Broadway Caf

Memo
To: Directors of Operations and Sales From: John Klein Date:
10/26/2013

After conducting a thorough analysis, it has been concluded that there is opportunity for improving profits on revenue for the sales of Broadway Caf coffee beans to supermarkets. This can be done by improving and reengineering the new bulk packaging process. I have investigated the current process and modeled potential financial impacts of several changes and potential regulatory changes. To begin, Case 1 was left unchanged and models our current process with Average Cycle Duration of 2.25333, Average Working Duration of .23833 and Average Total Costs of 2.97917. In case 2 however, I changed the percentage of items that required wooden packaging from 30% to 75%. I additionally changed the percentage of items that require cardboard packaging from 70% to 25%. This resulted in an Average Cycle Duration of 13.55667, an Average Working Duration of .61167, and an Average Total Costs of 7.64583. Each of which is significantly higher than our original Case 1 Process. Originally there was two warehouse clerks, however in case 3 it was decided to replace the two clerks with only one more efficient one who can perform the same work as the original two, in the same amount of time. Resulting in an Average Cycle Duration of 2.35250, an Average Working Duration

of .15583, and an Average Total Cost of 7.94792. One important piece of data for Case 3 is the significant lower average total costs compared with our original case. In Case 4, a new step Inspect Ordered Items was added. This task was performed after the wooden packaging was completed. This additional task resulted in a slightly higher Average Cycle Duration, Average Working Duration, and Average Total Costs. For the last case I changed the percentage of items that require wooden packaging to 90% and the percentage of items that require cardboard to 10%. I also decided to use one clerk similar to Case 3 and reduce the duration to 18, which is a 60% decrease. My conclusions found that Wooden packaging should be taken out. From viewing these results Ive decided the best option amongst these 5 cases would be Case 5 because it has the lowest average total cost out of all the cases equaling 1.30833. Also the average cycle duration and average working duration is also the lowest amongst all the other cases equaling 2.04933 for ACD and .10467 for AWD. This leads me to conclude that choosing case 5 and increasing the percentage of items that require cardboard packaging to a much higher percentage of 90% compared to a low percentage of 10% for cardboard is the best route to improving our profits for on our revenue for the sales of Broadway Caf coffee beans to supermarkets

Case 1 Case 2 Case 3 Case 4 Case 5

Average Cycle Duration 2.25333 13.55667 2.35250 2.43833 2.04933

Average Working Duration .23833 .61167 .15583 .25667 .10467

Average Total Costs 2.97917 7.64583 1.94792 3.02500 1.30833

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