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BJMP2033 Production and Operation Management
1.0 Introduction
1.1 Company Background
Myth Cupcake is a cupcakery, located in a bustling area in Peneng, opened the
shop in year 2000. We wanted to bring wonderful delicacy of cupcakes and to remind
us of some of the simple pleasures in life. Myth Cupcake offers four flavors daily,
including ten varieties that are available each day, two until seven seasonal flavors
per month, and three flavors on rotation throughout the week. Each cupcake is
made from scratch each morning from the freshest ingredients. Our cupcakes are
shaped by adversity, guided by value, and driven by passion. Each cupcake is
frosted by hand and given its own unique garnish on top, making each cupcake a
work of art to appreciate and delicious to eat.
Myth Cupcake found by Delise and Leigh. They are quite opposite in personality,
kind of like chocolate and vanilla. Delise, has an extensive background in Nutrition,
holds an MBA, and besides is a fantastic baker. Leigh has a background in fashion,
interior design and business management. She adds her creative flair to give the
cupcakes and the shop its unique signature. Both ladies mix their talents to give
Myth Cupcake the best homemade designer cupcakes.
2.0 Company Profile
2.1 Objectives
Myth Cupcake consistent dedication to excellence has created a new industry for
cupcakes, and a new perception for cupcakery business.
The Myth Cupcake culture has provided a sense of belonging. While many say
the world is too huge and too wide for us to change alone, but we can play a small
part to make the world a better place to live in by being responsible for our own
actions and by making our every day choices for the good of the community and
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environment. But it’s formed by practicing a standard system in the company in our
day in day out works, every task that we do, every problem that we solved, and every
product that we produced, hoping one day doing the right thing will be an automatic
reaction.
2.2 Vision
Our vision is simple. We focus to put a smile on the world, one person at a time.
We vision are not idealists, we just believe the power of a smile. To that end, we
strive to make your day by ensuring the quality of our cupcakes and service are of
the highest standards and each experience you have with Myth Cupcake puts a
smile on your face. We are committed to consistently serving the highest quality
cupcakes and outstanding service in a vibrant store atmosphere.
2.3 Mission
Myth Cupcake aspires to giving back to our communities. We also play important
role to contribute to the environment by keep the environment clean and society by
helping the unfortunate category.
Other than that, we also aim to build partnerships that are based on integrity and
trust. We provide the best support to our business partners to ensure our and their
dreams and vision come true.
Moreover, we also commit to excellence. We share challenges and harvests with
our staffs through their high commitment and cooperation.
Further, we also belief in people and effort to change lives. We provide our staffs
an ideal income and healthy environment to help them to build a standard and quality
living.
We also are fostering a culture of joy and passion throughout our company. Our
company always organizes a workers trip to foster the relationship between peer.
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2.4 Business Partner Profile
3.0 Logo
3.1 Logo Description
At the top is our Myth Cupcake logo. In this logo, the black circle represents our
vision which is putting a smile on our customers’ face. We wanted to gather all
people joy through the cupcakes.
Other hand, the variety of cupcakes on the head means our complete products
range. We produce lots variety of cupcakes to our customers. So they have much
more choices
3.2 Motto
We summarized our motto in a word “C.H.A.R.M.I.N.G”, with each of the letters
defines the values and belief we upload to deliver.
i. Cleanliness
Food safety is our priority. This is because food is prepared by our
associates, so we stressed to have the highest personal and workplace
hygiene standard and practice.
ii. Hospitality
We go to extraordinary lengths to satisfy and delight our customers. We want
to meet or exceed their expectation on every cupcakes shopping trip. We
know that by doing so we turn customers into advocated for our business.
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iii. Acknowledgement
We recognize everything staffs make. We appreciate that everyone in Myth
Cupcake and their contribution. Our success is dependent upon the collective
energy and intelligence of all of staffs. We create a work environment where
motivated staffs to succeed to their highest potential and rewards results.
iv. Responsibility & Integrity
We responsible to our firm success and failure. We celebrate success and
see failure as opportunities for growth. We uphold good work ethics by
respecting ourselves for being punctual and diligent. Besides, we also make
contribution to the environment and society.
v. Maintenance
Maintenance ensuring our production process keeps working. We train all our
staffs, so they can be better skilled. Further, we also develop process which
can improve products quality and reduce production and administrative cost.
vi. Innovation
We are cupcakes revolutionaries. We dare to creatively different and produce
cupcakes that none has been before.
vii. Nature- Friendly
We respect our environment and recycle, reuse, and reduce our waste
wherever and whenever we can.
viii. Greatness
We produce the best that we can. We have great standard to sell the highest
quality products we possibly can. We define quality by evaluating the
ingredients, freshness, safety, taste, nutritive value, and appearance of all of
our products we carry.
