1. Food Factories
is involved in running a grocery store? A lot. Every day, managers must make
thousands of decisions regarding inventory (what to buy and how much), job
scheduling and assignment (i.e. how many employees in which departments and
what jobs should be done and in what order), and quality (how to ensure good
products are sold and good service is provided). And this is for just one
Kroger Co., headquartered in Cincinnati, Ohio, it operates over 2,400
supermarkets, with revenues of more than $70 billion and has over 300,000
employees. It is the second largest grocery retailer in the U.S. after
Wal-Mart. Efficient and effective operations are one of its keys to excellence.
Yet, when we think of groceries it is usually in terms of services – after all,
stores don’t make anything do they? Actually, they do.
owns 40 different manufacturing plants (a competitor, Safeway, owns 32). These
manufacturing plants make roughly 14,400 in-house (also known as generic)
products, including 38,000 “party pails” of ice cream per day – which sell for
$2.99 each, or approximately 30% of the cost for name brand ice cream such as
Dreyer’s, Ben & Jerry’s or Graeter’s. Stores like making their own because
they often can get a higher profit margin on in-house products than for name brand
products – because they are controlling more of the process, hence are
providing more value.
is selling 15% more in-house products by volume this year due to the down
economy. Consumers often will trade a lower cost for that name brand. In fact,
industry wide, sales of store-branded items increased nearly 10% over the past
year. In-house products account for 35% of Kroger’s sales, up from 31 percent
five years ago. In a down economy, this growth is resulting in increased hiring
– Kroger created 400 new manufacturing jobs in the last year for a total of
the next time you shop for groceries, give a thought to where those groceries
came from – it might not be where you think.
to Consider while responding to this essay question
do the practices described above relate to operations and supply chain strategy
(chapter 1) and process design and analysis (Chapter 4)?
the main challenges of running a food manufacturing plant. How are these
similar to or different from running a grocery chain or store?
you think that Kroger ships directly from the factories to its individual
stores? Or does it ship products to an intermediate distribution center and
from there to its stores?
should Kroger treat these facilities? Should they be exclusive to Kroger, or
should they provide sales to other retailers? How does this affect forecasting?
What are the advantages and disadvantages if Kroger uses the factories to
produce products for other retailers?
1. A sports fan in 2010 is able to follow their team in a number of
ways – on television, on the internet, in a newspaper or on the radio. What
most sports fans don’t realize is that there is a huge amount of behind the
scenes action in putting together a televised broadcast – operations play a key
role. Take a Columbus Bluejackets hockey game for the NHL. A typical local
(i.e. not national) Fox Sports Ohio broad cast of a game requires:
Travis Williams, director Christian Roberts and a crew of 25 people.
cameramen – and cameras
Roberts choreographs an intricate dance – telling cameramen what to shoot and
when, choosing from multiple screen shots, deciding when to air commercials –
after all someone does need to pay for the broadcast – and choosing when to air
the following descriptions of the scene behind the scenes from a recent
Columbus Dispatch article:
ahead of the scheduled 7 PM start, Ed Milliken, sits in front of the 40 video
screens and puts on headphones. “Hello darlings” he says to announcers Davidge
and Jeff Rimer. As captain of the ship, Milliken spends the evening telling
commentators how long to talk and giving them game-related insights to repeat.
He decides simultaneously what viewers will see – a wide look at the ice, a
scan of fans, a close-up of a player. Next to Milliken, director Christian
Roberts makes the captain’s requests happen – guiding the 12 cameramen
stationed throughout the arena. Seven people in the truck – parked in the
loading dock since 10 AM – handle the sound and graphics and track player
statistics. During the first period, Riner calls Jackets defenseman Anton Stralman
by the wrong name – Thrashers defensemen Ron Hainsey – and the crew notices.”
activity continues for nearly three hours. Crew members look forward to breaks
in the game so that they can air commercials and take a very short break. Yet,
they don’t get any for nearly 20 minutes – at one point joking “Can you throw
some nickels out on the ice”. Think about how hockey differs from basketball,
football and baseball in terms of breaks in play and timeouts – this makes a
smooth broadcast more challenging. Late in the game, Roberts has to keep a
careful eye on both the action, and where he expects the action to be: “With
five minutes left in the game and the Jackets up 2-0, Milliken starts talking
about the stars of the game. The clock reaches 2:30 and Roberts tells a
cameraman to “sit on the white goalie”, referring to Johan Hedberg of the
Thrashers. Atlanta pulls Hedberg and fans at home see him skate off the ice” In
short, televising a sporting event requires a lot of work, many people and some
good operations management.
to Consider while responding to this essay question
do television stations/networks handle unexpected events or long delays in a
game? What is the equivalent of inventory for if something goes wrong?
elements of project management contribute to a smooth/good broadcast? (Chapter
8: Project Management)