Operations management Assignment

ANALYIS OF AMOUDS OPERATIONS

Done By: Soumaya HAMDOUNI BM2 University Of Sunderland

Instructor: Dr. Tarik Brahimi

Contents
1. Introduction...3 2. Background of Amoud and its products and service

4
3. Amouds transformation process

6
4. Amouds 4 Vs.13 5. The five performance objectives of Amoud

Company...14
6. Polar Diagram.15 7. The process mapping...

16
8. The layout and flow....17 9. The

supply

chain

management..

..18
10. Order-winning factors , qualifying factors, or less important

factors20
11. Discussion of the volume-variety

effect..20

12. Bill of Materials21 13. Discussion of the modularization, commonality or

standardization of Amouds products . ....22

14. Methods to improve products design...

23
15. Conclusion24

References...25

Introduction:

Nowadays, operations management is very important in any business, as it helps to reduce costs, increase the performance and efficiency and enhance flexibility. Hill (2005) describes operations management as that field of study that focuses on the effective planning, scheduling, use and control of a manufacturing or service organization through the study of concepts that affect the organization. So operations management is primarily concerned with ensuring the efficiency and effectiveness of operations.

This report is a study of the different aspects of operations management involved at Amoud bakery.

Background of Amoud Company and its products and services:

Amoud that means seed in Berber, is a way of traditions and innovations, rigorous and quality at every aspect. Its history has began at 20 December 1982 with the opening of its First store at Bd Emile Zola, belvedere in Casablanca, with a starting capital of 300000DH and an operating staff of 12 person.

The founders of Amoud named Mr AKHDIME Mhamed and ESSALEHI Mohamed had as a vision to offer more light pastry, more refining and innovative. Amoud.ma at that time they were far to imagine the revolution that Amoud would bring to the Moroccan bakery sector Hassan Boulaid, the administrative and financial director at Amoud. From its start, Amouds team expressed its passion and love of traditions through the sense of perfection and innovation of its products that made up the success of Amoud, and as a result, the belvedere store was enlarged in 1995 and began to receive more curious customers to taste its creative delights that are developing with the rhythm of the seasons. In 1999 Amoud was transformed into a public limited liability in order to better structure the enterprise by the increase of its capital to 2 million DH. Further to this development, Amoud opened its second store at Anfa, and two other stores in Mohemmadia in 2007 and In California in 2008. Also Amoud has developed its production through the creation of the international Moroccan Dessert Maroc Dessert International in 2006in Ain Sbaa covering an area of 1900m, that has as a mission to centralize the production and insure the supply chain of Amouds stores, it has also a restaurant to serve its customers and potential customers, adding that it represents a place where they organize seminars and meetings. Amoud continued to develop and expand other cities in Morocco mainly Marrakech in 2011 using the slogan I love Marrakech. CHR magazine, MDI is also exporting to other countries as well, such as France and Belgic. Actually, Amoud is celebrating its 30 years of existence which is a long way of innovation, creation and of experience. The secret of Amouds success is its know how to express its talent and love of the Moroccan tradition through the selection of the better ingredients to create a variety of products and satisfy its demanding customers. Amoud is specialized in bakery, confectionery, chocolate maker, glacier and carterer. Its products are composed of different lines mainly; viennoisery, 48 types of bread, cakes (petit-four), pastries,

ice cream, chocolate, candies, sandwishes, various Moroccan cookies, tarts, pies and wedding cakes.

The transformation process:

The production process at Amoud is composed of three major steps:

The process of purchasing of the raw ingredients commonly called inputs. The production process which is essential in the transformation of the raw materials to create outputs. The marketing and commercialization phase.

