors that deliver. They should absolutely maintain their employee flexibility and provide more cross training if possible. These lean system recommendations should help CKC increase flexibility, reduce lead times and lower cost.
Reference:
Krajewski, Lee J.; Ritzman, Larry P.; and Malhotra; Manoj K. (2013), Operations Management: Processes and Supply Chains, Pearson Education, 10th Edition
