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Specifications and Operations Standards
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OutlineOutline
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
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ObjectivesObjectives
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
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Relation Among ChaptersRelation Among ChaptersSupplier Evaluation
& Selection (Chapter 7)
Supplier Management & Development
(Chapter 9)
Supplier Quality Management
(Chapter 8))
TipsHealth Family Happy Family
…
Specifications and Operations Standards
Well before …
One’sValues
MentalityBehavior
…
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Specifications
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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 form
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To Specify Quality/TypeTo 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
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SpecificationsSpecifications
examples of specifications bologna, salami, frankfurter, oven fried chicken leg, etc.
Illinois State Board of Education: Summer Service Food Program
80GB Data Cartridge IBP Product Purchase Specification
drill press Equipment Specification Writing Guide
Statement of Work, SOW details of service specification of service requirements and expectation in terms of performance,
functionality, method, etc.
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Golden Jaguar Group (金錢豹(中國)酒店餐飲集團)
restaurants in Beijing, Shanghai, Shanyang, Tinjin, etc. 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 Taiwan’s 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
台中金錢豹酒店
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McDonaldMcDonald
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McDonald
franchising benefits of franchisees … benefits of franchisors …
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
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Revolutionary Ideas Revolutionary Ideas of McDonald of McDonald (Ray Kroc) (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
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Operations Standards Operations Standards of McDonaldof McDonald
15 do’s and don'ts from McDonald brothers
1955: 15 pages, then 38 pages
1958: 75 pages
by mid 1980’s: a big manual, including best procedures, gestures, recipes, cooking time, performance metrics to compare restaurants, cleaning, …
1957: 7 pages inspection report …
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Examples of StandardsExamples of Standards
hamburgers fat 17% to 21.5%, without any additive
83% beef shoulder chops ( 肩肉 ) and 17% high level beef brisket point end ( 牛腹脅肉 )
inspection: cook a piece, checking its color, size, smell, water content, shape, and even test in a laboratory
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Standards and the Best ProcedureStandards 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
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
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Effects of StandardsEffects 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
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President Chain Store CorporaPresident Chain Store Corporation tion
統一超商股份有限公司
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BackgroundBackground
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 ( 雲林縣新湖合作農場 ) 30+ contract farmers
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BackgroundBackground
chain stores competing on new products change in customer base and consumer
behavior
fruit and salad
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Traditional Process Traditional Process
farmers supply vegetables and fruits to food processing
factories of PCSC
sell whatever they grow
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New Requirements by New ProductsNew 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)
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Example of Example of Requirements on ProductsRequirements 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
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Changes on Farmers Changes on Farmers and Farming Methodsand 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