Situation: Dooly Doughnuts is a bakery based in Atlanta, Georgia that manufactures and sells doughnuts to both end consumers and grocery stores. Currently, Dooly has ample demand, but it does not have an optimized process flow to efficiently meet its demand. As an added consideration, we decided to see if Dooly has the ability to add customized doughnuts to their menu. These customized doughnuts would be a higher priced item that could add a revenue stream with a greater gross profit margin.
Question: Based on the situation outlined, two questions were formed: what is the optimal production setup to efficiently meet demand and what is an optimal production setup that would allow Dooly to offer customized doughnuts? Furthermore, which optimal setup should Dooly move forward with based on the net income predictions?
Overview of Concepts and Tools:
- Excel Software: @Risk (Monte Carlo Simulation, Distribution Fitting, Tornado Graphs and Sensitivity Analysis)
- Excel Commands: Discrete Distribution, Normal Distribution, Triangular Distribution, What-If Analysis
- Supply Chain Concepts: Process Analysis (Task Time, Cycle Time, Capacity, Capacity Utilization), Bottleneck Pacing, Demand Pacing, Operational Excellence, Customer Intimacy, Lean Management
- Financial Instruments: Income Statement, Cost-Benefit Breakdown
Conclusion:
An important insight gained from this project stems from the interconnections of different tools rather than actual case specific conclusions. This case is an example of how by using just excel, a company can optimize their operations. A small business with limited resources can create simple yet accurate demand forecasts and determine better allocation levels for resources resulting in a robust business strategy.
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Appendix
Special credits to Rayan Goyal, Aman Parikh and Oorja Shah