Systems And Operations Management

Part 010- Group Presentation & Case Study
 
Blackberry Hill Farm
 
“Six years ago I had never heard of agri-tourism. As far as I was concerned, I had inherited the farm and I would be a farmer all my life.”(Jim Walker, Blackberry Hill Farm)
 
The ‘agri-tourism’ that Jim was referring to is ‘a commercial enterprise at a working farm, or other agricultural centre, conducted for the enjoyment of visitors that generates supplemental income for the owner’. “Farming has become a tough business,” says Jim. “Low world prices, a reduction in subsidies, and increasingly uncertain weather patterns have made it a far more risky business than when I first inherited the farm. Yet, because of our move into the tourist trade we are flourishing. Also… I’ve never had so much fun in my life”. But, Jim warns, agri-tourism isn’t for everyone. “You have to think carefully. Do you really want to do it? What kind of lifestyle do you want? How open-minded are you to new ideas? How business-minded are you? Are you willing to put a lot of effort into marketing your business? Above all, do you like working with people? If you’d rather be around cows than people, it isn’t the business for you.”
History
Blackberry Hill Farm was a 200-hectare mixed farm in the south of England when Jim and Mandy Walker inherited it fifteen years ago. It was primarily a cereal-growing operation with a small dairy herd, some fruit and vegetable growing and mixed woodland that was protected by local preservation laws. Six years ago it had become evident to Jim and Mandy that they might have to rethink how the farm was being managed. “We first started a pick-your-own (PYO) operation because our farm is close to several large centres of population. Also the quantities of fruit and vegetables that we were producing were not large enough to interest the commercial buyers. Entering the PYO market was a reasonable success and in spite of making some early mistakes, it turned our fruit and vegetable growing operation from making a small loss to making a small profit. Most importantly, it gave us some experience of how to deal with customers face-to-face and of how to cope with unpredictable demand. The biggest variable in PYO sales is weather. Most business occurs at the weekends between late spring and early autumn. If rain keeps customers away during part of those weekends, nearly all sales have to occur in just a few days.”
 
Within a year of opening up the PYO operation, Jim and Mandy had decided to reduce the area devoted to cereals and increase their fruit and vegetable growing capability. At the same time they organised a petting zoo that allowed children to mix with, feed and touch various animals.
 
“We already had our own cattle and poultry but we extended the area and brought in pigs and goats. Later we also introduced some rabbits, ponies and donkeys, and even a small bee-keeping operation.” At the same time, the farm started building up its collection of ‘farm heritage’ exhibits. These were static displays of old farm implements and ‘recreations’ of farming processes together with information displays. This had always been a personal interest of Jim’s and it allowed him to convert two existing farm outbuildings to create a ‘Museum of Farming Heritage’.
The year after, they introduced tractor rides for visitors around the whole farm and extended the petting zoo and farming tradition exhibits further. But the most significant investment was in the ‘Preserving Kitchen’. “We had been looking for some way of using the surplus fruits and vegetable that we occasionally accumulated and also for some kind of products that we could sell in a farm shop. We started the Preserving Kitchen to make jams and fruit, vegetables and sauces preserved in jars. The venture was an immediate success. We started making just 50 kilograms of preserves a week; within three months that had grown 300 kilograms a week and we are now producing around 1,000 kilogrammes a week, all under the ‘Blackberry Hill Farm’ label.” The following year, the preserving kitchen was extended and a viewing area added. “It was a great attraction from the beginning,” says Mandy, “We employed ladies from the local village to make the preserves. They are all extrovert characters, so when we asked them to dress up in traditional ‘farmers’ wives’ type clothing they were happy to do it. The visitors love it, especially the good-natured repartee with our ladies. The ladies also enjoy giving informal history lessons when we get school parties visiting us.”
 
Within the last two years, the farm had further extended its preserving kitchen, farm shop, exhibits and petting zoo. It had also introduced a small adventure playground for the children, a café serving drinks and its own produce, a picnic area and a small bakery. The bakery was also open to be viewed by customers and staffed by bakers in traditional dress. “It’s a nice little visitor attraction,” says Mandy, “and it gives us another opportunity to squeeze more value out of our own products.” Table 11.3 (a) shows last year’s visitor numbers; table 11.3 (b) shows the farm’s opening times.
 
