e. What would you advise Elizabeth with reference to the proposal from the team of business students?

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e. What would you advise Elizabeth with reference to the proposal from the team of business students?

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Production Process at Mami Girl’s Bakery
Mami Girl’s Bakery was started by Elizabeth Mothepane Moloi in 1994. Nicknamed ‘Mami Girl’, Elizabeth opened the home-style bakery in Cresta, Randburg, as an alternative to those commercially produced baked goods. The mission of Mami Girl’s Bakery was to produce a variety of baked goods with old-fashioned style and taste. The baked goods included a variety of pies and cakes that were sold to the general public and local restaurants.
The operation was initially started as a Mami’s by Elizabeth and some of her friends. Many of the recipes they used had been passed down in their families for generations. The small production and sales facility was housed in a mixed commercial and residential area on the first floor of ‘Mami’s’ home. Elizabeth (Mami Girl) and four of her friends worked in the facility from 6 a.m. to 2 p.m. making and selling the pies. The operation was arranged as a job shop with workstations set up to perform a variety of tasks as needed. Most of the customers placed advance orders, and Mami Girl’s Bakery took pride in accepting special requests. The bakery’s specialty was the Apple Crumble pie – a rich apple-filled confection in a cookie crust.
To meet the capacity needs or not?
 
At the beginning, sales were slow and the business experienced periods of losses. However, after a few years Mami Girl’s Bakery began to attract a loyal customer base. Sales continued to grow steadily. In 2004, a first-floor storage area was lengthened to accommodate the growing operations. However, Mami’s Bakery quickly outgrew its current capacity. In May of 2008, Elizabeth decided to purchase the opposite building and move the entire operation into the much larger facility. The new facility had considerably more capacity than needed, but the expectation was that business would continue to grow. Unfortunately, by the end of 2009 Elizabeth found that her sales expectations had not been met, and she was paying for a facility with unused space.
 
Seeking operations management advice
Elizabeth knew that her operations methods, though traditional, were sound. A few years ago, she had called upon a team of operations management students from a local university for guidance as part of their course assignment. They had offered some suggestions and were most impressed with the efficient manner with which she ran her operation. Recalling this experience, Elizabeth decided to contact the same university for another team of operations management students to help her with her dilemma.
 
After in-depth assessment, the team of operations management students came up with their plan: Mami Girl’s Bakery should primarily focus on production of the Apple Crumble pie in large volumes, with major sales to go to a local supermarket. The team of operations management students discussed this alternative with a local chain of supermarkets that was pleased with the prospect. Under the agreement, Mami Girl’s Bakery would focus its production on the Apple Crumble pie, which would be delivered in set quantities to one store location twice a week. The volume of pies required would use up all of the current excess capacity and take away most of the capacity from production of other pies.
The confusion in Elizabeth was clearly evident as she wondered whether the alternative being offered to her would solve her capacity problems or not. However, it seemed that the business would be completely different, though she did not understand how or why. For the first time in managing her business she did not know what to do.
 
 
a. Explain the challenge Elizabeth faced in meeting her capacity needs. What should she have considered before moving into the larger facility?
b. What is wrong with the proposal made by the team of business students? Why?
c. Describe the process technology currently in place at Mami Girl’s Bakery? What type of operation is needed to meet the proposal made by the team of business students? Explain the differences between these two operations processes in terms of variety, volume, and the level of automation (Refer to Figure 8.4 in the textbook).
d. Elizabeth senses that the business would be different if she accepts the proposal but does not know how and why. Explain how it would be different.
e. What would you advise Elizabeth with reference to the proposal from the team of business students?

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