Management of Inventories and Assets of Covent Garden Restaurant - Case Study Example

Operation Management Contents Operation Management Contents 2 Introduction 3 Management of inventories and assets of Covent Garden Restaurant 3 Components of asset tracking and inventory management 4 Importance of supply chain management to Covent Garden restaurant 5 How the Lean approach could be utilized in Covent Garden restaurant 8 Key to effective implementation of Lean approaches 10 Conclusions and recommendations 10 References 11 Introduction According to A (2013), Operational management (OM) is a field of management that is concerned with designing, overseeing and controlling production process as restructuring the business operations during the production of goods and services. It ensures that the business transactions are managed efficiently by using the limited resources to meet the customer demands. Operational management mainly focuses on the sensitive management of interior business practices for the production and distribution of products and services. Several organizations, more so, the small organizations, have never attempted to mention the term “operations management," but they operate mostly in the same field of ‘operations management. The activities carried out in the operations management are creation of products, development and distribution. Other OM activities are management of purchases, inventory control, logistics, quality control and evaluations. However, most of the service industries have different operation management activities as those other industries (Mahadevan, 2011). Nevertheless, operational management is still necessary for all the companies. The main focus of the OM is to increase efficiency and effectiveness of the organizational processes. Eventually, the nature of the products and services of the organization depends on the operations management practices. Like any other service industry, BROWNS COVENT GARDEN is one of the branches of the Browns group that has managed its operations with the guidelines of the operation management strategies. Since its inception in the early 1970s, it has been one of the booming restaurants within and outside the country. It is located on the 82-84 St Martins Lane, Covent Garden- London WC2N 4AG, with easy accessibility. Although there are other branches, they have same operational management systems. Management of inventories and assets of Covent Garden Restaurant Covent restaurant has done extensive research to manage and control its assets and inventories effectively. The organization has several assets to control at any given time. Being a large organization, it is not easy to manage all the internal processes effectively if there are no operational management activities put in place. Nevertheless, the restaurant Covent Garden has embraced technology to ease management activities. These management tools have assisted the restaurant to follow the lifecycle of all the assets, track their localities with the aim of ensuring that they are not stolen, misplaced or defected (Slack , et al., 2010). This restaurant has used both Radio Frequency Identification (RFID) and barcode technologies to accomplish inventory and asset management. As the organization brings its inventories into the store, it is concerned with a particular place the item has been kept, how it is distributed to various customers, means of tracking disposed items and the time to replenish the inventory (Patton , et al., 2011). For easy management, the organization has automated both asset and inventory management for efficiency. Most of the assets have detective devices mounted on them. In vehicles, for instance, the detective devices are fixed in the engines or other places. These devices enable the management department to track the location of the vehicle using the RFID easily. This implies that the organization can account for the vehicles at any given time by scanning. Furthermore, all the inventories have back code stickers fixed as labels. These stickers can are integrated with IT software so that they should be cleared first before they are released. Components of asset tracking and inventory management The restaurant has installed the following management tools for easy managing assets and inventories. These devices are technology based. Barcoding Scanners— the hotel has automated scanners for scanning workers’ identity cards and inventories. The data are stored in the restaurant’s database. At any given time, the managers can oversee the operation of the restaurant. Mobile computers—these devices scan both 1D and 2D barcodes plus the most common QR code. These computers leverage both local Wi-Fi networks and carrier-based services for exterior communication. Radio Frequency and Identification (RFID) RFID Tags—they store information that detects the inventory or asset item to which they are attached. They are used to communicate with an RFID reader as well as tracking the movement of assets and inventories throughout the environment. RFID Readers—these are antennas using radio waves to collect data from the RFID tags within a given range of the antenna. As opposed to barcode scanners, an RFID readers do no need line of sight so as to communicate with the RFID tag. They are mainly used to monitor the customers. Software For both RFID and barcode scanning technologies, software is used to facilitate inventory and asset tracking on several features, including asset serial number and type, and to provide detailed reporting. Importance of supply chain management to Covent Garden restaurant According to the theory of constraints (TOC) of operational management, organizations should put more emphasis on the independent and cross-functional nature of the internal processes of the organization by viewing the entire organization a network of chains or related functions, processes or even departments (Bamford & Forrester, 2010). Although operational activities are the Covent Garden are independent, they should be evaluated from the onset of every stage to the final distribution. This suggests that the organization should make use of proper supply chain practices to avoid straining the restaurant’s resources. By definition, the constraint is any organizational malpractice that limits the effective operation of the organization. Poor supply chain management practices inhibit proper organizational management and render restaurant’s services useless (Peter & Peter, 2012). The main importance of supply chain management practices in the restaurant is mainly to get the products and services to its customers as fast as possible and maximize the sales. When customers get what they need at the right time, they