CASE 1ORIENT – THE ORIGINAL BUKO PIE BAKESHOP 1 Located along the National Highway in Bgy. Anos, Los Banos, Laguna, Orient - The Original Buko Pie Bakeshop in its almost 60 years of business operations has added a variety of “pasalubong” goodies to serve its local and nationwide clientele. Customers have clamored continuously for a wide variety of sweets and other Los Baños baked products they can bring home for dessert or snacks. Loyal customers seek out these mouth-watering and delectable buko pies that are freshly baked and other goodies which cater to the cravings of people with different ____________________________ 1 This case was prepared by Ian Lee P. Castilla and Jeanette Angeline B. Madamba. This case which is based on real facts is not intended to illustrate correct or incorrect handling of business issues. This case was prepared for classroom discussion only. No brand name was created at that time. the eldest. who now manages the business. the owners were household help of expatriates or foreigners and their families living in Los Baños. the name evolved to Orient – The Original Buko Pie Bakeshop which is the current name it carries. Eventually. Other products produced at Orient include banana bread. the youngest. suggested using “Original Buko Pie” since the bakeshop was the pioneer in the buko pie business in Los Baños. the Pahud sisters saw the need for a brand name to distinguish their product from those of their competitors. they diversified their product lines to include other baked products and goodies such as banana bread. pineapple pie and uraro cookies. Hence. Evolution of Orient – The Original Buko Pie Bakeshop The bakeshop owners include three sisters of the Pahud family: Nenette Pahud-Rizano. Over the years. Virginia Pahud-Castilla and Soledad Pahud. when competitors like Aling Maring’s Buko Pie and Abril’s Buko Pie sprouted around the vicinity. . Proof of such a following is the long queues seen outside the bakeshop day after day. cassava cake. when the Pahud sisters were discussing possible names. They trace the beginnings of their lucrative bakeshop business in 1953 when they started baking buko pie using Nenette’s recipe. buko apple pie.tastes. espasol. Prior to establishing the bakeshop. Alejandro Castilla. They attribute their success to their experience as household help of IRRI and UN families living and working in Los Baños. who invented the Original buko pie recipe. Virginia’s husband. However. O.D. Mrs. it is now imperative that the operations strategy and . In line with the owners’ plan to expand operations to top tourist destinations. Banana bread has been considered as an outsourced item since Mrs. the production of banana bread has been assigned to her daughter.Banana bread making at Orient started as a way to pass the time for one of the bakeshop owners.(cash on delivery). It has been 16 years since the bakeshop has incorporated banana bread into its array of fresh. This production system has been causing angst and strain within the family in terms of inaccurate assigned production quotas and inconsistent quality of banana bread products. homemade “pasalubong” products. This new food item accounts for 13 percent of the bakeshop’s revenues and continues to enjoy a 5-6 percent increase in demand per year. 350-gram “pasalubong” item. Mrs. the Laiya area (Batangas) and Alaminos (Laguna). Operations Strategy for the Banana Bread Product Line Originally baked by one of the bakeshop owners. specifically Tagaytay. Castilla’s daughter. Banana bread products are just delivered to the bakeshop on a daily basis and Mrs. daughter-in-law and niece are paid C. a large-sized version of banana bread (each weighing about 700 grams) was added to the product line. Castilla’s daughter. Highly variable production volume requirements on a weekly or monthly basis are currently not met because of capacity constraints in the outsourcing set-up. Virginia Pahud Castilla. Present daily demand is at 90 boxes for this small. Recently. daughter-in-law and niece have been given a free hand and all production costs are shouldered by them. daughter-in-law and a niece to augment production requirements for the past two years. Virginia Pahud-Castilla. Orient’s potential banana bread making capacity is 300-500 loaves per day. The Production Process Baking banana bread requires several ingredients such as flour. raisins. At present. daughter-in-law and niece each supply Orient with 60 small-sized loaves and 40 large-sized loaves of banana bread every day. When outsourcing of banana bread operations was done two years ago. peanuts. Demand projections show that the daily banana bread requirements (small size) would range from 300350 loaves for Tagaytay. Mrs. Castilla’s daughter. bananas. . Ian Lee. from start to finish or up to the stage when the baked banana bread becomes a packaged product. Castilla assigned her son. vanilla and eggs (Figure 1). buttermilk. to study the bakeshop’s operations strategy for the banana bread product line.processes of Orient – The Original Buko Pie Bakeshop for banana bread products be reevaluated and thoroughly assessed. 