Improving Operarional Excellence
Quick Service Restaurants
Location and customer opportunity are a part of every decision in the Quick Serve Restaurant (QSR) industry, from defining optimized menus, to profiling the marketplace for marketing and promotional activities, and securing the best sites. QSR decision makers need analytics that help them not only effortlessly predict customers’ behavior but also to improve understanding of their impact on optimal product-mix (menu), and delivery and service quality levels.
New Products Introduction
New product introduction is central to many firms’ future success. Not only as a means to continue to maintain their piece of the market, but product introduction can also be a strategic means for a company to diversify, and/or alter focus to adapt to changing market conditions. Most of the research in new product development has been on how to do it cheaper and faster than the next guy. However, early commercialization does not guarantee a position of strength in the market.
There are two main factors that inhibit managers from making educated decisions on when to introduce a new product. First, firms do not exist in a vacuum and any action they take will be countered by their competition. Second, with new products the only certainty is uncertainty. To allow such decisions to become a gut feeling decisions puts a company’s future at unnecessary risk. This is evidenced by the many firms that have had devastating results because of poor decisions with regard to launching a new product. Launching or introducing new products to market quickly is a prerequisite for acquiring a competitive advantage. This creates an intense pressure to bring world-class products to market in record time. Many factors contribute to this pressure, including acceleration in the rate of technological development, improved mass communication, more intense competition due to the maturing of markets and globalization, fragmentation of the marketplace due to changing demographics, shorter product life cycles, and the escalating cost of R&D. This accelerated rate of product obsolescence increases the need to develop new products quickly enough to ensure timely introduction during the product life cycle. To be successful perhaps even to survive, a company must master product strategy and skillfully navigate through proper development, and application and management of a product strategy that separates enduring success from failure.
Computer-integrated business simulation provides effective analytics methods for providing information to support and inform management decisions to improve resource utilization, and effective capacity in creating and delivering value to customers and stakeholders.
Location and customer opportunity are a part of every decision in the Quick Serve Restaurant (QSR) industry, from defining optimized menus, to profiling the marketplace for marketing and promotional activities, and securing the best sites. QSR decision makers need analytics that help them not only effortlessly predict customers’ behavior but also to improve understanding of their impact on optimal product-mix (menu), and delivery and service quality levels.
New Products Introduction
New product introduction is central to many firms’ future success. Not only as a means to continue to maintain their piece of the market, but product introduction can also be a strategic means for a company to diversify, and/or alter focus to adapt to changing market conditions. Most of the research in new product development has been on how to do it cheaper and faster than the next guy. However, early commercialization does not guarantee a position of strength in the market.
There are two main factors that inhibit managers from making educated decisions on when to introduce a new product. First, firms do not exist in a vacuum and any action they take will be countered by their competition. Second, with new products the only certainty is uncertainty. To allow such decisions to become a gut feeling decisions puts a company’s future at unnecessary risk. This is evidenced by the many firms that have had devastating results because of poor decisions with regard to launching a new product. Launching or introducing new products to market quickly is a prerequisite for acquiring a competitive advantage. This creates an intense pressure to bring world-class products to market in record time. Many factors contribute to this pressure, including acceleration in the rate of technological development, improved mass communication, more intense competition due to the maturing of markets and globalization, fragmentation of the marketplace due to changing demographics, shorter product life cycles, and the escalating cost of R&D. This accelerated rate of product obsolescence increases the need to develop new products quickly enough to ensure timely introduction during the product life cycle. To be successful perhaps even to survive, a company must master product strategy and skillfully navigate through proper development, and application and management of a product strategy that separates enduring success from failure.
Computer-integrated business simulation provides effective analytics methods for providing information to support and inform management decisions to improve resource utilization, and effective capacity in creating and delivering value to customers and stakeholders.
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Statement Hierarchy
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Strategy Hierarchy
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Functional Strategies
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Operations System
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Operations
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Statement Hierarchy
[TBD]
Mission Statement
mission statement is
“To be American’s best quick-service restaurant at winning and keeping customers.”
The mission statement has the following features:
Vision Statement
vision statement is
“To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A.”
The vision statement weaves religious principles into the dedication that the company shows towards improving itself and its customers. The statement shows how it sees itself as a servant towards its customers and communities, and its complete willingness to offer the best services. This vision statement has the following components:
Core Values
Core values comprise “customer first, personal excellence, continuous improvement, working together, and stewardship.”