In Order to better understand the operations at Amoud, we use the transformation process model that describes the operations in terms of their inputs resources transforming processes and outputs of goods and services. Slack Clambers and Johnson (2007).
Input resources at Amoud can be divided into two types of

resources:

Transforming resources: which represent all the facilities

and equipments as; mixers, ovens and other baking equipments. And also the staff composed of technicians, machine operators, managers, packers, sellers, and other staff, adding the energy and all the facilities that can be used in the production.
The transformed resources: include the raw ingredients

used to prepare the different products, which include all kind of flours (complete, semolina, barley, special flour, viennoiseries flour), butter, yeast, eggs, salt, sugar, chocolate (powder, black, milk chocolate), hazel nut, milk, olives, oil, mished fruits and fresh fruits, preserves, water, meat, fish, chicken and other ingredients. Other transformed resources include the packaging and articles of decoration as laces, limp with various dimensions,

plastic bags, paper bags, plates, polystyrene plate, candles, plastic flowers, dolls and weddings decoration.
In the transformation process at Amoud, the raw ingredients

are mixed in different ways, shaped into different designs, baked or freezed then decorated and transported to the shop to be sold.

The outputs of the transformation process are different types

of breads, vioennoiseries, pastries, ice creamsetc In Order to apply the transformation process model at Amouds operations, processes are divided according to the laboratories of the products produced.

The transformation process at the bakery and viennoisery

laboratory:

At this level, all the

operations of bread and viennoisery production are carried out. They start with the scaling of the various ingredients; flour, corn, sugar, water, yeast, the eggs then the mixture of the whole in an electronic mixer to get dough that will be shaped and cut into different forms.

The outputs of this laboratory are composed of two groups:

Breads: white bread, semolina, complete bread, special

breads.
Viennoiseries: chocolat crescent, almonds crescent, lemon

creascent The outputs of this laboratory are products without cooking, and are launched after this production to the cooking workshop to get baked.

Dry laboratory and petit-four transformation process:

At this laboratory, Amoud

produces all kind of petit-four (beldi and prestige) as well as other dry products, by the preparation of the ingredients, mixing them, kneading, cutting and shaping the petit-four then the products are delivered directly to the cooking workshop to get cooked and after to the decoration workshop to get decorated and packaged. The principle products of this laboratory are:

Petit four beldi:

Gazelle horns, Ghriba types (nut, almonds, sesame), chabbakia.

Petit four prestige: Maccaroon, Romias Dry products : cakes, Madeleines

The transformation

process at the cooks laboratory: This activity comes in the second place, as a secondary activity after the bakery and pastry making. At this level, Amoud uses ingredients such as meat, fish, chicken, oil, olives they ensure the preparation of the whole products like:
Sandwiches with bread and Batbout: chicken, meat,

turkey
Pastillas: chicken, seafood.

 Suchis Salads

buns

The products of this laboratory are without cooking and are delivered to the cooking workshop, and part of this laboratory outputs are stored in a cold room at the same laboratory, mainly Pastillas, in order to feed the cooking workshop according to customers orders coming from the points of sales.

The transformation process at the pastry making laboratory:

This represents the most important point of production of all kinds Amouds products, as it represents approximately 40% of Amouds production. At this level comes the treatment and mixture of the ingredients as chocolate, Hazel nut, cream, meringueetc. The products obtained from these components are presented without decorations and consist of the desserts or cakes of various sizes and tastes. The final products of this laboratory are: Black forest gateau, cacao bean gateau, Baltazar gateau, Nut gateau, cream slices, etc... They are obtained without decoration and are stored in the same laboratory in a cold room at a low temperature (less than 20 degree). It is the decoration department that proceeds to all the operations of decoration according to the orders coming from the points of sales.

 The transformation process at the ices laboratory:

This laboratory uses certain

ingredients such as chocolate, creams, eggs, and mashed fruits these ingredients are mixed, and facilitated by other functions such as the treatment by turbine, pasteurization, and the garnishing and freezing. The products obtained are:
Ices: Sicilian, chocolate, raspberry, brasilia Sorbets: tropical, florida, chocolate

These products are without decoration and are stored in a cold room in the same laboratory, and then decorated at the decoration laboratory according to the Orders coming from the point of sales.

