Aspects of the Restaurants Business - Research Proposal Example

Operations Management Assignment Table of Contents Part Part Supply Chain Management) Introduction Aspects of the Restaurant's Business Parts of the Supply Chain Alternative Approaches to Supplier Strategy Recommendations in Respect of Two Key Lines of Supply Part 2 (Quality Management) Introduction Importance of Quality Determinants of Quality General Recommendations Ensuring a Quick Service ICT Solutions Ensuring Quality Food Part 1 (Supply Chain Management) Introduction This is a short report for Ms Nok about relevant aspects of supply chain management for her proposed restaurant business. This is both in general for her planned new restaurant and also alternative approaches to supplier strategy, together with recommendations in respect of two lines of supply (perishable food stuffs with short shelf life and foodstuffs with longer shelf life). Aspects of the Restaurant's Business Based on the description of the present situation, the following key points emerge that are relevant to supply chain management: 1. This restaurant is to be situated in the departures area of the new airport. 2. The restaurant needs to be open for 18 hours per day, seven days a week. 3. The restaurant is required to offer a choice of food and drink ranging from quick snacks to a three-course meal with alcoholic drinks. 4. Ms Nok has decided that the restaurant will be divided into two areas, but with the facility to 'move' the dividing line so that at different times of day, space can be concentrated on the busiest section. The waiter service area is normally expected to be substantially the smaller of the two. 5. Customer demand is expected to vary. Although general patterns may emerge, due to the change of time zones, customers are likely to demand a full three course meal at any time of the day or night. However, a restricted menu is proposed at the quiet times. 6. Restaurants do not succeed by having too many menu items unavailable. So, she has to ensure that she has the essential ingredients for the entire menu available at all times. 7. With the advent of the super jumbo type aircraft, there are likely to be unexpected surges in demand. Hence, flexibility will be essential in service from suppliers. Parts of the Supply Chain Our supply chain management analysis, proposals and strategies will deal with the process of effective planning and control of the operations that make up the restaurant's supply chain from the point of origin of the ingredients and other items of restaurant use by the suppliers to the point of consumption of the prepared food by the customers. The supply chain encompasses all the activities, facilities and functions that are involved in producing and delivering the food. For a better analysis of the 7 points listed above, we could divide them into two categories: Supply side, which concerns the restaurant's dealings with its suppliers for acquiring the ingredients for its various food offerings. Demand side, which concerns the restaurant's dealings with its customers from preparation of the food to its actual serving. ACQUISITION (supply side) Purchasing, receiving and storing the ingredients SERVICE (demand side) Cooking and serving the food 6. availability of ingredients (in general) 7. flexibility of promptly obtaining extra supplies 2. opening times 3/5. variety of food 4. restaurant zones The main parts of the supply chain are identified in the chart below. (point or origin of the ingredients) (point of consumption of the food) By identifying these six parts of the supply chain, we can ensure the overall efficiency in the planning and control of the restaurant's operations by analysing the efficiency of each in turn, and implementing strategies, if necessary, to increase efficiency in that particular process. For instance, if we know that the ingredients are taking longer than they should in reaching the restaurant, the time taken could be minimised by using own transportation, changing the means or timing of the transport or looking for alternative suppliers. Knowledge of alternative suppliers would also help in the event of implementing contingency measures due to food shortage, delivery delays or failures etc. Up to date knowledge of relevant food industry information would also be useful for acquiring the ingredients. Alternative Approaches to Supplier Strategy The factor that characterises the need for alternative approaches to supplier strategy, or to put it another way, contingency planning, is uncertainty. It is necessary for there to be good coordination between the different stages of the supply chain so as to reduce this uncertainty as far as possible. Maintaining extra supplies, even controlling some supplies (i.e. maintain own production of the ingredients) under extreme conditions are typical approaches. Apart from this method, strategic approaches could include better sourcing and better procurement. The use of these approaches demonstrates true operational management techniques. If we examine stage two of the supply chain, the efficiency of this process is determined by the distribution of the potential sources of wholesale food suppliers as much as the transportation to the restaurant itself. Furthermore, distribution concerns the type of distribution network, raising questions of how many and from where are supplies able to be sourced. Also, whether it is a shared or privileged distribution, the means of transportations (how the purchases will be delivered), and control of the means of transport (who owns what) etc. Efficiency requires optimum conditions of the above, for instance that a supplier is as close as possible, as well as ideal coordination between all of these so as to minimise the total cost of logistics. A systems approach is therefore useful to plan the logistical activities. And, factors such as availability