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3.3 Slogan
Our slogan is celebrate the simple wonders of life.
We hope to bring a cupcake that brings smile on everyone after taste it.
Customers will always have a happy and joy mood after enjoy our cupcakes.
4.0 Organization Structure
4.1 Job Description
i. Chief Executive Officer (CEO)
Name: Cheryl Tan Say Er
Position Purpose:
CEO is head of operating. She is in charge and accountable for all the
operations in the firm. She is the representative and decision maker in the
firm.
Responsibilities:
Responsible for making strategic plans and setting business
objectives.
Evaluates the profitability of the various plans.
Skills and Specifications:
She has exceptional leadership as she motivates and led the firm.
She has mind and quick decision-making abilities.
She has good communication and networking skills and interacts with
other people.
Education and Qualification:
The CEO is at the highest position in the corporate ladder and so only highly
experienced people are given this job. She starts with an MBA degree and
gradually works her way up.
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ii. Administration and Finance Manager
Name: Goh Mei Yik
Position Purpose:
Administration and finance manager responsible for overall management of
Myth Cupcake include the financial risks. She implements all major decisions
and administrative tasks. In addition, she also responsible for planning
finances, keeping records, and making financial reports.
Responsibilities:
Managing administrative responsibilities and dividing them into
departments in order to maximize efficiency and productivity at a short
period of time.
Interpret financial information.
Monitoring cash flows and predict future financial trends.
Developing management mechanism to minimize the financial risks.
Managing the firm’s budgets.
Skills and Specifications:
Good communication skills
An analytical mind
Attention to detail
Education and Qualification:
Admin and finance manager has degree in Business Administrative, degree
in Financial Management and MBA.
iii. Human Resource (HR) Manager
Name: Lau Yih Shing
Position Purpose:
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HR manager entails providing practical, consistent, and proactive support,
direction and advice on HR procedure, policy, best practice, employment
rewards, benefits, and legislation. She performs human resources
management works relating to hiring, recruitment, training, compensation,
promotion, termination, career development, or retirement.
Responsibilities:
Organizing and conducting employee testing and recruitment
programs.
Receiving employee complaints and resolve them.
Skills and Specifications:
Ability to influence and persuade senior management level.
Pragmatic problem-solving skills.
Education and Qualification:
She has Bachelor’s degree in Human Resource Administration.
iv. Marketing and Business Development Manager
Name: Wong Pei Shan
Position Purpose:
Marketing manager is developing, establishing and maintaining marketing
strategies to achieve the objectives of an organization. She manages
effectively the advertising, promotional and marketing activities of the
company. She also evaluates market conditions, customer research,
competitors’ data and implements the changes in marketing plan as required.
Responsibilities:
Developing price strategies upon balancing customer satisfaction and
firm objectives.
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Formulating, directing and coordinating marketing policies and
activities to promote services and products.
Using sales strategic planning and forecasting to ensure profitability
and sale of lines, products, or services, supervising market trends and
analyzing business developments.
Skills and Specifications:
Extensive knowledge in every aspect of marketing strategies.
Strong understanding of market, customer and requirements.
Ability to develops, and implements strategic programs and tactics.
Education and Qualification:
She has Degree in marketing.
v. Production Manager
Name: Norlizawati Rusli
Position Purpose:
Production manager is an individual who plans, coordinates, organizes, and
controls production in cupcakery. Her main responsibilities are to ensure the
efficient production is of right quantity, quality, and cost.
Responsibilities:
Planning, scheduling and monitor production activities and
supervising the production process.
Making sure the good quality production of products on time.
Taking decision on operating unit’s layout, size and range of service
or product to deliver and design and arrangement of work processes.
Skills and Specifications:
Ability to grasp complex concepts easily.
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Excellent planning, negotiating, and organizing skills.
Ability to operate in a systematic and logical manner.
Education and Qualification:
She has Degree in food science and Degree in business management.
vi. Head of Chef
Name: Farah Inani Mior Muhd
Position Purpose:
As a head of chef, she in charge with the duty of overseeing all kitchen
operations in cupcakery and manage all kitchen staff.
Responsibilities:
Determines the frequency which the menu is to be change.
Supervision of all kitchen staff.
Plans the menus.
Skills and Specifications:
She has a creative and innovative mind.
Education and Qualification:
She has degree in food and beverage management.
