Case Study 225

Q1.

Social media websites such as Facebook, Google+ and Twitter are platforms for companies to promote their products at little to no cost. The operations department can therefore reduce its daily costs of advertising by focusing more on online advertising than traditional means (television, newspaper, and billboard advertisements). It forces the department to put more of a focus its online presence to gather information; online statistics can be useful in order to measure demand and the success of certain promotions. If demand can be better approximated, the operations department can decrease carrying costs and productions costs (more efficient production). This information can also be used to further understand customers and potential customers, for example, if Cold Stone sees that customers that like their products also like croissants, they can adjust their strategy by adding croissants to their production line, or use online advertising campaigns to specifically target those who also have croissants in their interests. The operations department is also interested in feedback that the customers take the time to write via social media websites. Specialists could be hired in order to create a personality for the company; to take the time to answer questions and understand the online customer. The benefits to this in operations is building customer loyalty.

Q2.

The technology involved in order to produce and sell ice cream is important and constantly changing in order to reduce cost and increase efficiency in production. Due to the nature of the product (has to be kept cold; temperature requirement), it needs to be refrigerated in order to make it to the final stage of the chain.

The supply chain for Cold Stone starts from the dairy farm to acquire the cream necessary (procurement stage). The raw materials, in this specific case, are perishable; therefore time management and haste is essential. The cream then needs to be transported to the...