Our fictional case study company

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OPMT 2298 – Business Process Improvement
Case study:  Flour Power Organics

Background
Our fictional case study company, Flour Power Organics, sells organic, artisan flour and baking supplies online.  Delivering quality baking foods & supplies at a good value is the mission of the small warehouse owned by Nina & Pisha.  They started the online venture in Jan 2013.  Despite increase in sales over the last 12 months, the expenses incurred over the year have resulted in negative EBIT (earnings before income taxes) for the first year.  Critical to the quality and variety of the products they supply it is essential they manage their operations at the lowest cost possible.  Fortunately, as part of their business plan they developed few key performance measures and have been collecting data from day one of their business. 
The Problem
To ensure the right product is delivered at the right time to the right customer is the primary focus of a distribution business.  May sound simple but there are several underlying processes that occur to meet the above mentioned objective.  During the annual budget assessment Nina & Pisha identified a few areas where the cost exceeded than expected.   They believe in data driven decisions, however since they are occupied performing several roles to keep the business running they have not been able to dive into the data to analyze trends that will help them improve their business.
Opportunity
Your team has been selected to perform a ‘Business Process Improvement’ exercise using the data spreadsheet (provided separately). 
**Financial assessment noted in attachment
OPMT 2298 – Business Process Improvement
Case Study:  Flour Power Organics
Notes:
Layout
Flour power warehouse has standard racking with six shelves on each rack to store product
There are 4 racks in total, one racking each placed against the wall and 2 in the middle with their backs against each other.

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Receiving & Put away
Flour power receives delivery from the manufacturers 5 times a week (deliveries are dropped off all day long)
Product is placed on shelves as it is received i.e. same packaging
Some products are received in bulk quantities (packages of 6 or 12), however at the time of delivery the bulk packages are cut open to ship single units
Nina & Pisha do not have formal training and procedures in place on receiving and put away of products. The tasks listed in process steps are often performed in parallel

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Other
87% of the products have a shelf life of 3 months
In order to maximize on the volume discounts, certain products from manufacturers are purchased in large quantities which are stored in the small storage room.
They are often repackaging products prior to shipment (i.e. not able to resell as is)
Inventory & orders are tracked manually on a spreadsheet
Provide deliveries to customers on a daily basis.  All orders must be shipped by 3 pm.

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