lOMoARcPSD|2273296 Frito Lay case study - Grade: A Operations Mgt (University of Massachusetts Boston) StuDocu is not sponsored or endorsed by any college or university Downloaded by Yolanda Silvera (ylsilvera@hotmail.com) lOMoARcPSD|2273296 Tu Nguyen Ben Keilman Case Study Analysis Frito Lay case study I. From your knowledge of production processes and from the case and the video, identify how each of the 10 decisions of OM is applied at Frito-Lay. 1. Design of good and services: Frito currently owns 7 successful products that contribute a huge amount of profits to them. However, Frito Lay always tries to make some innovation in their product designs. Their product development department would experiment with new products and send them to evaluation groups who are responsible for its marketing testing. After these processes, they can decide whether they should launch these products or not. 2. Managing quality: Frito Lay has a strict quality control process that involves a variety of process such as visual inspection, oil control, weight control, etc. Moreover, they also conduct quality checks throughout shipment, receipt, production, packaging, and delivery. 3. Process and capacity design: Frito-Lay’s process should be suitably design for their high volumes and small variety, so they have to invest heavily in some high-technology machine that can sustain the rapid process. Moreover, they also focus on green manufacturing and sustainability. They use solar energy to reduce their electricity expense and recycle carton boxes to protect the environment. 4. Location strategy: Because chips require a high freshness of input materials so Frito Lay has to set up their plant near raw material sources. Moreover, their plan should be near the retailers to make on-time delivery. 5. Layout strategy: Sanitary problems and rapid processing of product require Frito Lay to focus on the efficiency of their plant layout. The assembly lines should be easy for workers to do all production steps in the shortest time. 6. Human resources: There are cross-training for workers who have to operate a variety of production lines. The firm also gives them a specific path with a good promotion policy. Frito Lay also rewards employees with high condition of medical, retirement, and education policy. 7. Supply-chain management: Supply chain is a very important factor that brings success to food-related company. The quality of finished product is highly dependent on the freshness of raw material. Frito Lay should strictly choose good vendors that can supply high-quality raw materials on time, so they can enhance their production’s efficiency. 8. Inventory, material requirements planning, and JIT: The inventory turnover rate for Frito-Lay is 200 times per year. This allows for better flow of fresh goods. 9. Intermediate and short-term scheduling: Frito-Lay upholds tight scheduling to ensure the proper mix of fresh finished good on automated equipment, which requires reliable systems and effective maintenance. 10. Maintenance: Frito Lay has to focus on maintenance because downtime is very costly and leads to a delay in production. They trained their employees to recognize the flaws early Downloaded by Yolanda Silvera (ylsilvera@hotmail.com) lOMoARcPSD|2273296 and do a professional fix, so they can avoid some problems that force them to stop their production lines. II. How would you determine the productivity of the production process at Frito-Lay. The productivity of the production process can be determined by the output over input. For example, output could be something in pound and input could be labor hours. However, for multifactor productivity, we must take into consideration capital, labor, material, and energy. III. Comparison Product designs Managing quality Hard rock cafe Their product is food and their service is music. They keep changing their combination of food and music to enhance benefits that they bring to their customer. They used survey as their main quality measurement. These surveys involve many aspects that customers can completely evaluate Hard rock Café’s services. Process and capacity design Location Layout Human resources Supply chain management Inventory Scheduling Maintenance Located near tourist areas Having many different positions Staffs not only have good skills for their specific tasks but also show their passion in music and collaborate with others Frito Lay Innovation in product design. Strict evaluation before launching a new product. Many quality inspection points in each specific process such as peeling, packaging, and shipping. Mass production Green production Plants were located near raw material suppliers Reduce movement time of workers High rewards for workers Efficient trainings Focus on raw material suppliers Fluctuation in sales. It highly depends on seasonal factor Run and operate 24/7 High intense production Rapid production requires good maintenance Downloaded by Yolanda Silvera (ylsilvera@hotmail.com)