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What the Case is About
This case describes how a baking company operating in a small town has increased its competitiveness. One measure directed toward achieving a competitive advantage is increasing the company’s productivity. This was done by using the computer to determine the necessary amount of ingredients, decreasing the required space by cutting cookies diagonally, and increasing the length of ovens. Furthermore, the company bakes cookies in a sequence that allows for minimizing cleaning and captures the heat escaping from ovens to heat the building. Another way in which the company improved its competitiveness is by focusing on the quality of products, which involves removing defective cookies, tasting them, and minimizing inventory to ensure the freshness of the product. Finally, the bakery continuously searches for new product ideas and launches them after their marketing tests show that there is a demand for the product.
Lessons Learned from the Case
The first lesson learned from the case is that high productivity is vital for effective business operations. Increasing the length of ovens, minimizing cleaning time, and cutting cookies diagonally, among other actions, has enabled the company to increase its productivity and, thus, boost its profits. The second lesson is that automation is an effective way of increasing productivity. The company has automated the process of choosing and mixing ingredients, which increased its output. The third lesson is that organizations choose a particular strategy, and their operations should be aligned with the selected strategy. For example, the bakery’s organizational strategy is differentiation since it aims to provide customers with high-quality products. Therefore, its operations are directed toward delivering high quality. Finally, this case teaches that companies should pay attention to the sustainability of their operations to improve their competitiveness. The bakery did so by minimizing inventory, reducing waste, and holding back automation to keep 30 workers employed.
The Relation to the Theories
The first lesson can be related to the concept of productivity and its importance for competitiveness. Dresch, Collatto, and Lacerda (2018) and Stevenson (2014) stress that productivity is one of the main measures of the company’s competitiveness. Productivity refers to how effectively the organization uses its resources and is aimed to achieve “the maximum results with the minimum of efforts” (Dresch, Collatto, and Lacerda, 2018, p. 72). In the case study, the bakery used its resources (ingredients, ovens, energy, and others) in the most effective way, thus increasing its productivity and, consequently, competitiveness. Further, Aghion et al. (2020), Camiña, Díaz-Chao, and Torrent-Sellens (2020), and Stevenson (2014) state that technological improvements are one of the main sources of productivity gains. However, Camiña, Díaz-Chao, and Torrent-Sellens (2020) and Stevenson (2014) note that, although technology is important for improving productivity, it will not provide any benefits without proper employee training and skills. In the given case, the bakery must have trained its employees to use the batch processing system to automatize the baking process successfully.
The learning from the case study also allows for linking it to the three types of business strategies. As Potjanajaruwit (2018) and Stevenson (2014) point out, companies may choose between low cost, responsiveness to customer needs, and differentiation from competitors. According to Potjanajaruwit (2018), each of these strategies is intended to deliver value to customers, and Stevenson (2014) stresses the importance of aligning the chosen business strategy with the operations strategy. As was mentioned, the bakery selected the differentiation strategy in quality, and its operations were designed to provide customers with consistently high product quality.
The final theory related to the lessons learned from the case is sustainability. It refers to energy-efficient and environmental-friendly operations and includes such measures as minimizing inventory and waste, increasing value, and others (León and Calvo-Amodio, 2017; Stevenson (2014). León and Calvo-Amodio (2017) and Stevenson (2014) stress that sustainability is linked to productivity and customer satisfaction. Therefore, it is important for organizations to include sustainability in their strategies because it may help them run their businesses more efficiently and meet the customers’ expectations regarding companies’ societal impact.
Reference List
Aghion, P. et al. (2020) What are the labor and product market effects of automation?’, Research Briefs in Economic Policy, 225, pp. 1-2.
Camiña, E., Díaz-Chao, Á. and Torrent-Sellens, J. (2020) ‘Automation technologies: long-term effects for Spanish industrial firms’, Technological Forecasting and Social Change, 151, p. 119828.
Dresch, A., Collatto, D.C. and Lacerda, D.P. (2018) ‘Theoretical understanding between competitiveness and productivity: firm level’, Ingeniería y Competitividad, 20(2), pp. 69-86.
León, H.C.M. and Calvo-Amodio, J. (2017) ‘Towards lean for sustainability: understanding the interrelationships between lean and sustainability from systems thinking perspective’, Journal of Cleaner Production, 142, pp. 4384-4402.
Potjanajaruwit, P. (2018) ‘Competitive advantage effects on firm performance: a case study of startups in Thailand’, Journal of International Studies, 11(3), pp. 104-111.
Stevenson, W.J. (2014) Operations management. 12th edn. New York, NY: McGraw-Hill Education.
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