ibm1000 operations and supply chain management

ibm1000 operations and supply chain management

Task

Case :“There Isn’t any Cookie Like a Soft Centered Chookie”

Doug had always wanted to be a baker. Even as a young teenager working in a local grocery store, he knew the world of baking was where his future lay. As he graduated college with a diploma in baking arts, he was very interested in the chemistry of taste, the science of creation and was always experimenting with new techniques and technology.  

One day while trying some new ideas, he made a combination white and dark chocolate dough mix and allowed the mix stand for 24 hours. He had a fan blow warm air over the dough which helped it build a light fluffy texture. This light fluffy cookie dough baked into a very fine cookie. However, Doug continued to experiment, trying different temperatures, different times, different cooling rates. When this special dough, when cooked precisely at 169 degrees Celsius for 7 minutes, immediately cooled, and topped with a chopped chocolate chip just above the melt point, then it was “Magic”.

The Chookie Doe Cookie company was born. Doug took a trip to the International Salon des Boulanger in Nice, France that year and came away winning the gold medal in the Chocolate cookie category. This solidified the fortunes of the new company.

Doug was chatting with his friend Matt about his discovery and early success in Nice, France. Matt had long been a computer genius, known for his coding and web mastery. He not only had a strong working knowledge in social media, but he also understood the fine details around programmatic advertising and algorithm targeting. Matt suggested he join Doug in the Chookie Doe Company, with Doug in charge of cookies and Matt in charge of marketing and business operations.

The new company was a web-based enterprise, selling cookies directly to retail customers and delivering them directly to homes.  The baking and production staff, a few people at head office, and a small call center formed the backbone of the company. The Chookie Doe Cookie Company was well on its way. And for those who have tried the now famous “Chookie Doe Cookie”, well, you know…….

However, the company was vulnerable. The recipe was delicate and required careful monitoring. They had determined a plus or minus of 3 degrees tolerance, but quality diminished even if the temperature was off by 1 degree, although not enough to undermine the product to reject it. The same could also be said about the baking.

Baking, 3o seconds over or under the time specification would lead to a poor- quality cookie. Rejected cookies could not be salvaged and were a total loss. Further, even more dangerous, was to have a faulty cookie get out to a customer. The baking process was very “hands on”, slow by most standards and limited the ability of the company to grow.

NEW …In comes the Difflemeir 3000, a modern baking system that had the most precise controls, systems and quality control systems in the world. At over $1 Million per system, this represented a huge investment but it offered the opportunity to triple production. Based on forecasting, customer feedback and market surveys for the next 3 years, this new baking capability would still leave their output a little short but not like now. If required they could add another baking module to increase capacity by 50%.

After the system had been installed and operated for about a month, backorders were disappearing. Revenue was at an all-time high. And then the complaints started.

At first the complaints were that the centers of the cookies were liquid. Then there were complaints of burned cookies. Chookies were sticking to packages. And some were arriving crushed. A quick review of their internet tools showed the following data:

Complaint

Number of incidents

Burned

127

Undercooked

85

Damaged

27

Wrong Number Shipped

7

Arrived late

3

Too expensive

1

 

The production and packaging manager, Wilbur, was meticulous, and tightly controlled the process. He insisted on checks to temperature and time while in oven which was written down in a control chart. He insisted on recalibrating belt speeds if there was any deviation from the process recipe. He also supervised quality control.

The senior management team sat down with the complaint data and reviewed the process. They walked through the process map for the baking process and everything seemed in line. They noted their seemed to be no deficits. However, they were able to trace the bad batches to three days in early June.

The control charts were as follows:

 

Temp/Time

Temp/Time

Temp/Time

Temp/Time

Temp/Time

June 11 am

170/6.59

170/6.59

170/6.59

170/6.59

170/6.59

June 11 pm

172/7.12

172/7.10

172/7.08

172/7.09

172/7.10

June 12 am

166/6.37

166/6.37

170/6.37

170/6.37

172/7.12

June 12 pm

170/6.59

170/6.59

170/6.59

170/6.59

170/6.59

June 13 am

170/6.59

170/6.59

170/6.59

170/6.59

170/6.59

June 13 pm

166/6.37

166/6.37

170/6.37

170/6.37

172/7.12

 

After interviewing the production team, they made a horrifying discovery. A new employee, who had been given a few hours of training on the new machine, was doing a mathematical conversion between Fahrenheit and Celsius because one of the manuals from the manufacturer had said Fahrenheit was a default for North American installations. And they discovered there had been only one person on the quality check instead of two. In fact, the process map did not mention anything abut two employees, and did say to convert Celsius differentials into Fahrenheit.

This mean that cookies that were being baked at 3 degrees above tolerance were actually being baked 5 degrees over or under due to the conversion mix up.

What this meant was this:

Variable

Process Mean

Process Std Deviation

Revised Process Mean

Revised Std. Deviation

Temperature

169

2.34

169

4.7

Time

7.00 minutes

.12

7.00

.12

 

Once they saw this data the company needed to develop an action plan. Perhaps you can help them.

Your answers to the following Questions via BB on the date and time indicated for your section on your course Syllabus

What process issues have been identified? How can you help Doug and team solve them?

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