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1 Specifications and Operations Standards. 2 Outline specifications and standards what to specify examples of specifications food, cartridge, drill press.

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Presentation on theme: "1 Specifications and Operations Standards. 2 Outline specifications and standards what to specify examples of specifications food, cartridge, drill press."— Presentation transcript:

1 1 Specifications and Operations Standards

2 2 Outline specifications and standards what to specify examples of specifications food, cartridge, drill press cases food of Golden Jaguar Group food of McDonald salad of President Chain Store Corporation

3 3 Objectives understand what specifications and standards are what to specify examples of specification in real life effect of operations standards and their implementation in real life

4 4 Relation Among Chapters Supplier Evaluation & Selection (Chapter 7) Supplier Management & Development (Chapter 9) Supplier Quality Management (Chapter 8)) Tips Health Family Happy Family … Specifications and Operations Standards Well before … Ones Values Mentality Behavior …

5 5 Specifications

6 6 and Operations Standards Specifications and Operations Standards specifications (of items, requirements, etc) and standards (on operations, requirements, etc.) e.g., the specification for the uniform of a mechanic, which is affected by the operations that he carries out providing guidelines to evaluate, select, manage, and develop suppliers exercise prepare the requisition form for 2,000 note pads a typical requisition formrequisition form

7 7 To Specify Quality/Type sample brand, or equal (e.g., HP XXX color printer, or equivalent) commercial standards specifications (e.g., the implementation of an Environmental Management System abiding by ISO 14001) physical, chemical characteristics (e.g., the coating is of V-O rating in UL- 94 flammability test) material (e.g., the frame is no less than 65% titanium by weight) manufacturing process (e.g., the ejector pins of an injection mould should follow DIN 1530) performance (e.g., double-side printing, 30 pages per minute, …) drawings market grades necessary to be familiar with relevant standards and specifications

8 8 Specifications examples of specifications bologna, salami, frankfurter, oven fried chicken leg, etc. Illinois State Board of Education: Summer Service Food Program Illinois State Board of EducationSummer Service Food Program 80GB Data Cartridge IBP Product Purchase SpecificationPurchase Specification drill press Equipment Specification Writing Guide Equipment SpecificationWriting Guide Statement of Work, SOW details of service specification of service requirements and expectation in terms of performance, functionality, method, etc.

9 9 Golden Jaguar Group Golden Jaguar Group ( ( ) ) restaurants in Beijing, Shanghai, Shanyang, Tinjin, etc. restaurants buffet: more than 400 cuisines; NT$1200 size 2008: NT$ 3 Billion for buffet; total NT$ 6 Billion Salmon, 3,000 metric ton, ¼ of Taiwans annual demand centralized purchasing computerized system for 8,000 items standardized purchasing process for every item e.g., watermelon: as detail as the sweetness and size

10 10 McDonald

11 11 McDonald franchising benefits of franchisees … benefits of franchisors … Dick McDonald, Mac McDonald, Ray Kroc Dick McDonald, Mac McDonald,Ray Kroc McDonald: the first mass production assembly line in food industry general environment: rise of suburb; demand in speed for everything motto (Ray Kroc): Quality, Service, Cleanliness, and Value standard operations procedures and requirements, for franchisees and suppliers

12 12 Revolutionary Ideas of McDonald (Ray Kroc) on franchising building the success of the company on the success of franchisees not gaining benefits as a wholesaler and a supplier of franchisees sharing benefits from economies of scale with franchisees on control centralized control on menu, operations procedures and standards, and supplier requirements for all franchisees and suppliers, followed up by inspection penalizing undisciplined franchisees

13 13 Operations Standards of McDonald 15 dos and don'ts from McDonald brothers 1955: 15 pages, then 38 pages 1958: 75 pages by mid 1980s: a big manual, including best procedures, gestures, recipes, cooking time, performance metrics to compare restaurants, cleaning, … 1957: 7 pages inspection report …

14 14 Examples of Standards hamburgers fat 17% to 21.5%, without any additive 83% beef shoulder chops ( ) and 17% high level beef brisket point end ( ) inspection: cook a piece, checking its color, size, smell, water content, shape, and even test in a laboratory

15 15 Standards and the Best Procedure French fries: How to ensure that every McDonald provides the same French fries? set density (20%) of potato benchmarking farms to get the best quality potato induced other farmers to follow the best practice to grow potato, to store, and to automate frying fries fryingfries first store for three weeks to let sugar turn to carbohydrate set a laboratory to study the best way to fry turn the way automatic semi-processed frozen fries

16 16 Effects of Standards fundamental changes in food industry new ways to plant, grow, raise, and process food raising cattle and dairy products design new kitchen utensils change ways to pack and transport food and raw material

17 17 President Chain Store Corporation

18 18 Background 2010 May, sales of fresh and ready food NT$ 1.5 Billion third largest in the food industry requirements: constant supply of fresh fruits and vegetables half of the supply from Shin Wu Cooperation Farm in Yulin ( )Shin Wu Cooperation Farm 30+ contract farmers

19 19 Background chain stores competing on new products change in customer base and consumer behavior fruit and salad

20 20 Traditional Process farmers supply vegetables and fruits to food processing factories of PCSC sell whatever they grow

21 21 New Requirements by New Products fresh salad for 7-Elevan fruits and vegetables for raw consumption clean, without pesticide, nor fertilizer good taste and texture PCSC: direct contact with suppliers (i.e., farms)

22 22 Example of Requirements on Products zero fertilizer left appearance look (e.g., piling off ugly leaves) size (e.g., 5 to 7 mm for each piece of cucumbers) shape (e.g., perfect oval for guava) color (e.g., a specified color for carrot) texture (smooth surface of cucumber) washing time packaging fresh air flow easy to stack damage reduction

23 23 Changes on Farmers Changes on Farmers and Farming Methods Farming Methods Changes on Farmers Farming Methods change the operation processes and attitude of farmers currently advanced-level farmers on field management timing and amount of fertilizers market analysis nutrition analysis plantation co-ordination inventory control production-processing new product development output: 10 times as much 10 years ago

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