Operations Management - The production system, which is being analyzed, is that of Valentinos Restaurant.
Mohammed Abul-Hawa - -
The production system, which is being analyzed, is that of Valentinos Restaurant.
Valentinos is an Italian restaurant, which has been running under the same ownership for the past 18 years.
It is a reasonable sized establishment based in the ‘heart’ of Cleethorpes.
The restaurant prides itself on quality and targets the mid end of the market. Its clientele is family & anyone who wants a romantic night out. It caters for all occasions, tastes & special occasions.
Valentinos pioneered Italian food in Cleethorpes, being there first it has seen of competition and still runs strong.
The mission statement of Valentinos makes it easier to establish what the important aspects of the product are.
“ To provide high quality food and service at an affordable price, whilst ensuring the satisfaction of each and ever customer”
The product, which Valentinos is offering, is Italian food.
As the market for take away food is becoming ever more saturated with competitors, with an ever-growing number of take-aways and restaurants opening up, it is becoming increasingly more important to recognize the core aspects of your product. By doing so you are able to highlight the differences between your own product, and that of your competitors, to enable you to offer a superior product/service than the next.
- Arguably the most important aspect of the product that Valentinos is offering is authenticity. The product must be authentic; by no means can the product be seen as just, ordinary Italian food. It must be seen as something different from what everyone else is offering. Obviously with Italian food, as with any other basic type of food, there is a basic product, which the customer is expecting e.g. if the customer is ordering a pizza, there is the standard way of having a bread base with whatever topping the customer requests. So the restaurant has to ensure their product is what the customer expects, but unique in every way.
- The meal/food must be traditional and in accordance with everything that the customer expects from an Italian meal. Everything from the food, to the way it is presented, to the way the restaurant looks must have an aura of traditionally to it i.e. It isn’t much of an Italian ‘feel’ if the place looks like a McDonalds. So traditionalism is another integral aspect, which ties in very closely with authenticity. These two factors combined are what separate the core product of one business, from another.
- The food must also be seen as being ‘trendy’! The idea of such a product being trendy doesn’t seem important if you are only specifically targeting one segment of the market e.g. family meals. If you want to expand your customer base you must try to make yourself appealing to that segment of the market e.g. couples/groups on a night out.
- Another very important factor if the product is that it must be quick. This may seem straightforward, but it is much more complicated than it seems. Although time is of the essence, the customer having a meal needs to feel that they are not being ‘rushed’ through their meal. At the same time they need to feel as though they aren’t waiting any longer than they should be. It is therefore very important to establish the correct time scale, from when the customer orders the food, to when they receive it.
- The price scale is a very important element, which the restaurant has to think carefully about. The restaurant states, within the mission statement, that the food must be at an “affordable price”, however, the boundary between the food been reasonably priced lies very closely with the food being ‘cheap’ or ‘overpriced’. So the inescapable consideration of price is very important and apparent whenever a meal is purchased.
Although the next two factors aren’t directly related to the product, they are synonymous with the purchase of the product, whether it is a meal or a take away.
- Atmosphere ties in very closely with the idea of a traditional & authentic meal. The atmosphere can’t be bought; it is more of an experience that comes with the purchase of the product. It must again be given careful consideration, as it is another element, which separates you from your competitors.
- The service a customer receives is as important as the food itself, it sounds drastic but is very true. You could have the best food in the world, but if you aren’t treated well you will not go back. There are so many other places to go, why put yourself through it again. So it is of extreme importance that a customer be treated to “high…quality service” every time they visit your establishment.
The restaurant has a seating capacity of 70 people, with room for another 20-30 standing. The restaurant caters for special occasions e.g. parties, wedding receptions etc and has regular bookings, but the main trade is made by people just walking in. Because of this, there are never really any set figures for the number of customer at any given time; however there are trends i.e. the weekends are predominantly the busiest time of the week.
The trends constantly change, pending on the time of the year i.e. the summer is without a doubt the busiest time of the year, with the overall level of customer demand increasing drastically.
The accompanying table (Please refer to Fig.2) helps to indicate the weekly trend throughout each night of the week, showing ‘peak’ periods and increased levels of demand.5
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The ranking helps to give an idea of how busy it gets at what time of the night, on what night.
