March 21, 2009

OPERATIONAL MANAGEMENT LESSON 7 EXERCISE– REFLECTIVE ONLINE LEARNING

"Take a look at a material processing operation. What types of stock control methodologies (re-order point, MRP, ERP etc.) are used? Comment on the possible reasons for the choice of method. If you can, conduct a sample Pareto (80/20) analysis of stock levels and stock usage (by value). How effective is the stock management?"

State of the art restaurant material processing operations

On the last years “state of the art cuisine” has increased its popularity into levels no one expected before. This art is today a complex process of transforming simple raw materials into complex mix of flavour, texture or smells in order to “transmit impressions, feelings, sensations, and experiences”.

No chef in history has received as much publicity as Ferran Adria. He is called an artist and is compared to Dali, Picasso and is often called a genius managing his Spanish restaurant “El Bulli".

El Bulli

Being the recipe of this commercial success based on a tremendous effort to reach art levels with food, the recipe for doing it on a profitable way must be based on a accurate control of resources, due to high price of its unique raw materials, and the importance of reaching quality levels on schedule.

A tasting menu on “El Bulli” could be for example based on several different “complex processes” such as:

*     Dishes that are foremost based on morphing, a concept which means that an ingredient is transformed into something else or into another state. Creations that show a great respect for the ingredient – although it is turned into another shape and form and a different taste angle

*     Dishes that are based on various earlier concepts developed by Adria mainly creations with an appearance different than what we normally associate with the name or looks of a dish.

*     Dishes that are more normal dishes but where a less than normal taste combination plays a part in the dish. Examples of this category were the civet of rabbit and the chocolate dessert with a black sesame sauce. Both these have been on the repertoire for a long time.

Analysing the complexity of this tasting menu, ant taking into account that it can be renewed on a monthly basis, we could categorize raw materials on a ABC Basis:

*     A - The most expensive and perishable raw materials that can mean more than 65 % of the inventory value but account for less than 20 % items stocked. These items depend highly on the composition of each tasting menu, so depending on the month they are stocked or not.

*     B – Not the most expensive raw materials on a value basis, but high perishable or high seasonality can mean more than 25 % of inventory value.

*     C – Basic raw materials (oil, garlic, sugar, salt, etc) with low cost of buying and low holding cost. or ones non really perishable (beverages, wine, etc) with high buying cost but low holding one.

Pareto

As every tasting menu is the outcome of a complex process with multiple ant interrelated tasks, the management of A Category items must be done through an MRP system, while the management of B and C categories could be done through a ROP system, as almost all tasting menus have this raw materials in common.

Focusing on A Category items, we could identify:

*     The bill of materials would be the list of all raw materials required to form the complete tasting menu, remember this tasting menu is changed periodically, being important to analyse the impact it would have on the rest of the MRP system

*     The item master file would keep track of every raw material and its specifications

*     Transaction file would keep track of all transactions

*     Location file is crucial to make possible a high speed kitchen daily work

*     MRP explosion must be measured and control on detail to assure quality on time reducing economic potential losses

So analysing briefly the “state of the art cuisine” we can see how important can be the Operations Manager role not only on the quality of final design but on the profitability of it.


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