There is no doubt that the business model adopted by Chick-fil-A has been a success because of these values. The customer is clearly at the heart of Chick-fil-A considering the emphasis it places on quality products and services. The management makes this a reality by creating an environment where individual workers can grow, interrelate and hone their skills in such a way that they advance the overall purpose of the company, which is to serve its customers without limitations.
[TBD]
Mission Statement
mission statement is
“To be American’s best quick-service restaurant at winning and keeping customers.”
The mission statement has the following features:
- Improving health. As a quick-service restaurant, Chick-fil-A understands the importance of preparing its food products with the health of its customers in mind. The attitude at the restaurant is all about serving people with foods that improve and boost their health. As a result, quality is the order of the rather than quantity, and this is why Chick-fil-A has gained so much popularity across the states in the U.S. due to the diligence they put in every dish. Mind you, the company has even gone father to inform its clients the ingredients in all its products so they can make appropriate choices based on nutrition and allergens. Such exceptional care and services are only available at Chick-fil-A.
- Improving communities. In this second feature, Chick-fil-A reveals that its operations are not simply focused on developing its business profile. The company acknowledges that it is as good as the people it serves, explaining its commitment to stimulating social growth and community development through numerous initiatives. For instance, Chick-fil-A is an active supporter of environmental conservation efforts through what the company calls upcycling to design its homemade fabrics and bottles among other utilities. In addition, it takes part in other developmental projects including direct sponsorship of communal clean-up projects.
- Become America’s best. Chick-fil-A has been satisfying this last component in its mission statement ever since it was founded. The company has been able to keep up with the changing business landscape without wavering off from its philosophy of treating its customers and other stakeholders with the respect and care they deserve. To stay updated with the shifting customer preferences, Chick-fil-A came up with a system where the company prioritizes its ‘cook less, more often’ mantra, directed towards satisfying the demand for fresh foods. The restaurant complements this with its distinguished customer services and etiquette, both online and in its physical outlets leading to its fame across the U.S.
Vision Statement
vision statement is
“To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A.”
The vision statement weaves religious principles into the dedication that the company shows towards improving itself and its customers. The statement shows how it sees itself as a servant towards its customers and communities, and its complete willingness to offer the best services. This vision statement has the following components:
- Glorify God through service. Unlike many companies across the globe, Chick-fil-A recognizes and appreciates the place of religious teachings in the service of its customers. The company reflects these teachings through its activities. In fact, this is one of the primary reasons the company never compromises the quality of its food as the demonstration of its respect for serving God’s creation – humanity. Its schedule also considers the need for its workforce to rest and worship so they can resume work on a Monday rejuvenated and strong to serve even better.
- Positive influence on everyone. Chick-fil-A is definitely a darling from its hometown Georgia to other states in the country because of the impact it has on people who come in contact with it. For instance, the passion demonstrated by the management trickles down not only to the franchisers in over 2000 Chick-fil-A restaurants in the U.S. but also to their workers and suppliers. All of them maintain a surprisingly high level of compliance with the principles of this company, making it one of the most coveted businesses in the nation.
Core Values
Core values comprise “customer first, personal excellence, continuous improvement, working together, and stewardship.”
There is no doubt that the business model adopted by Chick-fil-A has been a success because of these values. The customer is clearly at the heart of Chick-fil-A considering the emphasis it places on quality products and services. The management makes this a reality by creating an environment where individual workers can grow, interrelate and hone their skills in such a way that they advance the overall purpose of the company, which is to serve its customers without limitations.
Organization Strategy
[TBD]
[TBD]
Functional Strategies
[TBD]
Marketing and Sales
Product Development
HR
Engineering
IT
Production
Finance
Operations
Chick-Fil-A, Inc is one of the major fast-food restaurants in the United States. The company has registered impressive growth over the past several decades and has not considered spreading its operations beyond North America. The firm currently faces numerous challenges in the market, top of which include competition, changing tastes and preferences in the market, disruptive technologies, and the growing need to have healthy foods in the restaurants. Operations management concepts are considered critical in enabling the company to overcome market challenges. The paper identifies various concepts such as supply chain management, sales and operation planning, capacity planning strategies, six sigma, supplier management, quality function deployment, value stream, trends in operations, and customer value as the main factors that this firm should consider to various challenges the market. Each of these concepts seeks to address various aspects of operations management within the firm. If implemented properly, they can help this company to achieve success in this industry.
[TBD]
Business operations typically have a mix of production aspects and service aspects in its operations. The production schedule gives visibility into when work should start and finish. It provides a method for manufacturing and quasi-manufacturing organizations (e.g., back-office operations in a QSR) to improve operations performance through lowering production costs and reducing inventory, and improving customer service.