4.2 Organization Chart
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5.0 Production System
5.1 Operation Strategy
Myth Cupcake applies lean production system in our production process. Lean
production is a variation on the theme of efficiency based on optimizing flow, it is a
present-day instance of the recurring theme in human history toward increasing
efficiency, decreasing waste, and using empirical methods to decide what matters,
rather than uncritically accepting pre-existing ideas.
Firstly, we design a simple manufacturing system. A fundamental principle of lean
manufacturing is demand-based flow manufacturing. Our inventory is only pulled
through each production center when it is needed to meet a customer’s order. The
benefits of this goal are decreased cycle time, less inventory, increased productivity,
and increased capital equipment utilization.
Secondly, we make sure that there is always room for improvement. The core of lean
is founded on the concept of continuous product and process improvement and the
elimination of non-value added activities. We improving the flow of material through
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new ideal system layouts at the customer's required rate would reduce waste in
material movement and inventory.
Lastly, we continuously improve our product and production process. A continuous
improvement mindset is essential to reach a company's goals. We make research
and development of our products and process continuously quarterly.
6.0 Production Process Planning
6.1 Supply Chain Management
Supply management in Myth Cupcake is integrated approach from customer buying
to raw material procurement. Below shown the supply chain management in Myth
Cupcake:
a. Procurement
Procurement is the acquisition of goods or commodities by a company,
organization, institution, or a person. The best way to procure is purchase of
goods from suppliers at the lowest possible cost by letting the suppliers
compete with each other to the expenses of the buyer.
Myth Cupcake source raw materials such as flour, milk, baking powder,
eggs, butter, vanilla and chocolate extract, sugar and other ingredients from
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Jo Baking Ingredients Sdn Bhd. This is because Jo Baking Ingredients Sdn
Bhd provides us the lowest price, the best quality materials, and delivery on
time services.
b. Production
After source the materials from Jo Baking Ingredients Sdn Bhd,
production process is starting. Production is an outline of firm that shows the
act of making products (goods and services).There are several steps in
produce cupcakes.
First and foremost, preheat the oven to temperature designated in recipe.
Line cupcake pans with paper liners. After that, combine flour, sugar, baking
powder, and salt in a large mixing bowl. Add shortening, milk, and desirable
flavor. Beat for 1 minute on medium speed. Scrape side of bowl with a
spatula. Next, add eggs to the mixture. Beat for 1 minute on medium speed.
Scrape bowl again. Beat on high speed for 1 minute 30 seconds until well
mixed. Then spoon cupcake batter into paper liners until 1/2 to 2/3 full. Leave
a little room at the top for expansion and be careful not to overfill.
Next step is bake for 20 to 25 minutes or until toothpick inserted in center
comes out clean. After that, prepare icing and place sprinkles in a small bowl.
Then, remove cupcakes from oven and allow them to cool 5 minutes in pans
then remove and place on wire racks to cool completely. Once cupcakes are
completely cooled, frost with favorite frosting recipe or decorate the cupcakes
with sprinkles.
Then, check the quality of the cupcakes. If there are no defects, packing
process was start. Next, place the packing cupcakes to boxes to distribute to
schools. Finally, transport the cupcakes to schools and outlet.
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c. Logistics
Logistics is the management of the flow of goods, information and other
resources in a repair cycle between the point of origin and the point of
consumption in order to meet the requirements of customers. The Myth
Cupcake logistics ensure that machine and workstation is being fed with the
right product in the right quantity and quality at the right time. We not concern
the transportation, but to streamline and control the flow through value-adding
processes and eliminate non value adding. Logistics help us to achieve
customer response and capital efficiency.
d. Distribution Channel
Distribution is the process of moving a product from its manufacturing
source to its customers. While channel of distribution comprises a set of
institutions which perform all of the activities utilized to move a product and its
title from production to consumption.
In Myth Cupcake, there are two distribute channel. First is direct selling.
We distributed the ready cupcakes to our outlet. We direct selling to our end
customers. There are not intermediaries between us and our customers.
Other than that, some seasonal occasion and festival, such as company
annual dinner, Chinese New Year, and so on, we also receive huge amount
of order from corporate.
Besides, we also retail to school. We sell the finish cupcakes to schools’
canteen. From school, the students and teachers buy from the seller.
6.2 Production Technology
Nowadays, to fulfill our huge demand from our outlet, we change to use the
automatic production line, with original design, compact structure and high
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automatic, is developed on the basis of Japanese technology. All our working
procedures that start from mixing until end of packing can be accomplished at the
short time. The machine increases our production efficiency and effectiveness by
speed up the process and accuracy measure each of cupcakes size and weight.
6.3 Financial Analysis And Planning
6.3.1 Modal
Myth Cupcake starts as a partnership business with a total capital
RM60000, which contribute by Delise and Leigh with RM30000 each
person.