Table 11.3 (a) Number of visitors last year

Month
Total visitors

January
1,006

February
971

March
2,874

April
6,622

May
8,905

June
12,304

July
14,484

August
15,023

September
12,938

October
6,687

November
2,505

December
3,777

Total
88,096

Average
7,341.33

Table 11.3 (b) Farm opening times*
January–Mid-March-Wednesday–Sunday10.00–16.00
Mid-March–May-Tuesday–Sunday9.00–18.00
May–September-All week8.30–19.00
October–November-Tuesday–Sunday10.00–16.00
December-Tuesday–Sunday9.00–18.00
 
*Special Evening events Easter, summer weekends and Christmas
Demand
The number of visitors to the farm was extremely seasonal. From a low point in January and February, when most people just visited the farm shop, the spring and summer months could be very busy, especially on public holidays. The previous year, Mandy had tracked the number of visitors arriving at the farm each day. “It is easy to record the number of people visiting the farm attractions, because they pay the entrance charge. What we had not done before is include the people who just visited the farm shop and bakery that can be accessed both from within the farm and from the car park. We estimate that the number of people visiting the shop but not the farm ranges from 74 per cent in February down to around 15 per cent in August.” Figure 11.17 shows the number of visitors in the previous year’s August. “What our figures do not include are those people who visit the shop but don’t buy anything. This is unlikely to be a large number.”
 
Mandy had also estimated the average stay at the farm and/or farm shop. She reckoned that in winter time the average stay was 45 minutes, but in August it climbed to 3.1 hours.
 
(Figure 11.17 and 11.18 around here)
Figure 11.17 Daily numbers of visitors in August last year.
Figure 11.18 Visitor arrivals, public holiday in August and a Wednesday in February
Current issues
Both Jim and Mandy agreed that their lives had fundamentally changed over the last few years. Income from visitors and from the Blackberry Hill brand of preserves now accounted for 70 per cent of the farm’s revenue. More importantly, the whole enterprise was significantly more profitable than it had ever been. Nevertheless, the farm faced a number of issues.
The first was the balance between its different activities. Jim was particularly concerned that the business remained a genuine farm. “When you look at the revenue per hectare, visitor and production activities bring in far more revenue than conventional agricultural activities. However, if we push the agri-tourism too far we become no better than a theme park. We represent something more than this to our visitors. They come to us partly because of what we represent as well as what we actually do. I am not sure that we would want to grow much more. Anyway, more visitors would mean that we would have to extend the car park. That would be expensive, and although it would be necessary, it does not directly bring in any more revenue. There are already parking problems during peak period and we have had complaints from the police that our visitors park inappropriately on local roads.”
“There is also the problem of complexity. Every time we introduce a new attraction, the whole business gets that little bit more complex to manage. Although we enjoy it tremendously, both Mandy and I are spreading ourselves thinly over an ever-widening range of activities. Mandy was also concerned over this. “I’m starting to feel that my time is being taken up in managing the day-to-day problems of the business. This does not leave time either for thinking about the overall direction in which we should be going, or spending time talking with the staff. That is why we both see this coming year as a time for consolidation and for smoothing out the day-to-day problems of managing the business, particularly the queuing, which is getting excessive at busy times. That is why this year we are limiting ourselves to just one new venture for the business.”
 
Staff management was also a concern for Mandy. The business had grown to over 80 (almost all part-time and seasonal) employees. “We have become a significant employer in the area. Most of our employees are still local people working part-time for extra income but we are also now employing 20 students during the summer period and, last year, eight agricultural students from Eastern Europe. But now, labour is short in this part of the country and it is becoming more difficult to attract local people, especially to produce Blackberry Hill Farm Preserves. Half of the Preserving Kitchen staff work all year, with the other employed during the summer and autumn periods. But most of them would prefer guaranteed employment throughout the year.”
Table 11.4 gives more details of some of the issues of managing the facilities at the farm, and table 11.5 shows the preserve demand and production for the previous year.
 
