Monday 29 March 2010

Teaching S3 Business Management using homemade tomato ketchup!

In a previous life before I became a teacher, I used to work as a commis chef in various restaurants. I was actually going to train to be a chef before I decided to head off to University to do my Business degree. However, every now and again I still think I have the knack and so it was on Sunday afternoon, that with the sun shining, I opened the windows to let in the first fresh air of spring and set about making my own tomato ketchup courtesy of one of Jamie Oliver's recipes. This followed on from a successful attempt at making chilli-pepper chutney the previous week.

I headed off to Tescos and came back with the following:
  • 1 large red onion
  • 1/2 bulb of fennel
  • 1 stick of celery
  • Ginger
  • 1/2 fresh red chilli
  • Fresh basil
  • 1kg of red tomatoes
  • Red wine vinegar
I already had the olive oil, garlic, salt, cloves, black pepper and brown sugar that was needed to complete the masterpiece. 3 hours of cooking later and the picture at the top is what I had to show for my efforts. Approximately 350ml of homemade tomato ketchup!

And why do I tell you this.....

Today with my S3 Business Management, I was discussing different methods of production - Job, Batch and Flow. My attempt at homemade tomato ketchup was an obvious example of job production. The raw materials were good quality but expensive, I had to do all the tasks myself which took time and effort but the final product met with my exact requirements. Unfortunately, I don't have my receipt handy but the tomatoes themselves were £2.24. I imagine, everything included (minus my labour costs), the tomato ketchup probably cost me close to £4 to make. Products created by job production are expensive due to the labour intensive, unique aspects of them.

We discussed how much I would need to sell this individual bottle at to make a profit. £5, £6, £7 was shouted out. When asked who would pay that, no one offered and it was pointed out that a bottle of 350g Heinz Tomato Ketchup costs £1 to buy in Tesco.

So, if I decided to use the wonder of the internet and start selling my homemade tomato ketchup or chilli-pepper chutney online, how would I get my costs down to a level which would enable me to sell it at a reasonable price and start to make a profit. My brilliant S3 Business Management class immediately identified the need to make it in enough quantity to be able to buy my raw materials in bulk and thus bring the cost of them down by negotiating a discount with the suppliers.

Top Trivia from Heinz Ketchup website

Did you know that we use enough tomatoes to fill an Olympic-size swimming pool – EVERY day – to make enough tomato ketchup for all our fans?

So we started to look at Batch production - making batches of tomato ketchup using batches of red tomatoes or yellow tomatoes, chilli-pepper chutney using red chillis, green chillis, orange chillis etc.

We then looked at how we could manufacture the tomato ketchup using Flow production with everyone having a specific job, utilising technology to do much of the work e.g. blenders, and how this would enable us to drive down the costs of each individual jar of chilli-pepper chutney or tomato ketchup until we could make a decent profit.

We then used this to discuss the disadvantages of each of these methods - the obvious cost element of the Job Production but also the high initial costs of the machinery for Flow Production and the monotonous jobs of both Batch and Flow Production.

And that is how my Sunday afternoon making home made tomato-ketchup impacted on my S3 Business Management lesson the next day.

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