The nights are basically grouped into three categories (Sun/Mon/Tues), (Wed/Thurs) & (Fri, Sat).
During (Sun, Mon, Tues) the opening hours aren’t as long as the rest of the week. As on these days there are no night attractions open e.g. nightclubs. Therefore customer demand is generally not as high; the main custom is made up of people coming in for an evening meal, with eating in accounting for a large portion of the restaurants business.
During (Wed/Thurs) business in the early evening is very similar to that of (Sun, Mon/Tues) in that the majority of business is evening meals eaten in. Throughout the night this trend continues, but the level of take aways significantly increases. As people are coming in from clubs, pubs etc and going home, most just want to take a pizza with them. The majority of food sold is single course ‘products’, with people coming in and out very quickly. Therefore the product production system needs to be extremely efficient, as people dont want to wait.
(Fri/ Sat) are different form any other time of the week, as generally, it is the time when most people ‘go out’. Throughout the night the general trend is for it to get busier as the night goes on. The type of custom, as with (Wed/Thurs), shifts from early evening meals, to people coming in and out very quickly having something ‘quick’ to eat. The level of take aways is at it’s highest throughout the whole of the week, forming a very large portion of the restaurants overall trade. On (Fri/Sat) the product production system is taxed to the maximum.
In the summer the general trends remain the same, except, the overall level of business increases dramatically. There are more customers, the restaurant is busier and the levels of demand are significantly higher. Throughout the summer the restaurant has to be prepared to handle this dramatic increase in business. There is not really any different approach towards tackling summer trade, as opposed to the rest of the year. Perhaps the main change being increased levels of stock and preparation.
During those ‘peak periods’ the people waiting for take aways are able to wait near the bar, which is where the food is brought. This way they are not interfering with the customers who are ‘eating in’.
As mentioned earlier, the restaurant also caters for bookings, which obviously take priority, but due to the size of Valentinos very rarely are customers turned away.
If demand for a particular ‘dish’ is made, prior to a large booking, it can be catered for very easily, as the chief knows exactly how much, of what product is needed for that particular order.
However, if the demand for a particular ‘dish’ comes suddenly, it depends on the supplies within the restaurant. These ‘sudden’ trends can be predicted by the chef, as he has a lot of experience in the trade e.g. if it is summer, then the restaurant will have an extra supply of things such as ice cream, salads, soft drinks etc as these are the typical foods which are in during that period.
Due to the type of trade and the fact that Valentinos is a ‘relatively small’ family run establishment, the owner is willing to provide anything that the restaurant runs out of. As the menu has lots of ‘fresh’ dishes on it, the demand for fresh produce is constant, regardless of the time of the year. This, along with a lot of other products, can be purchased locally, so it is not a big problem.
However, products such as flour, wine, beer etc are not purchased locally, and are delivered once a week/month. So demand, depending on accurate predictions can be catered for.
There are not really any other products, which require ‘special treatment’, with regards to supplying for demand. The only exception being seafood, as it comes in ‘seasons’, certain types of product can sometimes just not be found e.g. during the summer Valentinos were not able to purchase any whitebait as it was ‘out of season’. This was a big problem as whitebait was an integral part of several dishes on the menu.
To overcome this, foods such as whitebait, are kept in higher levels of stock to compensate for any shortages, which may occur.
As has previously been mentioned, most products are acquired locally, except for a small amount. However, the reliability of the supplier always has to be questioned. Regarding the supplier of Valentinos, the company has rarely failed to supply, over 18 years. Except for a small number of times when unforeseeable events have occurred e.g. petrol shortages. Even then the supplier informed the owner in advance, so that the order could be increased.
As the restaurant is only a small establishment there is not really any need for any supply mechanisms i.e. J.I.T, the ordering is left to the owner and chef, who have adequate experience to do so.
Planning & control of products is required to be efficient, the restaurant does not really do any long-term planning, due to the volatile nature of the trade. Everything is on a shorter-term basis and this never really changes. A mistake in the ordering of a certain product e.g. flour would have serious repercussions, as it is a vital component needed to make a pizza.