Fixed asset
Item Cost (RM) Quantity Amount (RM)Breaking machine 5300 1 5300Seasoning machine 4900 1 4900Stir-frying machine 2500 1 2500Forming machine FH-500 1300 1 1300Cooling machine 2600 1 2600Refrigerator 1300 2 2600Van 4000 1 4000Oven 1000 4 4000Display rack bread 400 10 4000Total amount 31200
6.3.2 Fixed cost
Staff cost per month
Position Cost (RM) Number of Staff (Person)
Amount (RM)
Chief Executive Officer (CEO) 3000 1 3000Admin and Finance Manager 2000 1 2000Human Resource Manager 2000 1 2000Marketing and Business Development Manager
2000 1 2000
Production Manager 2000 1 2000Head of Chef 2000 1 2000Baker 1800 2 3600Sales Personnel 800 4 3200
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Total amount 14 19800
Operating cost per month
Category Amount (RM)Rent 1000Electricity 100Gas 100Insurance 100Miscellaneous 50Repair & Maintenance 50Depreciation 130Telephone 60Office supplies 70Cleaning supplies 50Total amount 1710
6.3.3 Variable cost for produce bread
Raw material for produce 12 Chocolate Cupcakes
No Ingredients Price (RM)1 Flour 1.002 Sugar 0.203 Baking powder 0.054 Salt 0.055 Baking soda 0.106 Shortening 0.207 Water 0.208 Eggs 0.909 Milk 0.50
10 Vanilla 0.2011 Melted
unsweetened baking chocolate
0.20
Total amount 3.60
Raw material for produce 12 Bubblegum Pink Cupcakes
No Ingredients Price (RM)1 Flour 1.002 Sugar 0.203 Baking powder 0.05
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4 Salt 0.105 Shortening 0.206 Eggs 0.907 Vanilla/ chocolate 0.408 Milk 0.50
Total amount 3.60
Raw material for produce 12 Vanilla Cupcakes
No Ingredients Price (RM)1 Flour 1.002 Sugar 0.403 Baking powder 0.104 Salt 0.105 Shortening 0.206 Eggs 1.207 Vanilla 0.208 Milk 0.40
Total amount 3.60
Raw material for produce 12 Red Velvet Cupcakes
No Ingredients Price (RM)1 Flour 1.002 Sugar 0.203 Baking powder 0.054 Salt 0.105 Shortening 0.206 Eggs 0.907 Butter 0.508 Vanilla 0.209 Cream cheese 0.40
Total amount 3.60
6.3.4 Break-even analysis
Myth Cupcake produces four flavor products that are Chocolate Cupcake,
Red Velvet Cupcake, Vanilla Cupcake, and Orange Cupcake. Price of
each product is the same price that is RM1.20. So,
Price = RM1.20 per cupcake
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Fixed cost = Staff cost + operating cost
= RM 19800 + RM1710
= RM 21510
Variable cost = RM3.60 / 12
= RM0.30 per cupcake
Break-even point = Fixed cost / (Price – Variable cost)
= 21510 / (1.20 – 0.30)
= 23900 cupcakes
RM
21510
0 23900 Cupcakes Break-even point
As the graphically shown above, the intersection of these two lines is the break-
even point that is 23900 cupcakes. If demand is less than the break-even point,
Myth Cupcake will operate at a loss. But if demand more than the break-even
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Total cost line
Total revenue line
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point, Myth Cupcake will be profitable. So, Myth Cupcake needs to sell more than
23900 cupcakes per month to make a profit.
6.4 Job Schedule, Product and Production Design And Operation
Daily Job Schedule
Time Description7.00am Staffs punch in card and prepare for working.7.30am Briefing by the supervisor.7.45am Check the inventory and make order if needed.8.00am - Start to distribute the cupcakes to school by lorry.
- Production process start.- Start selling the finish cupcakes in our outlets.
12.00 noon Rest hour.1.00pm Continue the production process.4.45pm Cleaning process.5.00pm Staffs punch out.
Product Design
As state in the beginning, Myth Cupcakes produce three flavors with ten varieties of
cupcakes daily. Our products also change seasonal with the different flavors, and
also on rotation throughout the week. Below are our daily cupcakes.
