Frito Lay Case Study

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CASE STUDY QUESTIONS OF FRITO-LAY:

Frito-Lay: Operations Management in Manufacturing

1. Design of goods and services: In the food industry this is done by establishing product development kitchens. These kitchens experiment with new products and submit them to focus groups. These groups perform market testing that set the specification of the product.

2. Managing quality: Quality is the most important factor at Frito-Lay. Potatoes used in Ruffles and corn used in Fritos are inspected at the farm. Quality is monitored by visual inspections and statistical process control of product variables such as oil, moisture, seasoning, salt, thickness and weight. Quality evaluation is conducted throughout the manufacturing process till the item is delivered.

3. Process and capacity design: The production process is designed for large volumes and small variety using expensive special-purpose equipment.

4. Location strategy: Frito-Lay facilities are located regionally, using rapid delivery as criteria for the selection of its facility’s location. The company’s main aim is to distribute fresh products.

5. Layout strategy: The layout strategy focuses on efficiency. ¬ The facility has to be sanitary and it should big enough to hold production lines for fast processing of the products.

6. Human resources and job design: The facility requires cross-trained workers who are able to handle a variety of production lines. They are provided with promotion paths that are related with their skill set. The company provides benefits to its employees by offering medical, retirement and educational plans. Since the plant operates 24 hours, the worker’s shifts are divided into four shifts per week.

7. Supply-chain management: The company has integrated trusted vendors into their supply chain since the raw-materials used for production are perishable and needs to be shipped under 12 hours.

8. Inventory, material requirements planning and JIT: The company requires just-in-time delivery and low raw material and finished goods inventory. There is low work-in-process inventory because of the continuous flow of production done by specialized equipment.

9. Intermediate and short-term scheduling: The company runs on a tight schedule and workers are given work hours.

10. Maintenance: Frito-Lay has a trained workforce that is capable of recognizing problems at an early stage because any delay in the production process can harm the business. Professional maintenance staff are available on every shift to avoid any delays in the process.

2. Productivity of production process at Frito-Lay

Productivity is determined by dividing the units produced by the input used. To determine the productivity of the production process of Frito- Lay the units produced by the factory must be divided by the input used which includes the sum of: labor, raw-materials, energy, capital and miscellaneous expenses.

3. The production process of Frito- Lay compared with the service operations with Hard Rock café differs in the sense that both 10 decisions focus on different commodities. Frito-Lay focuses on its products that requires freshness while Hard Rock café focuses on its intangible services, customer experience and tangible food. Frito-Lay can introduce new product line whereas Hard Rock café serves as a themed restaurant. Both companies focus on quality; Frito-Lay uses statistical process and team meetings while Hard Rock café maintains its quality by handing out customer surveys. The process of for Frito-lays begins at the farm where its ingredients are produced while Hard Rock café’s process begins when they start serving customers. The location of the facilities differs as Hard Rock café sets up its facilities in tourist’s destinations for more customers while Frito-Lays facilities are established regionally for fast delivery. The layout of both companies place high regard to efficiency. Hard Rock café hires employees based on their interpersonal skills and their taste in music while Frito-Lay hires individuals who are crossed trained and skilled. Supply chain management in Frito-Lay is very important as the company’s raw materials are perishable while in Hard Rock café the food service is crucial. Since Hard Rock café is a themed restaurant, its inventory mainly consists of memorabilia. Hard Rock is the world’s leading collector of rock and roll memorabilia. In Frito-Lay the inventory is kept to the minimum since its raw materials are perishable. Frito-Lay is capital intensive and has a tight schedule while Hard Rock’s scheduling fluctuates depending on sales and demand for food. Both companies focus on maintenance of their equipment and do regular checks.

CASE STUDY QUESTIONS OF HARD ROCK CAFE:

10 decisions of operations management in Hard Rock Cafe-

- Design of goods and services- Goods at hard rock are both tangible as well as intangible. Tangible products are food and retail merchandise and the intangible products are music, memorabilia and service. These products are designed after a lot of research and are aimed to maintain the reputation of the cafe as the rock music cafe.

- Managing quality- surveys are done to rate the products of hard rock cafe ranging from (1-7) if not 7 it is a failure. This is how they manage the quality that makes them leaders their industry.

- Process and capacity design- process of food making is divided into two stages at the cafe-

- Stage 1- designing, testing, analyzing for cost of ingredients, labor requirements and customer satisfaction

- Stage 2- after checking the availability of ingredients they are approved for production where they are; received, cold storage and grilling/baking/frying

- Services at Orlando studio cafe is continuously improved by mandating the employees to participate in 15 min session that educates them about changed demands in tourist environment.

- Location strategy- Generally near tourist destinations but has changed to be global company having its branches at multiple destinations including- 129 cafes and 12 hotels/casinos.

- Layout strategy- Kitchen Flows complement the food preparation, which is aimed at achieving maximum efficiency. The restaurant and bar layout are strategies around memorabilia to emphasize on their rock culture. The memorabilia are enhanced by- lighting and sound.

- Human resources and job design-