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Kingfisher School of Business and Finance1 st Semester A. 2020-Written Case Analysis No. 1BRUEGGER’S BAGEL BAKERYSubmitted by: Macalanda, Michael Kenn C. Matabia, Jeramy Vincent Paduit, Jonathan R. Perez, Jerson Leal, Mary Joy P. Maramba, Denise Daniela Nicole O. Mararac, Audrey Marie S. Saguiped, M...

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Kingfisher School of Business and Finance 1st Semester A.Y. 2020-2021

Written Case Analysis No. 1

BRUEGGER’S BAGEL BAKERY

Submitted by: Macalanda, Michael Kenn C. Matabia, Jeramy Vincent Paduit, Jonathan R. Perez, Jerson Leal, Mary Joy P. Maramba, Denise Daniela Nicole O. Mararac, Audrey Marie S. Saguiped, Mae M. Soriano, Roshayne D. Veniegas, Graciela Mae B. Group 6

Submitted to: Ms. Mylahnie R. Lopez Instructor

Date of Submission: October 28, 2020

I. Statement of the Problem In 1983, Sun Capital Partners Inc. owned by Brue and Dressel established the Bruegger's Bagel Bakery which then produces only one flavor or bagel. As time passed by, the business has transformed into a $3 billion industry which currently operates with over 450 shops generating an average annual sales of $800,000. Since then, the business has gained high returned value from its customers because of its unique and high quality bagels. In order to ensure that they retain the quality and original taste of their products from the manufacturing to distribution, the company carefully choose and store ingredients, keep equipment in good condition, and train competent employees. While other bagel industry freeze their products for distribution, Bruegger makes its products with less preservatives and limited refrigeration to retain the original taste of their bagels through maintaining relatively small amount of inventories at its plant and stores. Therefore, how could the Bruegger's Bagel Bakery minimize the possible drawbacks of maintaining small inventories and what inventory model could it effectively use to retain product’s freshness, meet customer demand, minimize cost of storage, and reduce waste products simultaneously?

II. Objectives The objectives of this case study are the following:  To provide an insight about how to improve inventory management of bakery when it comes to their policy of maintaining a small amount of inventory at their plants and retail stores considering its advantages and risk.  To identify possible strengths, weaknesses, threats and opportunities of the said case.  To present an alternative courses of actions to be taken, as well as choosing the right inventory model that suits and give the most appropriate idea for deciding how many bagels to make.  To recommend an actions about how should the problem be solved to continue their goal of serving customers with high quality fresh products  To adopt an ethical inventory policy ensuring to meet the customers demand, minimized cost and reduced waste products.

III. SWOT Analysis Strengths • Process Uniqueness- bakery makes its products using the time-honored, traditional methods that had made New York famous for bagels like kettle-cooking the bagels, then baking in a real stone hearth oven. H • Quality Ingredients- uses real made-in-Vermont cream cheese which provides the smooth, delicious foundation for a dozen unique blends. Weaknesses  Supply chain risks- breakage in supply chain can lead to unavailability of the stock. Gluten products don’t stay fresh as long as wheat based pastries. Brueggers Bagels Baketry does not store baking products in order to maintain high degree of freshness on the final product.

Opportunities  Health benefits related to bagels- because of the low-fat characteristic of bagels.  Business expansion to catering industry- This could increase the market reach for the business because it does not only provide on premise consumption but also caters to a variety of clients for special events. Threats

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Cheaper commodities from competitors- consumers mainly focus on quantity and not quanlity. They will not be willing to spend more money on breads if they can afford a bread from other shops.

IV. Alternative Courses of Action (at least 3 alternatives) 1. Use of two-bin system. Advantage: No need to record each withdrawal from inventory because it automates stock replenishment and ensures optimal availability of inventory. Disadvantage: The reorder card may not be turned in for a variety of reasons such as misplaced or the person responsible forgets to turn it in 2. Use EOQ model. Advantage: Control the amount of cash tied up in the inventory balance by minimizing the cost of carrying inventory and processing of purchase orders. Disadvantage: Requires both the detailed data and the understanding of these data to calculate several figures and it also requires for continuous monitoring of inventory levels. 3. Bagel-making machine in each shop. Advantage: Satisfy the demands of the consumers while retaining the product freshness, minimizing the shipment costs and reducing waste products. Disadvantage: Having a bagel-making machine means having a larger space for the station of the machine thus, additional cost is needed. 4. Inventory Management, Just-in-time and Waste Management Efficient inventory management system to have an accurate forecast on how much inventory they will need based on sales activity. This way, they can place an orders accordingly to prevent stock out and overstock of bagel. They can minimize the level of inventory by only producing for specific customer order and it minimizes the cost of storage and reduce waste products through implementing waste management. V. Ethical Consideration One of the most important part of the bagels product is its quality because it emphasize the company's assurance and reliability of providing that goods wherein sellers must outweigh their customers expectation by providing valuable product at the most affordable price. In order to maintain the machines equipment accuracy, hiring skilled employees can improved the production efficiency while monitoring the equipment at a regular interval in order to prevent errors. The product also requires different flavors and varieties which can improves its tastes, texture and freshness with careful and precise production to avoid health issues caused by poor

inventory management. Bruegger's doesn't hold too much inventory in order to avoid spoilage of the products but it can't handle different risks like shortage from unexpected demands and trade-offs between holding and ordering costs. VI. Recommendation The company’s policy of maintaining minimal inventory of raw materials contributed well through reducing costs of storing and ordering. It also minimizes the number of product that will be wasted when unsold. However, despite these benefits, there are some drawbacks alongside. Small amount of inventory cannot accommodate sudden rise of demand. Shortage in raw materials may take place during production. To avoid these, the company should conduct a demand forecasts to know the peak and off season so they can estimate how much of raw materials to order for the production and how much bagels they should produce. They should also consider training their employees properly to provide better service. The equipment and machines should undergo periodic check-ups and inspection to maintain its good condition since machine maintenance is important in the food industry.

VII. References WowEssays. (2019, December, 26) Case Study On Brueggers Bagels Bakery Case Study. Retrieved October 27, 2020, from https://www.wowessays.com/free-samples/case-study-onbrueggers-bagels-bakery-case-study/ Sribd (2019, Jul,4) Case Study: Bruegger’s Bagel Bakery Retrieved October 27, 2020, from https://www.scribd.com/document/415598728/Bruegger-s-Bagel-bakery-docx...