Hannah’s Donut Shop: A case study of performance, measurement and manufacturing design in a service environment

This article represents a one year case study of Hannah’s Donut Shop, an independent retail and wholesale donut shop, located in Phoenix, Arizona. The shop had shown marginal returns or losses during its first five years of operation. The manufacturing operation most closely resembles a job shop, in which small batches are produced to satisfy customer demand. The case study involves a one year application of the Five Focusing Steps of the Theory of Constraints. Results of this application resulted in sales increases of 62%, operating increases of 485%, and net profit increases of 531%.