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Kitchen Made Pies
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Kitchen Made Pies has clearly been struggling over the past four years. Is this the beginning of the end or is there some hope left for Paul Dubicki? He obviously has a lot going for him right now (1981). The economy has taken a turn for the worse. Fresh pie sales are slowing due to the rising popularity of in-store bakeries. They have also had credit problems with one of their top clients. However, I feel the biggest problem of KMP is their inability to control labor costs. Sales have actually been steady during these last four losing years. It has been their increased costs that have got them in trouble as of late. Can they improve their production techniques in order to increase efficiency and reduce costs? Mr .Dubicki is intent on offering a wide range of pies. The trouble with this is the ridiculous amount of downtime the facility has every time they need to change the size or flavor on the machine. They spend 15 –20 minutes each time they change sizes. They lose another 4-5 minutes each time they switch flavors. This amounts to 136 minutes a day where nothing is being produced. The labor workers are still working and getting paid. The company just has nothing to show for it. Mr. Dubicki’s biggest concern with purchasing a more efficient machine is obviously the up front cost of $150,000. The company is currently low on cash and is also having trouble getting credit from their bank.
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