Simulation enables users to examine the behavior of a simulated version of the domain system model, and evaluate alternative configurations. In order to assess the impact of different strategies, and recommend rational staffing levels, users must consider the following factors:
[1] Production scheduling deals with decisions about processing times of jobs given constraints on people, machines, material, and facilities.
foresight into customer demand impact on capacity and revenue required to make marketing and promotions decisions, new products (menu items) decisions, and new facility/equipment investment decisions.
[TBD]
Marketing and Sales
Product Development
HR
Engineering
IT
Production
Finance
Operations
Chick-Fil-A, Inc is one of the major fast-food restaurants in the United States. The company has registered impressive growth over the past several decades and has not considered spreading its operations beyond North America. The firm currently faces numerous challenges in the market, top of which include competition, changing tastes and preferences in the market, disruptive technologies, and the growing need to have healthy foods in the restaurants. Operations management concepts are considered critical in enabling the company to overcome market challenges. The paper identifies various concepts such as supply chain management, sales and operation planning, capacity planning strategies, six sigma, supplier management, quality function deployment, value stream, trends in operations, and customer value as the main factors that this firm should consider to various challenges the market. Each of these concepts seeks to address various aspects of operations management within the firm. If implemented properly, they can help this company to achieve success in this industry.
[TBD]
Business operations typically have a mix of production aspects and service aspects in its operations. The production schedule gives visibility into when work should start and finish. It provides a method for manufacturing and quasi-manufacturing organizations (e.g., back-office operations in a QSR) to improve operations performance through lowering production costs and reducing inventory, and improving customer service.
Simulation enables users to examine the behavior of a simulated version of the domain system model, and evaluate alternative configurations. In order to assess the impact of different strategies, and recommend rational staffing levels, users must consider the following factors:
- Actual or forecast product demands by product (or customer and due dates)
- Workforce (labor) resource schedules – [shift patterns, and breaks cover, taken as constraints or calculated by the simulation.
- Designed stock inventory levels – [taken as a constraint or calculated by the production system].
- Raw material planning requirements, as a constraint or calculated by the simulation. []
- Process capacity and throughput by product/product type.
- Machine routing constraints and fixed production order scheduling.
- Work in progress (WIP) constraints, intermediate products, etc.
- Assembly planning rules and product scheduling sequences.
- Master scheduling[1] considerations, as a constraint or calculated by the simulation.
- Facility scheduling constraints (e.g., product mix changes, product type, etc.).
This simulation enables managers and key operations staff to gain insight into the “real world” operations of the kitchen and improve their understanding of the causal factors underlying observed gaps between needed and available capacity for given demand rates and situation. In addition it enables them to identify the critical bottlenecks and make the necessary resource and schedule adjustments (in real time) to resolve those gaps. Users can experiment with different configurations of resources (labor and equipment), lot sizes, etc., and demand rates to determine impact on operations in user specified time interval (in units of time i.e., seconds, minutes, hours, days, etc.).
[1] Production scheduling deals with decisions about processing times of jobs given constraints on people, machines, material, and facilities.
foresight into customer demand impact on capacity and revenue required to make marketing and promotions decisions, new products (menu items) decisions, and new facility/equipment investment decisions.
Optimizing Effective Capacity and Product Mix
Businesses typically have a mix of production and services that collectively define the the value creation and delivery processes. Product-mix decisions are usually supported by analytical methods such as Linear Programming (LP). These decisions are usually made so that the market demand is met and the firm profit is maximized. However, the complexity, and stochastic and dynamic nature of real-world production and business systems often lead to production levels that are different from those determined by analytical methods. Analytical methods also have problems coping with the dynamic changes in the product-mix which usually requires enhancing system parameters and/or configuration 0f value creation and delivery processes.
Product Mix Analysis - Operations Management Simulation Methods
Operations management involves the planning and coordination of work. It is essentially concerned with the creation and delivery of products and services and with providing the best match of supply with demand. Operations management simulation is concerned with quantifying the utilization of the organization's "Operating System" and providing the best match (fit) of supply (of tangible resources) and demand. Operations simulation techniques can be used to determine the impact of product/service mix changes on effective operating system capacity in terms of system throughput (effective capacity), utilization of tangible resources, product/service delays, etc. Operations simulation enables managers and key operations staff to gain insight into the "real world" situations facing the company and improve their understanding of the factors that affect operational performance.