of information on the food industry and the restaurant's own cash-flow conditions can impact on this. Recommendations in Respect of Two Key Lines of Supply Now, we shall focus on the short (perishable) and long shelf life foodstuffs and offer recommendations for each as two lines of supply. This concerns the third (storage) stage of the supply chain and shows its importance. Long shelf life foodstuffs do not present much of a problem, as they can be stored more easily over longer periods of time. The restaurant should allocate some space for its storage to prevent any eventuality of a shortage. It is the short shelf life foodstuffs that could be a concern because they cannot be stored for long or would require more advanced storage mechanisms. This problem can be dealt with by what's known as the just-in-time (JIT) approach, a Japanese style of management. "JIT represents a philosophy whose objective is the elimination of all sources of waste including unnecessary inventory." (Anderson) Contrary to the technique of storing extra supplies, short shelf life foodstuffs can be ordered as and when needed. Adopting this strategy would require excellent coordination and cooperation between the restaurant and its suppliers. Part 2 (Quality Management) Introduction This is advice for Ms Nok, on the management of quality, in her restaurant operations. Also, recommendation of three tools for quality assessment and two quality management techniques that could be used to ensure very high levels of customer satisfaction based on quality management theories of operations management, including explanation of how to implement the recommended techniques. Importance of Quality Quality is a big concern because as mentioned in the description, some visiting VIPs and senior government officials are likely to use the restaurant and complaints from such customers could reverberate at the highest government levels. Quality is defined as "a quality product or service'that is fit for its intended purpose, and is produced at an acceptable cost." (Barnett 1996) To this we could add a number of other factors, some of which are mentioned in the sections that follow, but in essence, to strive for quality is to strive for giving the customer what he or she wants. This is the purpose of Total Quality Management. Cornell Hotel and Restaurant operate an airport-restaurant in Hong Kong. They state that "by meeting travelers' service-quality expectations, airport restaurants can gain a competitive advantage" (Vincent 2000). However, competitiveness may not be such an important factor because of the proposed location of the restaurant within the confines of an airport and this restaurant is mentioned as the one that is (presumably exclusively) expected to win the contract. This would grant it a monopolistic status, assuming of course that there will be no other restaurants within the compounds of the airport. For now, our focus for quality management will be on the demand side factors of the supply chain i.e. 4 to 6 (from taking an order from a customer to delivering it on the table) because this determine the quality as far as the customer is concerned. Although, it must be stressed that "Companies must add value throughout every single process they are involved in and then translate this into better value for customers." (Crainer 1998) Determinants of Quality There is a need to address such concerns of customers as (in the form of probable questions) 'Will a table be available'', 'Will the whole menu be available'', 'Will we have to wait long'', 'Will the food be tasty'', and 'Will the price be fair'' and so on, besides the impression formed by the looks and attitude of the waiter to some extent. Thus, quality management will require the following: 1. Availability of seating in the restaurant 2. Availability of all menu items at the required times 3. Minimising customer waiting time for delivery of their order from the menu 4. Quality of the food prepared for the customers 5. Having a reasonable scheme of prices The above are all factors that necessitate operations research of the processes involved in order to help the management make better informed and strategic decisions. To summarise the above points, the quality of the restaurant overall as perceived by its customers will therefore largely be based, in sequence, on the provision of seating and menu items, a quick service once the customer's order has been taken, the quality of the actual food eaten, and last but not least, the reasonableness of the price charged. The key factors that impact on quality are now identified in the chart below. To ensure a quality service in terms of high levels of customer satisfaction, the following essential objectives have therefore been identified: 1. Having tables available 2. Having menu items available 3. Giving a fast delivery service 4. Preparing good food 5. Charging a fair price Our focus will be on the third and fourth determinants viz. ensuring delivery of a quick service and the preparation of quality food because these two are considered here as the most important determining factors of a quality service. Quality Management techniques that can be applied in both cases are also suggested. However, a brief discussion of the other determinants follows first. General Recommendations for Quality Management Adjusting the restaurant layout for meeting the first objective has been mentioned in the original description already i.e. by using the divider to allow space for the busiest section thereby creating seating zones. However, a special zone can also be created to reserve tables especially for VIPs when it is known of their arrival. Guaranteeing that menu items are always available when they are supposed to is affected by the availability of the chefs also, but more so on the supply side factors. This requires assessment of actual demand and forecast of