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

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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