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Frito Lay case study - Grade: A

Operations Mgt (University of Massachusetts Boston)

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Tu Nguyen
Ben Keilman
Case Study Analysis
Frito Lay case study
I. From your knowledge of production processes and from the case and the video,
identify how each of the 10 decisions of OM is applied at Frito-Lay.
1. Design of good and services: Frito currently owns 7 successful products that contribute a
huge amount of profits to them. However, Frito Lay always tries to make some
innovation in their product designs. Their product development department would
experiment with new products and send them to evaluation groups who are responsible
for its marketing testing. After these processes, they can decide whether they should
launch these products or not.

2. Managing quality: Frito Lay has a strict quality control process that involves a variety of
process such as visual inspection, oil control, weight control, etc. Moreover, they also
conduct quality checks throughout shipment, receipt, production, packaging, and
delivery.
3. Process and capacity design: Frito-Lay’s process should be suitably design for their high
volumes and small variety, so they have to invest heavily in some high-technology
machine that can sustain the rapid process. Moreover, they also focus on green
manufacturing and sustainability. They use solar energy to reduce their electricity
expense and recycle carton boxes to protect the environment.
4. Location strategy: Because chips require a high freshness of input materials so Frito Lay
has to set up their plant near raw material sources. Moreover, their plan should be near
the retailers to make on-time delivery.
5. Layout strategy: Sanitary problems and rapid processing of product require Frito Lay to
focus on the efficiency of their plant layout. The assembly lines should be easy for
workers to do all production steps in the shortest time.
6. Human resources: There are cross-training for workers who have to operate a variety of
production lines. The firm also gives them a specific path with a good promotion policy.
Frito Lay also rewards employees with high condition of medical, retirement, and
education policy.
7. Supply-chain management: Supply chain is a very important factor that brings success to
food-related company. The quality of finished product is highly dependent on the
freshness of raw material. Frito Lay should strictly choose good vendors that can supply
high-quality raw materials on time, so they can enhance their production’s efficiency.
8. Inventory, material requirements planning, and JIT: The inventory turnover rate for
Frito-Lay is 200 times per year. This allows for better flow of fresh goods.
9. Intermediate and short-term scheduling: Frito-Lay upholds tight scheduling to ensure
the proper mix of fresh finished good on automated equipment, which requires reliable
systems and effective maintenance.
10. Maintenance: Frito Lay has to focus on maintenance because downtime is very costly and
leads to a delay in production. They trained their employees to recognize the flaws early

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and do a professional fix, so they can avoid some problems that force them to stop their
production lines.

II. How would you determine the productivity of the production process at Frito-Lay.
The productivity of the production process can be determined by the output over input.
For example, output could be something in pound and input could be labor hours. However, for
multifactor productivity, we must take into consideration capital, labor, material, and energy.
III. Comparison

Hard rock cafe Frito Lay

Product designs Their product is food and their
service is music.
 They keep changing their
combination of food and
music to enhance benefits
that they bring to their
customer.
Managing quality They used survey as their main
quality measurement. These
surveys involve many aspects
that customers can completely
evaluate Hard rock Café’s
services.
Process and capacity design
Location Located near tourist areas
Layout
Human resources Having many different positions
Staffs not only have good skills
for their specific tasks but also
show their passion in music and
collaborate with others
Supply chain management
Inventory
Scheduling Fluctuation in sales.
It highly depends on seasonal
factor
Maintenance
Innovation in product design.
Strict evaluation before launching a
new product.
Many quality inspection points in
each specific process such as
peeling, packaging, and shipping.
Mass production
Green production
Plants were located near raw
material suppliers
Reduce movement time of workers
High rewards for workers
Efficient trainings
Focus on raw material suppliers
Run and operate 24/7
High intense production
Rapid production requires good
maintenance

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