80-100 loaves for Laiya and 250-350 loaves for Alaminos. sugar. Ian lee is pondering whether centralizing the production of banana bread by bringing it back to the Orient bakeshop premises and incorporating a JIT II system of production is going to help the enterprise in its expansion plan. Throughput time is less than three hours. Mrs. cream margarine. Such an operations strategy is being contemplated to cope with the expected demand that will come in with the plan. the production area was allotted for buko apple pie making which continues to this day but there is still available space for banana bread making. Ingredients for Banana Bread Making The following may be prepared several hours or days in advance: greasing and dusting the baking pan (5-10 minutes). washing the pre-weighed sugar (8 minutes). either big or small (toasting time is about 10-12 minutes). cutting and pre-weighing the raisins (10-15 minutes). there are 22 more steps in the production process. and preparing the banana bread pre-mix by combining. sifting and putting in resealable plastic all the dry ingredients (about 10 minutes).Figure 1. toasting and segregating the peanuts used for decoration by size. After the preparatory steps up to the banana pre-mix preparation step. A summary of the process in making a batch of twelve 350gram banana bread loaves can be made based on the activity chart shown in Table 1 as follows: Table 1. Orient Banana Bread Activity Chart . O 1 P Q 1 1 R S D.E.Y 3 .W 1 C. sugar and vanilla Mashing of banana Adding mashed banana to buttermilk Adding 2 eggs to banana cream bowl mixture Adding 1/3 pre-mix to banana cream bowl Adding ½ buttermilkbanana mixture Adding ½ pre-mix Adding remaning buttermilk-banana mixture Adding remaining pre-mix Adding raisins Mixing again banana cream bowl mixture Removing mixture from bowl and stirring by hand Pouring and weighing mixture equally into prepared pans Decorating mixture in pans with peanuts Decorating mixture in pans with raisins PREDECESSOR ACTIVITY TIME ESTIMATE (MINUTES) B - 5 3 7 8 7 8 10 3 3 6 6 F.ACTIVITY CODE A B C D E F G H I J K L M N O P Q R S T U V W X Y Z DESCRIPTION OF WORK ELEMENTS Greasing and dusting (with flour) of baking pan Segregation of peanuts Toasting of peanuts Cutting of raisins Weighing of raisins Weighing of washed sugar Banana pre-mix preparation Raw banana preparation Vanilla preparation Margarine preparation Buttermilk preparation Mixing of cream margarine.G.T 1 1 1 U 3 V 1 A.I.X 3 D.E.J H 12 11 K.M 2 N 3 G. Activity AA (baking in oven) takes 55 minutes. so he proceeded with the task at hand. He listed down possible options relative to the operations strategy which Orient might pursue in expanding the banana bread business. GUIDE QUESTIONS: 1. Orient produces banana bread six hours daily. It was just a matter of time when he will be asked to present his recommendation to his mother and two aunts. transferring to racks and letting these cool Putting in labelled boxes For large-sized banana bread. Weighing Possible Operations Strategies Ian Lee sat down in front of his laptop an hour after midnight on March 16. He knew it was going to take a few days before he completed his evaluation of alternatives. . Is the proposed centralized commissary plan a better operations strategy than the current one? Justify. 2012 and started organizing his thoughts. he noted down that profit per banana bread recipe is estimated at Php 90 to Php 100. seven days a week.ACTIVITY CODE AA BB CC DESCRIPTION OF WORK ELEMENTS PREDECESSOR ACTIVITY TIME ESTIMATE (MINUTES) Z 45 AA BB 35 6 Baking in oven Taking pan out of oven. As he typed the possible options. A recipe for banana bread produces either three large-sized banana bread loaves or eight small-sized banana bread loaves. Is there a better alternative to the current outsourcing and centralized commissary plan? 3. Identify and evaluate other possible courses of action besides the current outsourcing and centralized commissary options.The Original Buko Pie Bakeshop relative to its banana bread product line.2. Propose the best operations strategy for Orient . . Baking Oven Used by Orient – The Original Buko Pie Bakeshop .APPENDIX A Exhibit 1.
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