Creating Operations Simulation Models
Analyzing the impact of product/service-mix on operating system capacity involves creating simulation models of the joint configuration of resources and processes and ensuring the resulting competencies (capabilities) are aligned with the organization's market demands for products and services. Operating System Capacity refers to a system's potential to producing goods and services over a specified time interval.
Creating a simulation experiment to investigate organization Operating System capacity for creating and delivering value defined in terms of product/service-mix involves:
[TBD]
Determining Effective Workforce Capacity
Many organizations strive to optimize their business operations to ensure they have adequate existing capacity (permanent[1] or contingent[2]) to meet service standards and productivity objectives while reducing the need to expand facilities. Manufacturing and service operations employ a number of different strategies for managing demand and capacity in order to improve resource (labor and equipment) utilization, operations efficiency and effective throughput/output, and effective performance measures such as smaller inventories, reduced waiting times/lines, reduced lead times, and consistent and on-time delivery of value to customers.
[1] Permanent capacity is defined as the maximum amount of production possible in regular work time by utilizing internal resources of the organization such as existing workforce, and equipment.
[2] Contingent capacity is defined as temporary acquisition of capacity such as hiring temporary workers, subcontracting, overtime production, vendor supplied sub component.
Determining Effective Capacity
Determining the effective capacity of a Quick Service Restaurant (QSR) to support the optimal product mix is critical to the successful operation of the organization and successful execution of marketing and product strategies. Business operations typically have a mix of production aspects and service aspects in its operations. The production schedule/plan gives visibility into when work should start and finish. It provides a method for manufacturing and quasi-manufacturing organizations (e.g., back-office operations in a QSR) to improve operations performance through lowering production costs and reducing inventory, and improving customer service. A good production schedule helps optimize the selection of machines and workforce resources to satisfy delivery requirements, while reducing lead times, minimizing inventory and costs, and maximize throughput. It involves simulation experiment models comprising the following:
Simulation Based Analysis
Simulation enables users to examine the behavior of a simulated version of the production and operations system, and evaluate alternative configurations resources on effective capacity and capacity utilization. . In order to assess the impact of different configurations of capacity and recommend rational staffing levels, users must consider the following factors:
[TBD]
Simulation Output & Analysis
The simulation output product is an interactive visualization model of the organization's production operations systems. Users can interact with the visualization to explore and examine the simulation results in areas such as:
Visualization of operations management simulation output enables managers and key operations staff to gain insight into the "real world" situations facing the company and improve their understanding of the factors that affect operational performance. Users can examine the influence of changes to demand for products in the product mix as well as removal/addition of new products to the mix to be evaluated. Product mix decisions must often satisfy some capacity constraints such as:
Businesses typically have a mix of production and services that collectively define the the value creation and delivery processes. Product-mix decisions are usually supported by analytical methods such as Linear Programming (LP). These decisions are usually made so that the market demand is met and the firm profit is maximized. However, the complexity, and stochastic and dynamic nature of real-world production and business systems often lead to production levels that are different from those determined by analytical methods. Analytical methods also have problems coping with the dynamic changes in the product-mix which usually requires enhancing system parameters and/or configuration 0f value creation and delivery processes.
Product Mix Analysis - Operations Management Simulation Methods
Operations management involves the planning and coordination of work. It is essentially concerned with the creation and delivery of products and services and with providing the best match of supply with demand. Operations management simulation is concerned with quantifying the utilization of the organization's "Operating System" and providing the best match (fit) of supply (of tangible resources) and demand. Operations simulation techniques can be used to determine the impact of product/service mix changes on effective operating system capacity in terms of system throughput (effective capacity), utilization of tangible resources, product/service delays, etc. Operations simulation enables managers and key operations staff to gain insight into the "real world" situations facing the company and improve their understanding of the factors that affect operational performance.
Creating Operations Simulation Models
Analyzing the impact of product/service-mix on operating system capacity involves creating simulation models of the joint configuration of resources and processes and ensuring the resulting competencies (capabilities) are aligned with the organization's market demands for products and services. Operating System Capacity refers to a system's potential to producing goods and services over a specified time interval.
Creating a simulation experiment to investigate organization Operating System capacity for creating and delivering value defined in terms of product/service-mix involves:
- Create product demand forecast model for products and services - This includes information about the average rates at which customers request for products and/or services including the breakdown of customer order request types (e.g., for a coffee shop regular coffee vs. espresso, for a barbershop haircut vs. shaves, etc.) – at different times of the day, and the orders' sizes
- Create configuration model for the production and/or service delivery functional unit including the configuration model of the people and equipment resources.