anticipated demand, to derive knowledge of peak times and quieter periods of the day and occasions when there are likely to be surges in demand. Records of order fulfilment should be maintained closely. Maintaining some extra supplies is a possibility to prevent the likelihood of menu items ever being unavailable but this will be dependent on the financial circumstances of the restaurant management and the storage facilities. The storage of food was discussed in the section on shelf life of food under supply chain management. The final objective of charging a fair price can only be achieved by specifically maintaining proper financial records of all transactions with the ingredient and equipment suppliers, and monitoring of all other variable costs throughout the supply chain, then making the appropriate decisions so as to minimise the costs as far as is reasonably possible, without of course, compromising with the quality of service in any way. Margins are usually slim for restaurants, so there is a greater need to keep costs and thereby prices under control. Ensuring a Quick Service To analyse this stage of the supply chain in detail, the flow of information and materials during the service process is described in order in the table below from point in time of taking the order to putting the prepared food on the table. This is the service delivery system, which is "the way in which the service concepts and service package are actually delivered to the consumer." (Lamming 2004) Sequence Flow of INFORMATION Flow of MATERIALS 1 2 3 4 5 6 7 8 Anticipation of order upon arrival of customer, past trends and expected demand Order taken by waiter Order received by chef Ingredients required Cooking materials required Cooking method Arranging food Waiter methods of delivery - Written order noted by waiter " Gathering the ingredients Gathering the cooking materials Cooking in progress Presentation of food on plates Taking order over to the customer by the waiter Performance monitoring of the chefs and waiters employed should be conducted so as to identify proficient and exceptional staff on one hand and poorly performing staff on the other. The critical factor operations management is seeking to control here is of course 'time'. The speed of delivery from first recording the food order by the waiter and preparing the food to handing it over to the waiting customer is a time scheduling process involving three groups of people. This process could be examined by diagrammatically representing it on a precedence network. And, queuing theory could be used to analyse the waiting line of customers arriving to eat, the distribution of the chef service time in cooking the food, and the distribution of the waiter service time in delivering to the customer. Efforts could then be directed at reducing the total time taken to provide service to the customer. We could also take examples of other existing restaurants to take a look at the operational methods that they employ and learn from their experiences. As far as speed of service is concerned, McDonalds would be a good model to consider. There is an important difference in that McDonalds is a fast food restaurant, but our concern is only with useful techniques to deliver food to the customer as quickly as possible that could also be used in the setup of our own restaurant. Hamburger University caters to "McDonald's operations training and leadership development" and their philosophy is "to put money in talent" (McDonalds). Their stress on talented individuals shows the importance of having and supporting labour 'assets', the chefs, cooks, waiters, cleaning staff etc. Motivated, hardworking and efficient staff are vital to providing a quality service to customers because they are the people who handle the service process to satisfy the customer. ICT Solutions for Faster Menu Ordering and Preparation The use of information and communication technology is paramount for a modern, quality minded and strategically placed restaurant as Ms Nok's would. The staff are no doubt invaluable, so their replacement is not being advocated, but the use of information technology could prove immensely useful in assisting them by saving their time in certain routine tasks and in providing instant access to important information. The installation of menu ordering terminals is a possibility for customers to place their order conveniently. At the other end, terminals in the kitchen would provide instant information on what has been ordered so that the chefs can start cooking immediately without waiting for the waiter to go and provide this information. Stages 2 and 3 of the flow of information would be drastically improved, stage 2 of the flow of materials would be eliminated altogether, and the customer experience as a whole would be positive. The waiter's role in this case would be to take the food over by hand when ready, besides welcoming the customers and assisting them in using the ordering terminals. Point-of-Sale Software such as Restaurant Manager, OrderTalk, Delphis, Speedline, FishBowl, PatronPath, Raz and BigHoller, including various hand held tools are currently available as ICT solutions for online ordering for restaurants that Ms Nok may wish to consider using. In recent years, many restaurants are utilising such software solutions. As an example, in a cyber caf' in Kent (BBC News 2006), customers order their menus at the touch of a button. This is a way "to beat the queues' the order is then printed out in the kitchen ready for the chefs to prepare." A National Restaurant Association research (NRA) conducted some years ago but a reality now, reported that "Restaurants are finding that computers can make their lives easier in an number of ways... Computers and other advanced technical equipment can perform routine tasks that were once accomplished with paper and pencil and often do so more