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Winchell's Manufacturing Process
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Running head: WINCHELL'S MANUFACTURING PROCESS |
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WINCHELL'S MANUFACTURING PROCESS |
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Winchell's Manufacturing Process
Winchell’s uses a make to stock process design for one day use only. Winchell’s must have enough doughnuts in stock to provide a capacity cushion (Jacobs & Chase, 2011). A cushion will allow the business to provide enough inventory to each customer on demand. Each Winchell’s location projects their own needed inventory for each day. The inventory requirements could change every day of the week. Doughnuts could be demanded more on a Monday morning by busy employees who are gathering goodies for their fellow co-workers. Accurate inventory projections are essential for success and reduction of waste.
Unique and Interesting Items
Winchell’s cannot make doughnuts to order due to the time consuming processes required. The company make their doughnuts in the early mornings before the business is open. Doughnuts are produced in batches of the same type: Glazed or buttermilk, etc. These separate batches are made in large quantities reducing redundancies and bottlenecking (Jacobs & Chase, 2011). There are two items in the process which draws interest: timing and quantity.
Timing
The timing of the process becomes more critical when a new day brings change in demand. A business could find a slow demand for doughnuts on a Sunday morning and see a peak in sales by ten-in-the-morning. If the doughnuts were made to early this could cause the product to be stale by the time it was sold. If it was Halloween day during the work week, many people are up early for work. They plan on buying something quick to bring to work. They do not have time to wait. It must be now. The timing of the product readiness is paramount. In the early 2000’s Winchell had multiple locations yet it struggled to keep up with Krispy Kreme who had massive marketing which increased its sales revenue. To get a competitive edge, Winchell implemented a new marking strategy called the Warm ‘N’ Fresh Promise, where donuts would be made in smaller batches and not be kept out longer than three hours ensuring quality freshness to its costumer (Hernandez, 1999). It is interesting to see that despite its long history of making donuts and multiple locations, the company found it more profitable to go back to the basic and only bake in small batches.
Quantity. Knowing how much to make is the key to success while reducing of waste. The location of each Winchell’s needs to know their customers and the potential of getting a larger order all at once. Quantity requirements change daily. Too much product creates a waste in material and labor costs. Too little product causes a loss in customers. Quantity management of a doughnut manufacturer requires precise calculations. Also because doughnuts are a perishable item and Winchell follows the Warm ‘N’ Fresh Promise, their bakeries need to project the amount potential sales accurately. According to the “Government of Canada” (2012) website, a study was done on the eating habits of Americans, it showed that majority of doughnut consumption is done in mornings and the most common day of the week is Sunday. Season wise, spring and summer create the most profit but it is the holiday in the fall and winter, Thanksgiving and New Years that produce approximately 10% of their sales.
References
Jacobs, F.R. & Chase, R. (2011). Operations and supply chain management (13th ed.) Boston, MA: McGraw-Hill Irwin.