- Create configuration model for the products and services mix offered by the organization
- Create configuration model for the workforce (people) and their roles as well as their schedules
- Create configuration model for the equipment including operations and maintenance schedules
- Create schedules for the organization's operating times and holidays.
- Generate/Run operations process simulation models
[TBD]
Determining Effective Workforce Capacity
Many organizations strive to optimize their business operations to ensure they have adequate existing capacity (permanent[1] or contingent[2]) to meet service standards and productivity objectives while reducing the need to expand facilities. Manufacturing and service operations employ a number of different strategies for managing demand and capacity in order to improve resource (labor and equipment) utilization, operations efficiency and effective throughput/output, and effective performance measures such as smaller inventories, reduced waiting times/lines, reduced lead times, and consistent and on-time delivery of value to customers.
[1] Permanent capacity is defined as the maximum amount of production possible in regular work time by utilizing internal resources of the organization such as existing workforce, and equipment.
[2] Contingent capacity is defined as temporary acquisition of capacity such as hiring temporary workers, subcontracting, overtime production, vendor supplied sub component.
Determining Effective Capacity
Determining the effective capacity of a Quick Service Restaurant (QSR) to support the optimal product mix is critical to the successful operation of the organization and successful execution of marketing and product strategies. Business operations typically have a mix of production aspects and service aspects in its operations. The production schedule/plan gives visibility into when work should start and finish. It provides a method for manufacturing and quasi-manufacturing organizations (e.g., back-office operations in a QSR) to improve operations performance through lowering production costs and reducing inventory, and improving customer service. A good production schedule helps optimize the selection of machines and workforce resources to satisfy delivery requirements, while reducing lead times, minimizing inventory and costs, and maximize throughput. It involves simulation experiment models comprising the following:
- Determining average rates and probability distribution for customers' demand profiles for each product in the product mix and specified intervals including average order quantities.
- Creating workforce labor resource schedules for the different shift patterns, break cover, and slow periods.
- Creating organizational work process models for creating and delivering value (products and services) as well as administrative support organizational work processes.
- Defining organizational roles decisive for the QSR store and the roles and responsibility assignment policy (routing) models.
- Developing equipment capability and capacity models for store production, material handling and storage equipment.
- Developing Bill of Material (BOM) to drive materials flow and usage projections.
- Developing safety, quality, and quality of service standards as part of Standard Operating Procedures (SOP).
- Developing production planning model used to determine production factors such as take time, cycle times. WIP inventory policies, as well as performance measures.
- Create and run simulation model - The simulation output and analysis is presented visually as charts and graphs for effective capacity, labor and equipment utilization and load levels as well as process bottlenecks resulting in process delays and service delays.
Simulation Based Analysis
Simulation enables users to examine the behavior of a simulated version of the production and operations system, and evaluate alternative configurations resources on effective capacity and capacity utilization. . In order to assess the impact of different configurations of capacity and recommend rational staffing levels, users must consider the following factors:
- Actual or forecast product demands by product (or customer and due dates)
- Workforce (labor) resource schedules – [shift patterns, and breaks cover, taken as constraints or calculated by the simulation.
- Designed stock inventory levels – [taken as a constraint or calculated by the production system].
- Raw material planning requirements, as a constraint or calculated by the simulation. []
- Process capacity and throughput by product/product type.
- Machine routing constraints and fixed production order scheduling.
- Work in progress (WIP) constraints, intermediate products, etc.
- Assembly planning rules and product scheduling sequences.
- Master scheduling[3] considerations, as a constraint or calculated by the simulation.
- Facility scheduling constraints (e.g., product mix changes, product type, etc.).
[TBD]
Simulation Output & Analysis
The simulation output product is an interactive visualization model of the organization's production operations systems. Users can interact with the visualization to explore and examine the simulation results in areas such as:
- Production output and throughput.
- Resource utilization and load factors - Labor utilization and load factors; Equipment utilization and load factors; Storage utilization and load factors.
- WIP (Work-in-Progress) Inventory Levels and Control Policy Standards.
- Process capacity utilization and load/idle factors.
- Process bottlenecks and product delays.
Visualization of operations management simulation output enables managers and key operations staff to gain insight into the "real world" situations facing the company and improve their understanding of the factors that affect operational performance. Users can examine the influence of changes to demand for products in the product mix as well as removal/addition of new products to the mix to be evaluated. Product mix decisions must often satisfy some capacity constraints such as:
- Resource capacity – Production to meet the product mix demands cannot use more resources than are available.
- Demand – Customer (end user and/or stock) demand for each product is limited, and production should not produce more of a product than is demanded because the excess production is wasted.
Operations Management
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