Notes from king soopers bakery Made at one central bakery in Denver Breads pastry cakes Used 3 process process choice to meet demands Line Batch Start as raw materials with common ingredients Job Shop o Distributed to each line o Mixed together based on chart and done by hand and machines Bread is the highest volume line Dough from mixer to cutter to baker Bread is only thing on line specialized line 7000 loaves per hour cooled then cut bagged and sealed o Line process High volume Low flexibility and low customization only bread Highly automation Capacity changes are difficult and expensive o Batch process pastry o Job Shop Process Cake Manual handling specialized and variable skill Smaller volume but flexible and customizability Has many specialized tools and take labor to change fixtures and tools Moderate volume per product Under 1000 units per barch Would be easy to expand lines inexpensive High custom Special designs all done by hand No automation Low equipment count Constraint to add People have the most skills 6mos vs 1month of training Easy to add capacity increase number of people Low volume 1200 cakes 250 cakes per day Line made to stock o Volume high flex low auto hi capacity hard o Ex Bread Appliances or cars Batch assemble to order o Volume moderate flex moderate auto moderate capacity moderate o Ex Pastry Mcdonalds burgers Job Ship mass customization and ATO o Volume low flex high auto low capacity easy o Ex Cakes print shop custom molds Volume Diversity Bread hi low Pastry moderate moderate Cakes low high Capital Intensity Capacity Change low hard expensive Flexibility Set up costs Labor Costs Employee skills Ability to stop flow Order winners Process choice Break Even analysis low high low low hard line different processes moderate moderate moderate moderate moderate moderate moderate batch high easy but constrained by people skills high low high high easy job ship Break even analysis a mathematical technique that allows a comparison of total costs for This technique takes the fixed costs of buying or developing a process or technology adds the variable costs for producing each unit and finds the break even point at which the cost of two or more processes is equal Tells you o If a forecasted sales volume is sufficient to break even no profit or no loss o How low variable cost per unit must be to break even given current prices and sales forecast o How low the fixed cost need to be to break even o How price levels affect the break even volume o The viability of a capacity change o Analysis of process choice based on volume costs
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