A Case Study That Refelcets on the Inception and Growth of Jelly Belly.

change integrity paunch, Case Study Jorge Nolasco and Jason Ilarraza Operations and Supply ambit Management Naval Postgraduate School February 28, 2013 This Case study is based on jelly tum and the actions take outn by the founder, to grow the Company, and loose the company to Goelitz Inc. The focus of the case study will c everywhere up Jelly Bellys strategy and sustain powerfulness, strategy and capability management, and sales and operational planning. At 18 David Klein was in pedigree line selling popcorn with his uncle while attending UCLA. He worked his way through law school by selling popcorn.David decided non take the bar exam precisely pursue a life history he was captivated by, making and selling candy. David Kline a quirky and creative candy maker has invented all over 450 types of candy. His most famous candy was Jelly Belly. David first opened and operated a wholesale nut and raisin business and attained experience and a reputation in the Los Angelos Area with local distributors of nuts, raisins, and candies. While operating and maintaining the wholesale nut and raisin business, David developed a gourmet jelly bean, he coined Jelly Belly.Jelly Bellys militant dimension was quality. Davids vision was to create a lofty-end jelly bean, with a premium quality, flavor, and a queer shape. David created the original 8 flavors in 1975. David approached Herman Goelitz, president of the Goelitz Candy Inc. , a generational candy business, founded in 1869, primarily known for fine candy corn, with a business proposal for product of the Jelly Belly. Mr. Goelitz began business with David and began the production of the 8 flavors David had created in 1976. The first flavors were Very Cherry, Tangerine,Lemon, Green Apple, Grape Jelly, Licorice, Root Beer, and Cream Soda. David was familiar with the thriving main stream marketing strategies of McDonalds and Burger King. He created the Jelly Belly logo, in bright yellow and red. currently after, David acquired a space in a store front operation. He wanted a emerge to sell, where publicity could be generated, that was bright and cheerful. He attained a space in the ice run down parlor with $800. He placed a stand in the corner of the parlor. The product was appealing withal it did not sell the legal injury for the jelly beans was outrageous.The candy industry was late in getting price increases, the candy industry was locked into low end prices. Afraid to make better candy because distributors would not grease ones palms on the basis that customers did not want to pay more for a quality candy but expected to pay a low price for candy. Total sales for the first seven-day period was $44. David called the associated run and invited the conjure to his store front in the parlor, and created a set up to demonstrate to the press that he was doing well with the Jelly Belly business and to expose the press to the taste and quality of the Jelly Belly.The press report declared J elly Belly to be the new candy craze. David continued with the momentum he had received from the press conference. David appeared on TV shows, radio shows and phone gilds were directed to the ice cream parlor. Pres. Ronald Reagan, sampled Jelly Bellys and loved them. He consecrateed 60 cases monthly. Local distributors began to sell and make a profit from Jelly Belly. $5 would ship 2lbs anywhere in the US. Soon after he schematic push carts in Holly Wood, Beverly Hills and Century City. The carts were visited by celebrities and this attracted more publicity.The demand for Jelly Belly grew at a very rapid rate after David worked diligently on attaining publicity for Jelly Belly. Goelitz Candy Inc. did not have the resources to support the demand for Jelly Belly. The back log for Jelly Belly grew rapidly compass a climax of over a one year waiting list for delivery. David did not take needed action to plan for and mitigate the risk of having one supplier and logistics failures. Da vid lacked the ability to deal with add on chain coordination risks Jelly Belly was lacking safety stocks, safety lead times, tenfold suppliers or switch over suppliers.Goelitz Candy Inc. was Jelly Bellys, sole manufacturer. David was uneffective to determine the overall capacity level of capital intensive resources that best supported the Co. s long term competitive strategy. Jelly Bellies were produced in the Goelitz Plant, the PWP concept was utilized. Goelitz lacked capacity flexibility. Goelitz was unable to increase production of the Jelly Belly, they were unable to shift production capacity quickly equal from other products to the Jelly Belly products.Operational Effectiveness at the candy plant and for Jelly Belly were despicable either stakeholder did not have control initiatives or planning and control systems that could mitigate meeting the high demand. The leadership of Goelitz The high quality of the Jelly Belly was a trade off to low Inc. st. The order winning cr iterion for Jelly Belly was quality the order qualifier was the 25 distinct flavors and colors. Herman Goelitz Inc. confident(p) David Klein that 200 hundred employees relied on his decision to sell JB to the Goelitz Candy Inc. David lacked legal representation at the meeting.David exchange Jelly Belly trademark for 4. 8 million to Goelitz Candy Inc.. The 4. 8 million was paid over 20 years, 20,000 monthly. Had David not accepted the deal by Goelitz Candy Inc.. , Goelitz had immediate plans to stop producing Jelly Belly for David and anticipated David running out of money attempting to fight Goelitz in court. If the David would have negotiated to forestall his existing royal line agreement the deal would have been worth several hundred million since 1980. LL ? Supply Chain Risks were not identified or mitigated by David Kline Jelly Belly had one sole producer, Goelitz Candy Inc. David lacked the ability to deal with supply chain coordination risks Jelly Belly was lacking safety s tocks, safety lead times, multiple suppliers or alternate suppliers. ? David lacked legal representation during negotiations with Goelitz Candy Inc. ? ? Goelitz was unable to increase production of Jelly Bellies, they were unable to shift production capacity quickly enough from other products to the Jelly Belly products. ? Subcontracting and outsourcing could have been a part of the Production Planning Strategies on the part of David and the Goelitz Candy Inc. Jelly Belly continues to grow and pull in new flavors. Currently there are 102 flavors. ? Its competitive dimension still focuses on quality/ order qualifier is the variety of flavors. ? Production / 100,000 pounds per day, or 1,250,000 beans an hour. ? Employee loyalty is the most important influence behind Goelitzs Inc. record-setting production. ? Jelly Belly has become more automated, and has also expanded. Increased sales have allowed Goelitz Inc. to buy new equipment and keep all employees busy. ? Jelly Belly accounts f or 70% of the Goelitz Candy Inc. sales, over $200 million in 2008. ?