HP Sales and Production Flashcards
What is a downside of a B2B model?
Limits pricing control
What is the effect of HP’s domestic focus?
- Limits growth
- Increases market risk
What % of sales is driven by large supermarkets?
- 80%
- Reduces pricing control
What % of sales is driven by small retailers?
- 20%
- Reduce reliance on supermarkets
- Require more management
- Gives HP more negotiating power
What are the credit terms for large retailers?
- 40 to 60 days
- Large receivables
- Pay less per unit (bulk buy), reducing profit margins
What are the credit terms for small retailers?
- 20 to 40 days
- More profitable
What is the impact of supermarkets delaying payments?
- Creates cash flow pressure
- HP must have strong WC management
How many days a year is the production facility open?
- 360 days
- improves efficiency
- increases operational risks
- raises questions about cost effectiveness
What is the impact of HP using batch production?
- Helps cost control
- Needs accurate forecasting
- Creates risk of wastage
What are the batch sizes?
- Loaves = 2500
- Rolls = 2500 packets
- Loaves require twice as much dough
What are the 5 production departments?
- Mixing and Kneading
- Shaping and proving
- Baking
- Cooling
- Packaging
What is the impact of a structured production system?
- Helps efficiency
- Requires costs control
- Division of labour
- Individual department challenges
What are the 4 service departments?
- Raw materials stores
- Machinery maintenance
- Facilities maintenance
- Employee canteen
Why are service departments important?
- Prevent disruption
- Add indirect costs (generates no revenue)
What are the details of the raw materials stores?
- Bulk storage improves efficiency but increases risk of wastage
- Balance stock levels carefully
- Strict ingredient control ensures quality but raises supply chain risk
- JIT delivery
- Flour stored in large silos, other dry ingredients in smaller silos, yeast in large sealed bags
- Next door to mixing and kneading - efficient
What are the details of the mixing and kneading department?
- Machine specialisation improves efficiency but requires demand forecasting
- Automation improves consistency but requires system reliability
- Resting time of 15 mins impacts overall production efficiency
- Kneading consistency directly affects product quality and waste levels
What are the details of the shaping and proving department?
- Machinery ensures consistency but requires maintenance
- Proving ensures consistency but increases energy costs, reducing profit
- Dough tipped out of mixing and kneading machine by hand - opportunity for automation
- Further resting improves quality but slows production flow
What are the details of the baking department?
Baking is energy intensive and downtime increases costs
What are the details of the cooling department?
Affects shelf-life and inventory turnover
What are the details of the packaging department?
- Slicing variation requires planning
- Date labels mean stock rotation is required
- Packaging impacts costs