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Cupcakes menu
Everyday
Chocolate Vanilla Red Velvet Bubblegum PinkSpecials
Monday Tuesday Wednesday Thursday Friday Saturday SundayChocolate Coconut
Coconut Carrot Chocolate Banana
Chocolate Hazelnut
Coconut Carrot
Chocolate Mint
Lemon Blossom
Chocolate Coconut
Chocolate PB Swirl
Chocolate PB Chip
Key Lime Chocolate Coconut
Cinnamon Maple Chocolate Hazelnut
Coconut Coconut Mint Cookies &
Creme
Lava Fudge
Honey Banana
Mocha Cookies & Creme
Key Lime Lava Fudge PB Fudge PB Fudge
Toffee Crunch
Salted Caramel
Lemon Berry
Pumpkin Spice
Lemon Blossom
Salted Caramel
Strawberry
Seasonal Flavors
January February March April May JuneSalted
CaramelChocolate Strawberry
Cookies & Creme
Cherry Blossom
Chocolate PB Chip
Banana Chocolate Chip
Toasted Marshmallow
Strawberry Irish Cream White Chocolate Raspberry
Mother's Day Cupcakes
Orange Blossom
Valentine's Cupcakes
St. Patrick's Cupcakes
Easter Cupcakes
Memorial Day Cupcakes
Father's Day Cupcakes
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July August September October November DecemberBlueberry Coffeecake
Cherry Cheesecake
Caramel Apple
Maple Caramel Apple
Chocolate / White Chocolate Peppermint
Strawberry Ginger Peach
Cinnamon Pumpkin Spice
Pumpkin Spice
Gingerbread
4th of July Cupcakes
Labor Day Cupcakes
Halloween Cupcakes
Election Cupcakes
Chocolate Egg Nog
Thanksgiving Cupcakes
Rudolph Red VelvetSnowball (coconut)
Christmas Cupcakes
New Year's Eve Cupcakes
Production Design (Flow Chart)
Unload raw material buy from Jo Baking Ingredients Sdn Bhd
Move to inspection station
Weight, inspect, and sort the material
Move to storage
Wait until needed
Move to kitchen
Preheat the oven
Line the cupcake pans
Mix the ingredients
Fill the cupcakes batter into paper lines
Move to oven
Prepare icing and sprinkles
Remove from oven
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Cooling the cupcakes
Frosting cupcakes
Inspection
Packing
Storing
Shipping to outlet and schools
Production Operation
7.0 Quality Management
Commercial cupcakes making is held strict by government guidelines regarding food
production. Further, consumer preferences compel cupcake producers to maintain a high
quality standard of appearance, texture, and flavor. Therefore, quality checks are performed
at each step of the production process. We employ a variety of taste tests, chemical
analyses, and visual observation to ensure quality.
For Myth Cupcake quality is about meeting the needs and expectations of customers.
Therefore before launched a new cupcakes, we make research about customers’ needs and
expectations from the perspective such as cupcakes’ appearance, delivery, reliability, price
and so on. We also apply quality management in controlling activities with the aim of
ensuring that cupcakes are meets the specifications. There are two main parts to quality
management that we considered which are quality assurance and quality control.
Quality assurance is about how Myth Cupcake design the way cupcakes is produced to
minimize the chances that output are defect. We focus on the product development stage.
The reason is if the processes to produce cupcakes are tightly controlled, then quality will be
built-in. This will make the production process much more reliable, so there will be less need
to inspect production output. We make inspection each of the cupcakes produce stage until
it become the finish goods.
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Quality control is the traditional way of managing quality. Other than inspect the products
during the development stage, we also concerned with checking the output that has been
done before its start to distribute to our stores. For example, we do lots of inspection, testing
and sampling during the production process.
Now, a modern form of quality management, name Total quality management (TQM) is
apply in our process. In essence, it is emphasizes all parts of Myth Cupcakes to
continuously improve in quality. We focus on two key objectives, which are 100% customer
satisfaction and zero defects. We prevent the defect during each of production stage.
Besides, we also aim to produce zero defect cupcakes. Furthermore, we concern the quality
not only at the production process, we also involve other department. We always employ
specialist to make research to continue improve our products and also process. Moreover,
we encourage employee involve in spotting the improvement opportunities for quality and
identifying quality problems.
8.0 Future Planning
Increasing health consciousness bodes well for the future of cupcakes. As the treat,
cupcakes have become popular as snack, buyers have become more discriminating in
rejecting Styrofoam/hockey puck products for those with better textures and flavors. The
range of designer flavors offers something for every taste, and of course, the consumer can
top cupcakes of choice with fruit, peanut butter, or other enhancements to make an even
more varied snack. In an age of energy, health, and time awareness, the cupcakes that
contain preservation and additive seem to have harvested its long history. Therefore, Myth
Cupcake also moves toward the healthy lifestyle by reducing the preservation and additive
in cupcakes producing. We substitute it by more healthier and natural material such as
pandan leaves substitute the artificial flavor to make cupcakes.
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