Business Report for King’s Frozen Italian Foods Inc.

Introduction 

The King’s Frozen Italian Foods Inc. has been in operation for over five decades. The company was founded by Luigi in the early 1960’s who had a vision of establishing the largest and most reliable food distribution business in Italy; a dream that he achieved before his death. King’s Frozen Italian Foods has since been run by the family of the late founder. However, the business has been facing low profit turnovers due to high operational and management costs, and market share slumps. These two problems have been caused by retrogressive ways of running business in the twenty first century; the business is overstaffed with 300 hourly workers, 10 supervisors, is experiencing high employee turnover rate, at least one injury per month, use of paper only transactions, high picking error rate, inaccurate inventory counts, manual picking by hand, clutter and staging inconveniencing use of shipping bays. Therefore, this business report aims to address these problems and outline possible solutions to each one of them to ensure that the company is able to compete actively in the 21 st century. 

Discussion 

300 Hourly Workers 

King’s Frozen Italian Foods was the largest distributor of food in the country, thus, the business needed an employee size that matches the market demand to avoid issues such as delayed deliveries. However, in the recent past, the business has experienced a reduction in sales volume, hence overstaffing. Overstaffing has adverse effects on the wage bill and profit margin, hence resolving it results to a positive impact on business turnover. The business management should analyse and identify peak hours, slow hours, and lean seasons for the business using historical data collected from sales records for the last five years. Based on the results of the analysis, the management should reduce hours for each worker through arrangements such as working half-day on Fridays, part-time working, or a three days weekend. Currently, the 300 employees work each eight hours a day which brings the total number of labour hours to 2400. Based on an average pay of $12 per hour, the total wage in a day is $28,800 and $201,600 in a week. However, introducing half days on Fridays cuts the cost by $14,400 whereas reducing the number of working hours for each employee to averagely 5 in a day also cuts the wage bill by $10,800 every day. A three days weekend on the other hand reduces the wage bill by approximately $52,000 and also gives employees ample time to rest and boosts their morale too. 

10 Supervisors 

The work of supervisors in the business since the 1960’s has been to ensure that the junior staff commit to the duties assigned in various dockets within the firm, and that business goals and objectives are met ultimately. However, since the business is currently facing high operational costs, a new business management model is necessary to minimize costs and maximize profits. Introduction of a KPI Business Intelligence system will help solve this problem. A KPI system will line up the business to its strategy and objectives, while at the same time establishing a model where each employee has a personal KPI to gauge their success, guide their decision-making process at work and ultimately boost their performance. Therefore, supervision of work is automated, thus reducing wage costs. A good example of an outstanding KPI software system is the Dundas BI system which has a data visualization platform, integrated dashboards, reporting tools, and data analytics tools (Software Advice, 2019). Therefore, based on the weight of daily tasks a target KPI is set by the BI system where each employee has to meet at the end of the day, and can easily be monitored through the database. The average cost of installing this system is $10,000. Additionally, such a system instills personal discipline within employees hence bringing out the best version of themselves, which is good for the business in terms of productivity and also for employees' career growth. 

Figure 1.1: Dundas BI system 

High Turnover Rate 

King’s Frozen Italian Foods Inc. has been experiencing high employee turnover rates which is an indication that most members of staff are unhappy with their work environment. Management of the firm should establish a model that aims at boosting employee morale at work and also ensure that the right fit is hired. The firm’s recruitment process should be restructured to include best fit tests such as behavioral assessments and personality tests to hire candidates that are perfect fits in the cultural environment of the business. A behavioural test will expose a candidate to various scenarios that are common at King's Frozen Italian Foods to gauge their reaction and attitude while personality tests checks fitness in the culture and team work. This strategy will ensure that the firm has the right people who will be satisfied with the social and cultural environment of King’s Italian Food. 

Management of the company should establish shift schedules that are fair. Through an internal survey, feedback on current shift schedules can be collected and analyzed to understand individual needs of the staff about shifts, which can then be processed to develop the most convenient schedules ( Abbasi & Hollman, 2000) . The company should also establish a recognition program having accolades such employee of the month awards and employee of the week praises on a bulletin board within the firm’s premise. Training opportunities for career advancement in supply and chain management, business management, information technology, and food handling will also be essential in boosting employee morale at work and curbing turnovers. 

One Injury per Month 

Proper risk assessment is necessary to identify the exact risk points within the business premise. These risk points should then be marked using a signage approved by the Occupational Safety and Health Administration ( Koller, 2005) . For instance, most reported accidents have occurred at the dispatch area hence it should be marked to avoid future accidents. Additionally, training on safety management should be conducted on a weekly basis to constantly remind the workers about safety measures and risk points within the firm. A good reminder of safety such as stickers around the premise of the firm with words ' Safety no pain, no safety pain' will be a perfect strategy to help staff members take care. 