Table 11.4 The farm’s main facilities and some of the issues concerned with managing them
 

Facility
 

Issues

Car park
85 car parking spaces, 4 x 40-seater tour bus spaces

Fixed exhibits, etc.
Recreation of old farmhouse kitchen, recreation of barnyard, old-fashioned milking parlour, various small exhibits on farming past and present, adventure playground, ice-cream and snack stands

Most exhibits in, or adjacent to the farm museum.
At peak times, helpers dressed in period costume entertain visitors.
Feedback indicates that customers find exhibits more interesting than they thought they would.
Visitors’ being free to look when they wish absorbs demand from busy facilities.

Tractor rides
One tractor towing decorated covered cart with maximum capacity of 30 people, tour takes around 20 minutes on average (including stops). Waits 10 minutes between tours except at peak times when tractor circulates continuously.

Tractor acts both as transport and entertainment. Approximately 60 per cent of visitors stay on for the whole tour; 40 per cent use it as ‘hop-on hop-off’ facility.
Overloaded at peak times, long queues building.
Feedback indicates that it is popular, except for queuing.
Jim is reluctant to invest in further cart and tractor.

Pick-your-own area
Largest single facility on the farm. Use local press, dedicated telephone line (answering machine) and website to communicate availability of fruit and vegetables. Check-out and weighing area next to farm shop, also displays picked produce and preserves etc. for sale.

Very seasonal and weather-dependent, both for supply and demand.
Farm plans for a surplus over visitor demand, uses surplus in preserves.
Six weighing/paying stations at undercover checkout area. Queues develop at peak times. Feedback indicates some dissatisfaction with this.
Can move staff from farm shop to help with checkout in busy periods, but farm shop also tends to be busy at the same time.
Considering using packers at pay stations to speed up the process.

Petting Zoo
Accommodation for smaller animals including sheep and pigs. Large animals (cattle, horses) brought to viewing area daily. Visitors can view all animals and handle/stroke most animals under supervision.

Approximately 50 per cent of visitors view Petting Zoo.
Number of staff in attendance varies between 0 (off-peak) and 5 (peak periods).
The area can get congested during peak periods.
Staff need to be skilled at managing children.

Preserving kitchen
Boiling vats, mixing vats, jar sterilising equipment, etc. Visitor viewing area can hold 15 people comfortably. Average length of stay 7 minutes in off-season, 14 minutes in peak season.
 

Capacity of kitchen is theoretically 4,500 kilograms per month on a 5-day week and 6,000 kilograms on a 7-day week.
In practice, capacity varies with season because of interaction with visitors. Can be as low as 5,000 kilograms on a 7-day week in summer, or up to 5,000 kilograms on a 5-day week in winter.
Shelf-life of products is on average 12 months.
Current storage area can hold 16,000 kilograms.

Bakery
Contains mixing and shaping equipment, commercial oven, cooling racks, display stand, etc. Just installed doughnut-making machine. All pastries contain farm’s preserved fruit.

Starting to become a bottleneck since doughnut-making machine installed; visitors like watching it.
Products also on sale at farm shop adjacent to bakery.
Would be difficult to expand this area because of building constraints.

Farm shop and café
Started by selling farm’s own products exclusively. Now sells a range of products from farms in the region and wider. Started selling frozen menu dishes (lasagne, goulash, etc.) produced off-peak in the preserving kitchen.

The most profitable part of the whole enterprise, Jim and Mandy would like to extend the retailing and café operation.
Shop includes area for cooking displays, cake decoration, fruit dipping (in chocolate), etc.
Some congestion in shop at peak times but little visitor dissatisfaction.
More significant queuing for café in peak periods.
Considering allowing customers to place orders before they tour the farm’s facilities and collect their purchases later.
Retailing more profitable per square metre than café.

 
Table 11.5 Preserve demand and production (previous year)

Month

Demand
(kg.)

Cumulative demand (kg.)
Production (kg.)
Cumulative product (kg.)
Inventory (kg.)

