OPERATIONS MANAGEMENT OF Fatt choi Coffee (1)

PROCESS STRATEGY APPLIED

Fatt choi coffee factory Tenom had applied product focus for its process strategy. As we
can see their facilities are organized by high volume but low variety of product, this
process also runs a long, continuous production to enable efficient processes. It is also
typically high fixed cost but low variable cost, the company also generally has less
skilled labor. As we observe they are using both foreign and local worker. Since, the
factory is not too large their only using few workers.

TECHNOLOGY ISSUE

Fatt Choi coffee factory is using a semi auto method in producing their products. For
example, during the first process, they are manually using their hand to pick the right
coffee beans, dry it and roasting it. But at the same time, they are also using a machine
for packaging in order to produce their product effectively and efficiently to meet their
customer demand.

COMPETITIVE ADVANTAGE

There are many competitors in the industries of coffee since people nowadays are likely
to consume coffee. One of its biggest competitors is Yit Foh Coffee factory which also
located near Tenom. But, there are several factors that differentiate them with their
rivals. Firstly, the main types of coffee they use, which is Robusta. Secondly, the aroma
and taste of the coffee is totally different from the others. This only can be recognized
by the coffee lovers only. Thirdly, they have many types of product mix and they also
supply to the airport, which they offer two times of its original price.
RELATED ISSUE TO OPERATIONS MANAGEMENT

Fatt Choi coffee Factory, Tenom has a very well organized operations management. In
term of location strategies, Tenom has become the best geographical area for planting
coffee trees that make it famous each day. By doing the location decision, they have
considered several key success factors for their company to be well known. Firstly is the
attractiveness of the region. Tenom is well known as the coffee land and it has attracted
many visitors to come to Tenom to taste the tastiness of the best Tenom Homemade
coffee and they provided Cabin to be rented so visitors can stay there for several days
to enjoy the wonderful trip to Fatt Choi Factory. In addition, Tenom is near to Keningau
whick Keningau is famous with producing cinnamon. Thus , Fatt Choi has diversified its
product by producing coffee with cinnamon. Secondly, is about the labor availability and
cost. Since they hire both local and foreign worker, they can pay cheaper wages and at
the same time increase productivity. Since the coffee tree is suitable to be farm in
Tenom, it can lower the cost for production process. Other than that, they also consider
the proximity to markets. Nowadays Coffee Tenom has a higher demand. During our
trip to Tenom,it has been said that there are one Spa company from the peninsular that
will order the coffee in bulk almost every month from Fatt Choi. That means, it has it
owns specialty why Fatt Choi coffee has been the chosen one. it gives the best service
of transportation. It also requires less cost because their method of processing the
coffee beans is semi auto.

Since nowadays there are many competitors, Fatt Choi has expanded their production
by becoming the agent for F&N and Seasons manufacturer, which means they are
joining the supply-chain partnering (joint venture). This has become one of the biggest
successes in operations management field.
REFERENCES

1. http://roastcoffee2u.com/en/home-and-office-promotion/ph101-coffee-promo-package.html
2. http://www.journals.elsevier.com/journal-of-operations-management/
3. http://meetings2.informs.org/Montreal98/TALKS/TD17.html
4. www.yahoo.com
5. www.google.com
6. Notes during the briefing(Q&A).
7. Slide Operations management.