The transformation process at the chocolate laboratory:

This laboratory uses ingredients as chocolate powder, cocoa, milk, milk powder and vanilla. The principle functions carried out are the liquefaction of the chocolate, the molding, freezing, and releasing from the moulds.

The outputs of this laboratory

are two types of products:

Chocolate candies: stored and ready to be sold. Small articles chocolates in various forms: triangle, circle,

square, flowers these articles are delivered directly to the decoration laboratory to be used for the decoration of the desserts, gateaux and ices.

The transformation process at the furnace and cooking

workshop: This workshop has as a primary mission to cook all the products coming from stores of other laboratories of production, based orders of the commercial service. Each laboratory at Amoud is managed by a person, the whole laboratories managers are headed by a coordinator called the general chief of production or director of production, which is responsible of following the instructions of the sales department that organizes a planning of food for the sales shops and prepares orders according to the needs and request of customers.
The transformation process at the conditioning and decoration

worshop: This workshop ensures the packaging of the various products. It is responsible of conceiving a packaging adapted to each category as such as; forms, characteristics, colors, design, ties with ribbons, chocolate decorations, and other small decorations articles as well as polystyrene for the decoration of the weddings cakes.

This workshop works in cooperation with the sales department to satisfy the personal needs of customers.

The four Vs of Amouds operations:

The operations at Amoud differ from each other because of the variety of the products produced, the demand of the customers, and other factors as well. Usually those factors are described as the 4 Vs Model, which is used to distinguish between types of operations. In this case, the 4 Vs model will be applied in the bakery laboratory of Amoud, which is primarily concerned with the production of breads and viennoiseries.
The volume at this laboratory is high, as the products are well

defined which allows the systemization of the activities and machinery needed to produce them, and the activities become repetitive. In this laboratory, Amoud has day and early morning teams, as they start from 5a.m to make the products available at time. Annually, Amoud produces 400000 traditional crescents, 700000 of filled crescent as well as different breads from their different stores. Food magazine (2009).
The variety at this laboratory is medium to low, because even

though there are different types of products, but there are well defined and process is continuous, unless the launch of new products which make the process suffer from a little modification.
Variation in demand is medium to low as in this laboratory in

general, demand is expected, but it can change in special events such as Ramadan when people tend to buy products only at Ftour time.
Visibility is low, because all the production processes are

performed without visibility of customers.

The five performance objectives:

Operations management has five performance objectives that are; Quality, Speed, Dependability, Flexibility and Cost.
Quality as being defined by Slack (2007) is a consistent

conformance to customers expectations. In the food industry, customers link quality to clean food and pastries that satisfy their different tastes and that please their quests with prestige food. In other words, foods ( breads, pastries, viennoiseries, cakes) should be well prepared with correct flavors, designed properly with good packaging as well, and the service should be pleasant and gourgeous. At Amoud, quality means high standard of hygiene, variety and innovation all the time. In their production, they think about every single detail. More than 200 employees are activated in its different laboratories with different activities in ovens, mixers, refrigerators, freezers, with pasteurization, dough division Everyone has a specific mission; they also verify the temperature of the laboratory and check the calibration of the thermometers in order to respect the measures of quality. Also, to ensure the quality, Amoud usually do some quality tests for the raw ingredients and control the end products. Moreover, Amoud in association with LOARC and the LARV that are public laboratories, do bacteriological analysis to ensure hygiene safety and customers protection. Food magazine 2009.
Speed: in Amoud speed is providing customers with their

requests with affordable foods and keeping the queuing at its stores at the minimum.
Dependability: at Amoud being dependable means that

customers will find the bread and other orders at time. For example, finding bread available in the morning, or in occasions, when recommending foe a birthday or a wedding cake, they have to be delivered at time. Amoud try to keep customers satisfied, and for that reason they can order easily from its website or by calling at its different point of sales that are responsible of communicating orders to the production team that make products available at time.

