Cooking up a Profit

By Ron Pereira Published on August 8th, 2007

No, this post is not about corporate fraud or funny accounting.  Instead it is about a neat story I just read in the Columbus Dispatch (Go Bucks, beat scUM). 

The article is about Kahiki Foods, one of the largest Asian-frozen-food manufacturers in America.  They were struggling to turn a profit and decided to make some changes.

Kahiki has simplified operations and implemented cost-savings programs, adjustments that began before the company recently changed ownership. The company was acquired and taken private in May by Abarta Inc. of Pittsburgh, allowing it to eliminate costs associated with being a publicly held company, such as retaining lawyers and auditors.

Interesting but there is more.

Kahiki, which employs 153 people, also began using so-called lean manufacturing techniques that emphasize reducing waste and tightening production. For example, Kahiki used to manufacture its products, then sell them. Now, that process has been reversed — selling before manufacturing. “It really was a radical shift in mind-set,” Tsao said.

I love that… they now sell and then produce the product. Sounds so logical yet is one of the most counter intuitive principles producers of any product face when moving towards a lean way of life.

The article touched on some of the success they have enjoyed since making these changes.

Kahiki, with $30 million in annual sales, has decreased production costs by 3.5 percent. The company also has been winning new accounts, including 20 in the past year.

It sounds like this company is on the right track. I wish them much luck!

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