feel satisfy and come promptly. For the hospitality industry, quick customer service attracts several customers to use the organization products and services. In essence, supply chain plays an important role to play in ensuring that products and services move faster to the designed destinations (Michael, 2003). Not only does the restaurant enjoy quick customer service but also make prompt orders that do not limit the organizational performance. The restaurant is flooded with customers from various parts of the world with different likes and dislikes .for instance, several customers prefer Fresh Lobster than Côte de Bœuf. The restaurant has to make more orders for the Fresh Lobsters than Côte de Bœuf avoid wastage of resources. Furthermore, the fast moving products and services should have high inventories than slow moving goods. This helps the organization offer effective services (A, 2013). Covent restaurant has been able to moderate all these customer demands by the help of supply chain management. Furthermore, Covent Garden restaurant has increasingly remained competitive in the market due to reliance on effective supply chain management practices. In the new management paradigms, the concept of supply chain management has extended boundaries outside Browns Restaurants and seek other networks with other hospitality industries. In the last few years, the use technology has enabled the organization to work collaboratively with other branches with the focus of boosting the performance. The complex interactive supply chains have been made easier by the help of supply chain management practices (Peter & Peter, 2012). This is because these complex practices are broken down into simple supply chain structures that are manageable. With regards to the theory of constraints, the restaurant has cut down production costs drastically. The movement of raw materials and finished from one level to the other within the organization has been regulated. The process has been moderated and streamlined to accommodate all levels without interfering with the operation. In that connection, the restaurant has minimized managerial control of routine logistic operations. As a result of supply chain management, the restaurant has built collaboration and trust among its supply chain partners, improve its inventory visibility and the speed of inventory movement (Lambert, 2008). The diagram below shows how Covent Garden restaurant manages its supply chain practices. Every stage in the supply chain process has a role to play. As by the definition, supply chain is the system of activities that are involved directly or indirectly to the movement of goods and services from the supplier to the consumer (Lambert, 2008). Every stage has a duty to effect its operation for the next stage to succeed. Effective performance of the supply chain will result in a good performance. However, failure of one stage may influence the outcome of the preceding stages and ultimately affect the organizational performance. For instance, failure of the suppliers to deliver the products/services will render all the other layers ineffective and the demands of the final consumer will not be met. However, some stages have more consequences if they are not properly aligned and may ruin the vision of the organization. This stage is the internal supply chain processes. The relationship between the consumers and the supplier depends on the internal supplier processes. These processes are the purchasing, production, and distribution. At this level, the business has to make concrete organizational management decisions to achieve its objectives. The theory of operational constraints suggests that the organization should address its issues to attain its goals by adopting effective transformational processes (Mahadevan, 2011). These processes are technology selection, personnel selection, and supply and distribution. These processes should be acknowledged to support the business products and strategies. The reality at this stage is that there is rampant competition between different suppliers who want to deliver the products to the organization. Therefore, there is need for cooperation and understanding among the decision makers to harmonize the required variables. The decision makers, on the other hand, should focus at achieving the set goals and maximize the profits. The management of this stage calls for special attention for all the levels. Failure to cooperate with other related departments results in constraints and complications of the management of the entire organization. In fact, this is the stage that identifies the organization’s constraints, make decisions on how to exploit fully the constraint and subordinate the organization’s decision process (Shah, 2009). Secondly, this is the level that introduces the idea of logical product structure (LPS) of each product/product category to be supplied. LPS is an integration of product bill and routing and determines how the products move from various levels to the final customer. It identifies the operations to be performed on the products to avoid wastage or misuse. As a surety of trust, the level ensures that the total quality management (TQM) is maintained. From the word go, operational management practices are aimed at promoting organizational performance (A, 2013). All the management levels should strive to ensure that they increase the production of the organization. Therefore, should Covent Garden limit the operations of international supply chain, the outcome from the process will distract customers. How the Lean approach could be utilized in Covent Garden restaurant Lean is an advancement approach of improving the flow of production while reducing wastage. This approach is aimed at getting things done at the right place and time, right quantities while reducing waste. This approach also focuses on customer values i.e. any activity that is valueless is regarded as a waste. This implies that if the wastes are got rid of, the customer enjoys the best service. For instance, the meals the customers likes least or do not like at all are regarded as wastes. All organizations should embrace the Lean transformation to enable them move from just understanding the tools to understanding the system itself by aligning all the operations strategically. This strategic alignment process focuses on aligning the pathways or the workflows that are interdependent. However, hospitality stages are very simple to follow as the customers do not need many processes to follow to be served. Essentially, Lean thinking concentrates on the elimination of wastes (obstacles) that hamper continuous flow of processes (Lambert, 2008). The Lean way to