CARMEN’S BESTGOES GLOBAL

A C a s e A n a l y s i s i n O p e r a t i o n s M a n a g e m e n t

Aviles, J.G.Leynes, V.O.Mortel, P.A.Ras, K.F.Tolentino, M.Y.

Point of ViewPaco Magsaysay• Marketing degree at University of

St. Thomas, Houston

• Master degree in Entrepreneurship, Asian Institute of Management

• Short course in Ice Cream Making, Pennsylvania State University

• Most Promising Award, Pennsylvania State University

Case Facts

• Established October, 2009 by Fancisco Magsaysay

• Name after Carmen, Magsaysay’s daughter

• Produces artisanal ice cream made of finest quality ingredients

• Priced P370 per pint, P420 per pint for fancier flavors

About Carmen’s Best

Case Facts

• Initial production at Magsaysay’s residence in Ayala Alabang Village

• First flavors were chocolate, strawberry, and vanilla

• Used single serving gelato machine

• Started selling at AAV in 2011

• Decided to widen market by selling at Salcedo Market in Makati and QC

Early Years of Operation

Case Facts

• Started supplying groceries and restaurants

• Established a management team with food scientist, finance manager, and logistics consultant

• Has 10 major suppliers, RFDFA supplying 20% of total production

• Two production teams, 10 workers each. One works from 6 am to 2 pm everyday. The other works from 12 pm to 8 pm everyday

• Ice cream produced today are delivered the next day

Third Year of Operation

Case Facts

• New schedule was implemented. Two teams work from 7 am to 3 pm. First team, TThS. The other team, MWF.

• Freezing time reduced, 30% of client orders were in danger of missing delivery

• Some employees started working overtime

• Local demand continues to grow to the point that kitchen production is becoming insufficient

Current Challenges

Case Facts

• Declined moving near Cash and Carry Supermarket, Makati, because they may need to move again

• December 2014, FDA Permit

• Getting PEZA accreditation

• Eyeing exporting to Taiwan, HK, and Singapore

• Additional orders in the metropolis becoming a challenge

• Needs to produce 20,400 pints to meet export volume requirements

Current Challenges

Case Problem

How will Magsaysay improve the production capacity of Carmen’s Best in order to meet its increasing local

demand and prepare for its entry in the ASEAN market?

In-depth Analysis

Supply Chain of Carmen’s Best Ice Creams

Current Issues in Production Capacity• Problems encounter originated within the

organization since there were no problems stated concerning suppliers or distributors

• Changes in operation schedules tightened the production output

• From a fast and continuous production, operation shifted to alternating days of processing

• To satisfy extra orders, workers sometimes had to work overtime

• Carmen’s Best needs to increase production and storage capacity to fulfill the growing demand in the local market

• Carmen’s Best needs to increase output to meet export quantity required

Accreditations and Export Certifications• FDA Certification was obtained on 2014 as a proof of quality and

safety of their products

• Accreditation by Philippine Economic Zone Authority (PEZA) is the first step towards entering export market

• Firms must be accredited by PEZA to export to member countries in the ASEAN Economic Community

Operation should be at any PEZA Zone or Tech Parks

PEZA-registered firms must be export oriented Firm must export 100% of production. In some

cases, PEZA allows domestic marketing of up to 30% of production

Other requirements: Project Feasibility Study, Project Brief, Anti-graft Certificate, Board Resolution, SEC Certificate of Registration

Gearing Up for Export• In compliance with PEZA requirements, core operations should move

to Techno-free, Laguna• A larger plant would mean nothing without bigger and more efficient

equipment.• More workers required to operate the larger facility.• Increase in space, equipment capacity, and labor force is expected to

increase productivity.

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Implementation

Continuous Improvement in Production for the Local Market

1

Hiring additional workers Selection and

Screening Trainings

Purchase of equipment

2

Approval of Philippine Economic Zone Authority Accreditation

Legal Preparation 3 Production

Preparation

Moving in to the PEZA-accredited Techno-free Tech Park at Laguna

Initiate production for export

Allot 30% for domestic marketing

Conclusion and Recommendation

Good population of Filipinos in the Southeast Asian countries

High quality product appealing to the middle and high-end market

An established brand

Benefits of the ASEAN Economic Integration in exporting

Paco Magsaysay’s willingness and ability to export

Carmen’s Best Ice Cream can be export-ready.