quickly, more cheaply and more accurately' More operators are also implementing technologies such as point-of-sale (POS) systems, hand-held ordering terminals and seating-management software to meet customers needs... This advanced equipment improves the ability of service staff to present tableservice customers with an accurately totaled check and helps to expedite order placement. Such technology should continue to heighten productivity and service into the coming century." (NRA 1997) Ensuring Quality Food Quality food is food that is clean, healthy and delicious. Ensuring that the restaurant delivers quality food and does so continuously involves issues of effective cooking methods, tastiness of the cooked food, ease of consumption and being hygienically presented and bug free. Deficiencies in any of these would impact very negatively on the image of the restaurant. Therefore regular quality control checks in the preparation and presentation of the food are essential. Operations management techniques would seek means to achieve both acceptable and exceptional quality of food and Operations Management tools would help to bring this about. Quality control checks will maintain the integrity of the cooking process. Not only should this be done regularly but also thoroughly. Customers need the quality assurance that they will get what they paid for if not something even better and even tastier. The checks should be conducted on samples of both the ingredients obtained from suppliers, and the foods prepared for the customers. The checks would be a statistical process and entail the gathering and analysis of data. Quantifying the ingredients is possible but it would not be easy to quantify how delicious the food is or even many other parts of the restaurant service because that is a subjective matter. Unlike in manufacturing industries, quantification of service variables is difficult. However, it must be remembered that "measurement is only part of the overall evaluation of quality' time is an important dimension in measuring quality - speed and reliability of response are measurable and quantifiable." (Lamming 2004) Speed of service has already been covered in detail above. Reliability i.e. managing to reproduce the same food item of the same quality each time is an important determinant of quality as much as the taste of the food so that the customer knows what to expect. The restaurant should strive to set a high quality in the first place and use a process that can be easily repeated as far as possible. Other methods for ensuring food quality could include structuring the cooking process by a division of tasks and performing regular in-house inspections and monitoring of the cooking process altogether. By dividing the cooing process, individual chefs can concentrate on what they are best at rather than one managing the whole process. And, the importance of regular inspections cannot be stressed enough. Inviting for occasional independent inspections can prove very useful too in order to know what official impressions of the restaurant are. Encouraging customer feedback especially from regular customers would make the restaurant acquainted with its very own day-to-day food quality and customer satisfaction. Benchmarking by comparing the food quality with acceptable national as well as international standards, such as those used in the Quality Management System (ISO), would help to ensure that the quality of service never falls below what would be considered to be acceptable levels. This provides the quality assurance that especially nutrition-concerned individuals look for in food. The ISO 22000 standard in particular is relevant to the food industry. Amongst other things, it stipulates that the food safety management system should have the primary characteristic of being "utilisable by all organisations in the food chain" (John) Staying firm to a set menu and cooking procedures once established as producing quality results is good and guarantees the reliability factor of quality, but the restaurant should always strive for quality improvement in its range and quality of food. This entails a transition from a quality level that is considered acceptable to one that is considered exceptional, from satisfied customers to customers very eager to eat at the restaurant. Achieving such a level of quality would make the restaurant more than just favourable. It will become an instant favourite for travellers and VIPs. I wish Ms Nok the best of luck in being granted the award and establishing the restaurant. References Anderson, D. An Introduction to Management Science, Quantitative Approaches to Decision Making, seventh edition 1994. Barnett (1996). Operations Management, second edition, page 42. Macmillan Business Masters. BBC News 2006, 18 October. Available from: http://news.bbc.co.uk/2/low/uk_news/england/kent/6062898.stm [Accessed: 17 September 2008] Crainer, S. (1998) Thinkers that Changed the Management World. London: Pitman. John, G. Surak. Food Quality, Safety & Sanitation. Strengthening the Food Safety Management System Available from: http://www.foodquality.com/mag/10012006_11012006/fq_10012006_SS2.htm [Accessed 16 September 2008.] Lamming, R; Brown, S; Bessant, J; Jones, P. 2004, Strategic Operations Management, second edition. Butterworth Heinemann McDonald's Corporation, Hamburger University. Available from: http://www.mcdonalds.com/corp/career/hamburger_university.html [Accessed 17 September 2008] NRA (1997) Quoted in 'Restaurants Are Putting Technology to Work', Restaurants USA, September 1997 (magazine) issue. Also available online at: http://www.restaurant.org/rusa/magArticle.cfm'ArticleID=570 [Accessed 17 September 2008] Vincent, C; Heung, M.Y; Wong, Hailin Qu (2000) Cornell Hotel and Restaurant Administration Quarterly, Vol. 41, No. 3, 86-96 (2000). Airport-restaurant Service Quality in Hong Kong Read More