Lay case study: summary, Summaries of Industrial economy

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Tu Nguyen Ben Keilman,

Lay case study

Tu Nguyen Ben Keilman Frito Lay case study Case Study Analysis 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.