suggest values is not whether the or not the customers are in a position for extra services (Basu, 2011). In Covent Garden restaurant, clean dining is customers’ treasure and they value very much. Alongside the cleaning and preparing process of restaurant, other steps may occur that the customer may see as more valuable. For the restaurant to attract more customers, it means that they need not only to offer quality meals but also maintaining high cleanliness. It is the Lean’s goal to get rid of “irrelevant” steps that the customers are not in a position to pay for while they can be done away with during the course with little effect on the outcome (Basu, 2011). To accomplish this, it is wise to determine whether the steps are customer-value add, non-value add or value add. From these processes, customer-value add and value add cannot be eradicated. Therefore, cost saving in Covent Garden using the Lean approach can be achieved by removing the non-value added stages by using value stream map as the most suitable tool. Value stream maps refer to the visual layout of the step by step process. The restaurant can do in groups of a similar process. After identifying and getting rid of the wasteful non-value added steps, the restaurant can concentrate on providing more customer value-added products. On the other hand, the Lean approach also provides the fundamental principle of organizing the workplace decently. Organizing is the general arrangement of the facilities and minimizing clutter or unnecessary items littering within the compound. The premises should be kept tidy and organized to appeal the customers’ eyes. The physical organization has several benefits; including giving the environment a professional look. Organized environment also facilitates navigation enabling spacious customer service. To accomplish this, the 5s Lean tool can be used. According to Basu (2011), these are Sort, Shine, Straighten, Sustain and Standardize. In the first phase-sort, for instance, the restaurant is organized by keeping aside those items that are not mostly used. For instance, the supply chain closet within the restaurant with broken doors and brooms may be disposed of to create space for other items. In another phase, say straighten, restaurant items are kept in order in one place, well arranged where they are accessed easily. On the other hand, items that are commonly used or referred most frequently are staged in strategic positions that are easily accessed (Lambert, 2008). The next phase-shine entails keeping the environment tidy and creating an easy cleaning arena. Cleanliness in the restaurant cannot be avoided. Customers are sensitive to the presentation of the environment. In fact, appetite for food is closely linked to the prevailing environment. The cleaner the area, the more the customers enjoying the meals. The standardize phase ensures that all the work done previously is maintained at commendable levels. There may be a tendency for laxity when the standards have been achieved, but standardization phase ensures it is maintained. Lastly, the sustain phase ensures that all the workers are making use of the available workspace and are following the required rules (Mahadevan, 2011). Key to effective implementation of Lean approaches Although Lean is universally recognized to be a successful driving tool to efficacy, there are no substantial frameworks for effective implementation. One way is putting up infrastructures of trained employees who are committed to implementing the program and philosophies. Management of the organization depends on the commitment of the personnel working collaboratively towards the achievement of the set targets. For successful implementation, the Lean approach should be regarded as a stand-alone project by the restaurant but is a complementary of working hand in hand with the employees in their daily routine. Workers should, therefore, be trained and empowered of their roles, principles and expectations. Conclusions and recommendations Having all said and done, organizational practices require strategic plans put in place for effective operations. Operational managers are mandated to foresee the daily activities of their organizations to ensure smooth operation. Effective operational management brings desired results when positively perceived. Covent Garden restaurant is one of the organizations that have embraced effective operational processes. Although it has not achieved a full portion of the process, its plans are underway. Since the adoption of technology, the hospitality industry has gradually managed its operations and expanded the services. It has infrastructures to ensure the flow of production (Lambert, 2008). For instance, the supply chain management has been operationalized by the help of technology. The use of asset tracking and inventory management systems has seen the organization a step ahead of other related industries. However, the organization is still facing big hurdles in trying to implement fully the program. Coordination and management practices may not be favorable to all workers, and thus some do not collaborate. Nevertheless, the organization has room for improvement. The industry can train its workers on their roles and importance of operational management practices. This will enlighten them and improve their work skills. Lastly, the organization could offer rewards to outstanding performance for all the workers showing steady performance. This will motivate them and inspire them to work even better. References A, G., 2013. Operations Management. 3rd ed. s.l.: John Wiley. Bamford, D. R. & Forrester, P. L., 2010. Essential guide to Operations Management: concepts and case notes. s.l.:John Wiley. Basu, R., 2011. Fit Sigma: A Lean Approach to Building Sustainable Quality Beyond Six Sigma. s.l.:John Wiley & Sons. Johnston , R., Clark, G. & Schulver, M., 2012. Service Operations Management Improving Service Delivery. 4th ed. s.l.: Pearson. Lambert, D., 2008. Supply Chain Management: Processes, Partnerships, Performance. NY: Supply Chain Management Inst. Mahadevan, B., 2011. Operations Management: Theory and Practice. s.l.:Pearson Education India. Michael, L. N. S., 2003. Operations Management: Critical Perspectives on Business and Management, Volume 4. London: Taylor & Francis. Patton , S., Clegg , B., Hsuan , J. & Pilkington, A., 2011. Operations Management. s.l.:McGraw Hill. Peter, J. & Peter, R., 2012. Operations Management. Oxford University : Oxford University Press. Shah, J., 2009. Supply Chain Management: Text and Cases. NY: Pearson Education India. Slack , N., Chambers , S. & Johnston , R., 2010. Operations Management. 6th ed. s.l.:Financial Times/Prentice Hall. Read More