Production, Kona Gold Coffees
Because our operation is small, production is responsible for all receiving,
production, inventory control, fulfillment, and the coordination of shipping. These
are the responsibilities of the operations chief, with the help of three
operator/assembly employees working one eight hour shift a day, at the start of
business.
As sales increase, the number for production may have to increase with it.
Working in shifts, we could double or triple our current production with the same
equipment, but we will wait for sales to dictate this change, since freshness is a
key. Because production payroll is a cost of sales, these increases would not
adversely affect our pro formas; on the contrary, our profit margins would
increase, in theory, because our rent per unit would go down.
When coffee is brought in, the lots are verified by computer and then received by
the operation chief. Daily, coffee beans are transferred from bins to three
operating grinders that grind the beans and convey the dry product to weigh-andfill machines that dispense precisely two ounces into each bag and seal the tops.
Our production department grinds, bags, and labels approximately 165 pounds of
completed product each day. Before all product go out, orders are verified by
computer, then transferred for fulfillment and shipment. This is the heart of the
daily production operation.
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For daily emergencies, we will use temporary human resources, several in Kona,
and for longer needs, seasonal or special holiday runs, we will use variable labor.
In a pinch, we have lined up one outside contractor who is capable of producing
60 percent of our daily workload with about a 10 percent efficiency drop at price
equal to 80 percent of our costs.