 Flexibility: At Amoud, operations generally are flexible in terms

of :
Volume flexibility; as Amoud can change the quantities

produced over time, and also they can produce in large quantities at its different stores as well as the amount exported to other countries such as France.
Mix flexibility through its ability to produce a range of

products at once.
Product and service flexibility: its ability to produce new

products through its continuous innovation.

Cost: costs at Amoud include the cost of the raw ingredients,

the staff cost (salaries), the maintenance of the equipments, facilities cost, insurance cost, transportation, cleaning and washing, the cost of the safety and hygiene analysis, and other costs.

Polar diagram for the 5 performance objectives:

Amoud is considered as the leader in the pastry and bakery sector, but it has several competitors. The following polar diagram shows a comparison between Amouds and la calidad five performance objectives.

Quality is important for both companies, however the quality of La Calidad is still low compared Amoud, because they dont require a developed technology to control the hygiene which explain the different in cost. Companies are both flexible, but in terms of of the products flexibility, Amoud is the leader as it produces and innovates products at a shorter period of time. The speed at the companies is high but La Calidad is higher because they dont proceed to a lot of activities and control, however Amoud is more dependable because they benefit from the delivery system.

The process mapping:

The operations at Amoud start from forecasting sales and receiving customers orders, to analyze the amount of the raw ingredients needed and order them. After receiving the raw materials, they get stored and prepared for each type of product, each laboratory has certain activities and operations to follow, this example will analyze the process mapping of cakes production.

The layout and flow:

Amoud bakery is a cell layout composed of

different products layouts, as there are different laboratories that divide transforming resources into small clusters to produce different products all according to specific requirements. So, within Amoud the flow of resources and products is well organized and planned as the activities go to form a connected line for continuous production.

As discussed before, some laboratories outflows are considered as others inflows, taking the example of bread and viennoisery laboratory that send their final uncooked products to the cooking workshop to be cooked, packaged and finished, so each laboratory has a specific mission in order to produce finished products with good decoration and packaging.

Obj

The supply chain management:

The supply chain management or called also the management of the chain of supply is an important concept for every business as it manages the whole process of making a product or a service with the ultimate aim of adding value to the customers.

Over the past years, Amoud has shown its ability to control its operations in order to provide high quality products and service. Amoud uses every year 7 types of cereals that form 300 tons of flour, 72 tons of butter, 35 tons of almonds, 16 tons of chocolate, 610400 eggs and other components as well. The supply chain start from the warehousing management by staging the raw materials, the production starts by the recipes preparation, the scaling of the raw ingredients, mixing, dough resting and preparation, then baking or freezing, decorating and packaging, and after transporting the final products to stores. Thus, it is an integrated process within Amoud with laboratories supplying each others. This process is figured as the following:

The company outsources activities such as cleaning, security, as well as the maintenance service of the machines. And it intermediates the quality check laboratories that check the quality of raw materials and final products.

Order wining, Order qualifying and less important factors:

Every company has a certain strategy to follow, however not all of them succeed, Amoud has a differentiation strategy that allows it to be different than its competitors and attract more customers, this is achieved through the continuous innovation as it creates new differentiated products at every occasion, for example, during the mothers day occasion, Amoud has produced a gateau in the form of a shoe to please mothers. Moreover, in the New Year event, Amoud innovate new types of log cakes and new chocolate gifts for children, in the form of animals.

This can be seen as Amouds order winning factors, in addition to that, the high hygiene standard that makes Amoud special over its competitors. An order winner for Amoud also, is that they have many stores not only in Casablanca but in other cities as well, in addition to its exporting activities to other European countries. Order qualifying factors include its ability to produce different breads and cakes, and its different activities as a pastry maker and caterer. The less important factors include its outsourced activities such as cleaning and maintenance, taxes and other similar factors.

