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Pamantasan ng Lungsod ng Maynila

(University of the City of Manila)


Intramuros, Manila
College of Engineering and Technology
Mechanical and Manufacturing Engineering Department

Case Study Analysis:


Lew Mark Baking Company

Joshua Raymond F. Alavarado


Randxell D. Cator
Paul John S. Gomez
Jofer G. Santiago

Engr. Arnel Q. Lucas


March 17, 2015

I.

Viewpoint Brothers Lew and Mark, owners of Lew-Mark Baking Company

Time Context - Third quarter of the year, July 2015

PROBLEM STATEMENT
The Lew-Mark Baking Company owned by brothers Mark and Lew
has a goal of finding potential improvements for the bakery. One of the
proposals for improvement is to automate packing the cookies into boxes.
Another possible key for development would be to transact with suppliers
located closer to the plant.
Despite different opportunities to change their suppliers in the
recent years, the owners rejected them in fear that the quality of their
products might suffer. The owners also resisted the idea of shifting to
automated packing for they feel an obligation to their community to employ
30 women to do the boxing manually.
This study will analyze the factors affecting the resistance of the
company to possible improvements and the effectiveness of its current
policies.

II.

STATEMENT OF THE OBJECTIVES


The overall goal of this study is to determine the factors affecting
the resistance of the management to improvements. The specific
objectives of this study are to:
Identify the strength and weaknesses of the current policies
Analyze the possible improvements for the company

III.

AREAS OF CONSIDERATION
One of the most significant strengths of Lew-Mark Baking Company is
using the batch processing system. The batch processing system can best be
described as the execution of a series of programs ("jobs") on a computer
without human interaction. This method helps with quantity management
because Lew-Mark Baking Company only makes cookies according to demand.
The high quality of cookies has enabled the company to develop a strong market
niche for its product. The bakery also runs efficiently and has minimal amounts
of scrap. Rejected batch of mixes are sold as dog foods and broken cookies are
used in producing oatmeal cookies, thus generating extra income.
Due to making only one product, the Lew-Mark Baking Company
customers are often people over 45 years of age, young children and health
conscious segment of the market.
The most obvious opportunity for Lew-Mark Baking Company is that they
gained a good reputation on their soft cookies. Creating a new line of products
will attract a bigger market.
The biggest threat for Lew-Mark Baking Company is that larger companies
such as Nabisco, Sunshine and Keebler are dominating the market because they
are producing hard and crispy cookies which attract a lot of consumers, mostly
youth and adults.

IV.

ASSUMPTIONS
The study is conducted based on the following assumptions:
A. The owners lack knowledge in advanced machineries
B. There is an outstanding contract between the company and

their suppliers.
C. The owners are contented with their present outcome and
would not risk it for new developments.

V.

ALTERNATIVE COURSE OF ACTION


In order to attain the objectives presented in this study, certain courses of
action can be put into consideration as stated below:
A.
B.
C.
D.

The company should try new suppliers that are closer to the plant.
The company should move closer to the location of the supplier.
The company should shift to automated packaging
The company needs to introduce new types of cookies specifically

the hard and crispy cookies.


E. The company needs to produce certain cookies with preservatives
and additives.
VI.

ANALYSIS
ACA A. The company should try new suppliers that are closer to the
plant.
Advantage/s:

The delivery time will be decreased


The delivery cost will be reduced
Fresh ingredients will be delivered

Disadvantage/s:

The ingredients taste might change


The quality of the product might falter

ACA B. The company should move closer to the location of the supplier.
Advantage/s:

Transportation time will be decreased


Transportation cost will be reduced
Fresh ingredients will be delivered

The quality of the product will be preserved

Disadvantage/s:

Additional expenses for construction of new building and


factory

ACA C. The company should shift to automated packaging


Advantage/s:

Production time will be lessened


Production cost will be reduced
Labor cost will be decreased
Increase in efficiency and productivity

Disadvantage/s:

Termination of workers
Negative impact to community
Additional expenses for new machines

ACA D. The company needs to introduce new types of cookies specifically


the hard and crispy cookies.
Advantage/s:

Additional source of profit


New customers for the business

Disadvantage/s:

Additional expenses for new machines and ingredients


Competitors are already in the market
Consumers might not like the product

ACA E. The company needs to produce certain type cookies with


preservatives and additives.
Advantage/s:

Prolongs the life of cookies by two weeks


Products can be distributed now to super markets

Disadvantage/s:

Consumers might find it unhealthy


Might lose their reputation to health conscious
consumers.

VII.

CONCLUSION
Table 1. Decision Matrix

Factors

ACA A

ACA B

ACA C

ACA D

ACA E

Cost

Quality

Time

Consumers
Satisfaction

Profit

Total

17

11

21

14

12

*1 being the lowest, 5 being the highest

After analyzing each of the alternative courses of action, this study


concluded that shifting to automated packaging is the best proposal for further
development of the business. From table 1, ACA C gathers the most number of
points in the decision matrix. This validates that by shifting to automated
packaging from manually boxing cookies will greatly help the companies
operation. ACA C accumulates the highest score in terms of quality and
consumers satisfaction. ACA A and ACA D fall to second and third options for
possible improvements of the company.

Table 2. Decision Matrix with General Weighted Average

Factors

ACA A

ACA B

ACA C

ACA D

ACA E

Cost

Quality

Time

2.2

4.2

2.8

2.4

Consumers
Satisfaction

Profit

3
3

General
Weighted

3.2

Average

* Profit 5, Quality 4, Cost 3, Consumers Satisfaction 2, Time 1

After computing the weighted average of the decision matrix, ACA C is still
the best course of action to be implemented by Lew-Mark Baking Company.
Although automating the packing of cookies will increased the companys
efficiency and productivity, Lew and Mark is making the right decision to not
implement it. The company is displaying its commitment to the community and
investing in the employment of local workers instead of machineries. This allows
a company to have a stake in the community and thus foster good relationships
with the local government, political officials and members of the community.
Business and individual who see the company has good intentions to employ and
stimulate the community will also help them to improve their business.
Developing these types of relationships can also be beneficial when it comes to
future plans or expansions.

The fact that the current location of the company is a small community
proves that the obligation of Lew and Mark is even bigger and probably the
reason to not shift to automation. If it were a larger city, faster production would
be the focus of the company and would probably favor automation.
VIII.

PLAN OF ACTION
Continue with the Current Strategy
Lew Mark Baking Company has effective policy implementation and
therefore can continue to expand with the existing strategies but should be open
to possible development that will match with the conventional one. Generally, the
business sets emphasis on quality-based strategy and time based strategy.
Their approach and role in the market is to produce preservative free, healthy,
soft, great taste in quality for the healthy conscious consumers. The company
does a great job delivering the product as demanded. Because cookies are made
according to using a batch processing system, the company has continued to
see high productivity levels while keeping a tight control on inventory levels, and
also considering the well-being of every employee boosting up their moral value.
Invest on Community Commitment
Continuing to employ local workers to pack the cookies by hand allows the
company to be seen as morally concerned about the well- being of the
community and its citizens. Valuing the welfare of every consumer gives them the
opportunity to build a good relationship with the customers.
Maintain the Companys Reputation

Although it would give more profit, it is only wise for the company to
continue to produce preservative and additive free cookies which consumers
have loved through the years. The company sets a good example not only to
future businessmen but also to their competitors the way they stick firm to their
commitment to produce healthy cookies.