Paper only Transactions 

Automation of transactions is necessary to improve efficiency, transparency, and promote a clean environment within office premises. There is need to purchase either an Oracle Relational Database Management System or a Microsoft SQL server to store data on all transactions conducted by the business with its suppliers, employees, order pickers, and clients. The database systems should then be linked to mobile apps designed with friendly user interfaces specific for customers, employees, suppliers, order pickers, and other parties involved in business with the company. 

High Picking Error Rate 

Due to the volumes of orders involved in a distribution business, and diversity of products especially for the food line of business, it is easy to have errors during picking from the warehouse. King’s Frozen Italian Foods Inc. is currently experiencing a high picking error rate. This problem can be solved through implementation of four major techniques. Use of visual aids such as bright colors to highlight orders that belong to a similar product will help the order picker easily identify what to pick and group in one category. Additionally, orders that might call for special attention such as fish can be highlighted differently as sensitive packages using red ( Woelfle & Guenthner, 2011) . Part number identification should also be used to label all products with unique part numbers to avoid confusion that arise during picking especially for orders that have almost the same style of packaging. As Woelfle and Guenthner (2011) infers, careful staging of product is also another technique where travel time involved is cut down by more than half so that the order picker gets ample time to select orders. Staging store orders as close as possible to the picking area is part of this initiative. Last, smart sorting of orders where similar orders are filled together will increase the efficiency with which orders are filled and enable the picker focus on one order at ago. 

No Accurate Inventory Counts 

Inaccuracy in inventory counts is a problem that has been persistent for many years mainly because the process is handled manually through physical counting. Accurate inventory counts can be achieved through adopting use of barcodes and RFID technology to uniquely label products (Altemir Consulting, 2019). The technology administers a unique barcode to a product during packaging; the barcodes are master data and are validated by the RFID technology which then monitors every stage the product goes through from purchase, receipt, consumption, quality control, and shipping. Therefore, the system tracks the number of products remaining in the warehouse, those in transit, and those already delivered to the respective clients, hence preventing errors in inventory counts. The barcode and RFID technology installation will cost the company approximately $8,000 if outsourced from technology vendors and slightly above $12,000 if done in-house. 

Figure 1.2: Barcode and RFID 

All Picking Done by Hand 

Hand picking is a tedious process and consumes a lot of time. The success of a distribution business relies heavily on time management since time dictates delivery promptness which translates to customer satisfaction levels. Therefore, King’s Frozen Italian Foods needs to improvise on a picking method that saves time to ensure that deliveries are made in good time. Automation of the picking process through the use of conveyance in the warehouse, work stations, and picking areas will reduce extensive travel time. Conveyance requires power which the company should be ready to adjust to solve the impending problem. 

Only One of the 3 Shipping Bays Can Be Used at a Time Due to Clutter and Staging 

Clutter and staging have also been a major hinderance to proper time management at King’s Frozen Italian Foods. All the three shipping bays need to be used at ago to minimize on time wastage during shipment of orders. Therefore, closets for storage should be thinned out to increase space for easy movement; old and unnecessary material should also be disposed to create enough room for movement; and high traffic areas especially leading to the shipping bays should be cleared by disposing off old tools. For instance, old trolleys and worn out canvases should be disposed through implementation of the conveyor system. 

Conclusion 

The problems faced by King’s Frozen Italian Foods Inc. are sourced from the fact that the company has not automated its systems and processes to increase efficiency in delivery of services to the clients, stay relevant, and keep up with both competition in the market and technological advancement. Implementation of the recommended solutions to each of the problems identified will enable the firm to save time, promote a healthy employee environment and culture, achieve increased market share and sales, and obtain competitive advantage. However, the business management should be ready to raise a capital budget of not less than $200,000 to facilitate the necessary changes. 

References 

Abbasi, S. M., & Hollman, K. W. (2016). Turnover: The real bottom line.  public Personnel management ,  29 (3), 333-342. 

Altemir Consulting, (2019). Poor Inventory Accuracy and How to Effectively Correct it. Retrieved on November 14, 2019 from https://www.altemirconsulting.com . 

Koller, G. (2005).  Risk assessment and decision making in business and industry: A practical guide . Chapman and Hall/CRC. 

Software Advice, (2019). Best KPI Software-2019 reviews. Retrieved on November 14, 2019 from www.softwareadvice.com . 

Woelfle, M., & Guenthner, W. A. (2011, May). Wearable RFID in order picking systems. In  RFID SysTech 2011 7th European Workshop on Smart Objects: Systems, Technologies and Applications  (pp. 1-6). VDE.