January
682
682
4,900
4,900
4,218

February
794
1,476
4,620
9,520
8,044

March
1,106
2,582
4,870
14,390
11,808

April
3,444
6.026
5,590
19,980
13,954

May
4,560
10,586
5,840
25,820
15,234

June
6,014
16,600
5,730
31,550
14,950

July
9,870
26,470
5,710
37,260
10,790

August
13,616
40,086
5,910
43,170
3,084

September
5,040
45,126
5,730
48,900
3,774

October
1,993
47,119
1,570*
50,470
3,351

November
2,652
49,771
2,770*
53,240
3,467

December
6,148
55,919
4,560
57,800
1,881

Average demand
 
4,660

Average inventory
 
7,880

 
 
*Technical problems reduced production level
Where next?
By the ‘consolidation’ and improvement of ‘day-to-day’ activities Jim and Mandy meant that they wanted to increase their revenue, while at the same time reducing the occasional queues that they knew could irritate their visitors, preferably without any significant investment in extra capacity. They also wanted to offer more stable employment to the Preserving Kitchen ‘Ladies’ throughout the year, who would produce at a near constant rate. However, they were not sure if this could be done without storing the products for so long that their shelf life would be seriously affected. There was no problem with the supply of produce to keep production level; less than 2 per cent of the fruit and vegetables that went into the preserves were actually grown on the farm. The remainder were bought at wholesale markets, although this was not generally understood by customers.
 
Of the many ideas being discussed as candidates for the ‘one new venture’ for next year, two were emerging as particularly attractive. Jim liked the idea of developing a maize maze, a type of attraction that had become increasingly popular in Europe and North America in the last five years. It involved planting a field of maize (corn) and, once grown, cutting through a complex serious of paths in the form of a maze. Evidence from other farms indicated that a maze would be extremely attractive to visitors and Jim reckoned that it could account for up to an extra ten thousand visitors during the summer period. Designed as a separate activity with its own admission charge, it would require an investment of around £20,000, but generate more than twice that in admission charges as well as attracting more visitors to the farm itself.
 
Mandy favoured the alterative idea – that of building up their business in organised school visits. “Last year we joined the National Association of Farms for Schools. There advice is that we could easily become one of the top school attractions in this part of England. Educating visitors about farming tradition is already a major part of what we do. And many of our staff have developed the skills to communicate to children exactly what farm life used to be like. We would need to convert and extend one of our existing underused farm outbuildings to make a ‘school room’ and that would cost between and £30,000 and £35,000. And although we would need to discount our admission charge substantially, I think we could break even on the investment within around two years.”
 
Table 11.6 Customer Data Base
 
 
 
 
 
 
 
Part 011 – Assignment

Mark
Learning Outcome

1. Apply relevant models to Blackberry Hill Farm to analyse the current challenges they have in their operations processes and satisfying the customer. This could include: the input-process-output model; the value chain model and business process mapping. Evaluate how they could improve the operations processes; this should promote the database system and other ideas for operations improvement
30%
2

2. Complete a mind map/rich picture to identify and explore the people; management and technology issues at Blackberry Hill Farm. Analyse how to improve the operations and Blackberry Hill Farm considering these issues.
30%
4

3.Specialism Topic
Selectone from the following four options and write 600 word summary topic
Option 1: Describe the role of information systems in careers in accounting/finance, human resources, marketing and operations management, and explain how careers in information systems have been affected by new technologies and outsourcing.
 
Option 2:For an organisation of your choice, write a 600 word short case that summarises how they have strategically harnessed the use of operations and/or information systems. You could consider using Gartner research as a starting point. Gartner are an Anglia Ruskin partner, you can connect to their site from the http://my.anglia.ac.uk- click on “auto-login to Gartner website” from the “Links to Partner Sites” section. You do not have to get your case from there; any suitable source will be fine.
 
Option 3:How much can business intelligence and business analytics help SME’s refine their business strategy? A good starting point is Chapter 10 Improving Decision Making and Managing Knowledge.
 
Option 4:The acronym Mint is no longer just a peppermint sweet; it is now also an investment acronym which in the next decade or two could prove extremely profitable for investors. The concept, which groups the countries of Mexico, Indonesia, Nigeria and Turkey, has been popularised by respected economist Jim O’Neill, the man who also coined the BRIC term in 2001. Discuss how the MINT countries can become the next global economic powerhouses.

30%
1

4. Academic Rigour
Your assignment should be written in good business English and be well structured and presented. Your assignment should clearly include the academic insight, i.e. the concepts and the supporting references involved, indicated in the assignment and listed in the references and bibliography

10%
N/A

TOTAL MARKS
100%

 
All coursework assignments and other forms of assessment must be submitted by the published deadline which is detailed above. It is your responsibility to know when work is due to be submitted – ignorance of the deadline date will not be accepted as a reason for late or non-submission.
 
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