The volume-variety effect on the process design, and type of the process design:
As discussed above, Amoud have high degree of volume and medium to low variety, because it produces in large quantities, however they have a range of diversified products. Amoud have a cell layout, thus the process type is a mass process. The graph bellow shows the volume variety relationship with the layout and process design types.

Bill of material:

The core products at Amoud are the pastries that represent 40% of Amouds production. This example will discuss the bill of material of the chocolate gateau.

Modularization, commonality, and standardization of Amouds products:

Modularization: is creating several products with different

features through the mix of all imputs resources. In Amoud all input resources are mixed up to get different products with different tastes through slight changes at the end of the preparation process or at the decoration process.
Commonality: means using common ingredients in different

products. To provide an example of this process, a comparison of a bread and crescent is made; as both products use flour, milk, water, salt, yeast as well as some dry fruits as sesame, but they are different in taste and preparation. In addition to that all products are using the same plant to get produced so they have all something in common.
Standardization: is making the entire products standard. This

process is not adopted by Amoud, because all the products are different from each others.

Methods to evaluate and improve design:

Over the past years, Amoud have shown an outstanding sense of innovation, a capability to organize important events and export to foreign countries. As a result of that, Amoud had many rewards such as the 1st prize of evening cakes, 1st prize petit fours, and in 2010, Amoud won the Moroccan award prize of innovation.

In order its position in the market,

Amoud uses an ad hoc material employed by more than 200 employees that are supervised by the greatest chiefs in Morocco and other foreign chiefs as well, all activated to keep the level of innovation up and improve more products.

Amoud benefits from its learning cycle

to develop more products with less cost. All the process starts by new innovative ideas to screened, assessed and tested first before getting introduced to customers. After that the product gets evaluated, improved and launched in Amouds stores and advertised in its website and its page on Facebook. Amoud develops a range of products to please all its customers from children to grandparents.

Conclusion:

Business operations remain important to control all the activities and ensure that the business is doing well in order to have products and service that satisfy customers. However, No one is perfect, and every business face issues and problems that have to be solved quickly and properly.

Amoud had and still face issues with its production, mainly with cost, because in order to get good quality products, it goes through multiple activities, which have a direct effect on its costs and prices. In addition to that, Amoud have to control baking operations as sometimes, the quality might not be the same due to baking operations and the quality of the raw ingredients that dont remain the same always. Another issue at Amoud, is that they have to control the exact amount of volume production to not have UN served customers or wastage as happens sometimes with bread and some viennoisery products. Moreover, as a result of more investments and the increases of sales volume over time, Amoud have to ensure that all its customers are served, thats why Amoud employ more employees, but unfortunately Amoud waste a lot of money and energy to train its new employees. To solve this issue, we suggest that Amoud make contracts with hotel schools and cooking centers as (OFPPT), to hire graduated qualified students and assist them in schools with some seminars to get the knowhow and the developed techniques, thing that can be appreciated from the schools and the government, and wont be that costly for Amoud, as they are going to benefit also from the good reputation. Another issue at Amoud is that they dont have created a marketing department just recently, and their marketing activities dont follow the innovation trend at Amoud, which make the company lose some opportunities, because customers dont know about the new products unless if they visit the stores or come across them in Amouds website. So I think that even if Amoud have a good reputation among Moroccan customers, great sense of innovation and more investments with ultimate aim to meet other customers and increase the sales volume, but they have to invest more in marketing to sustain their leading position in the market and attract more customers.

References:

Slack chambers and Johnson, operations management 5th edition, Nigel slack, and Robert Johnson (2007)

Slack chambers and Johnson, operations management 4th edition, Nigel slack, and Robert Johnson (2005)

WWW.Amoud .ma checked at March and April 2012

Operations management courses from Mr, Tariq BRAHIMI (2011-2012)

Food magazine (2009)

CHR magazine (2011)

Mrs. Amina ESSALHI, the marketing manager at Amoud

Maroc Dessert International, Ain Sba, Casablanca

Amoud Casablanca