“In making short-term interventions & changes to the plan, operations managers will be attempting to balance sped, quality, dependability, flexibility and cost of their operation”(Murdick R, Render B, Russle R, 1990, Service Operations Management, Allyn and Bacon)
Looking at the delivery system of the restaurant (Please Refer to Fig.1), it falls into two basic categories: ‘Eating In’ & ‘Taking away’.
As has been previously mentioned, the restaurant has a very uncomplicated method in terms of how it operates. Everything within the restaurant is kept as simple as possible with regard to the delivery system; it has not changed much over the past 18 years.
There are never really any major problems with the delivery system concerning ‘eating in’.
The main failure of the delivery system is when the restaurant has run out of something and an order for it has been taken. When the customer has ordered, not having been advised that it was not available, this represents a failure on behalf of the restaurant and highlights faults within the current delivery system.
When a customer is eating in, the waiter is able to interact with them, when the order is being made. It is therefore the waiters responsibility to inform the customer of any dishes which are not available, both food and drink. In order for the waiter to do so, the kitchen needs to inform the waiter exactly what is available and what isn’t, before hand. As it is the job of the waiter to provide the drinks/beverages they should already know what they have and don’t have.
When an order id taken for a dish, which isn’t available, this is a direct result of a breakdown in communication in the delivery system. It is the responsibility of the kitchen to inform the waiter, and it is then their responsibility to inform the customer.
A lot of responsibility is placed on the communication between the ‘floor’ and kitchen. Obviously mistakes are made and things can be forgotten, but as with any operation there is a certain degree of responsibility place on the employees.
A way of overcoming this is to have the chef write on the kitchen notice board, exactly what is out of stock. The waiter can then write this on their order pad, which they will have with them when they are taking orders. The waiter then knows exactly what they don’t have, before hand.
If however, a breakdown still occurs, it was either the failure of the waiter to take notice of the board or the chef’s failure to write it down, or both.
Therefore the delivery system, in this instance, is very dependant on the competence of the employees. This can really only be rectified when hiring/firing, so it is very important that the right people are hired to do the job correctly.
Perhaps the main failure within the delivery system of Valentinos lies within its current system of dealing with take away orders.
As can be seen from the flow chart, when the customer comes in, they order at the bar and then pay. The waiter then takes the order down to the kitchen, which is where he will return to collect it. As can be seen the system is very basic, perhaps too basic?
A very common problem with this system is orders being taken at the bar, when they are not available. This does not look good for Valentinos and highlights a major problem within this take away delivery system.
As with the problem, regarding eating in, a simple pad and pen cannot rectify this as orders are being taken at the bar simultaneously to the ones being taken in the restaurant. Therefore the waiter at the bar doesn’t have any knowledge of what has been ‘sold out’ and if the last of a particular dish has been sold.
This represents perhaps one of the biggest ‘system failures’ within Valentinos, this design failure is a major contributing factor to the breakdown in the delivery system, as the bar is too far away from the kitchen.
One way of rectifying this would have been to properly arrange the layout in a more accessible manner. If the service/line bar had been closer to that of the kitchen, then it would be easier for the waiters to interact with the kitchen staff, the waiters would the be able to tell the customer directly.
By employing a ‘line layout’ within the restaurant there would be enough room for people eating in and taking away. However this would require considerable work and such a major project would require vast amounts of funding.
Perhaps the current layout would have been adequate to deal with the demands of customers eating in, but due to the ever increasing number of take aways at ‘peak periods’ and the overall demand for take aways, inadequacies within the design become evident.
As with any design idea, the layout of Valentinos might have seemed adequate on paper, but due to the changes in trends/demand were obviously not anticipated prior to the design of the layout, it is now insufficient
Regarding this obvious design failure, there is nothing that can realistically be done, as it would simply cost too much to put right.
A definite solution would be the introduction of a computer system within the restaurant e.g. a LAN (Local Area Networks). This would enable the kitchen to input what is and isn’t available, from the kitchen, this information would then be on hand for the waiter who would be able to inform the customer before the order is taken. This would defiantly improve the delivery system within the restaurant, and should in theory, rid Valentinos of its current system flaws.
This option would again have high costs, for installation and purchase, for such a small business. The benefits would probably not justify the implementation of such a system.
An alternative, but equally effective solution to the problem would be in intercom between the bar and the kitchen. The bar could then check, before the money is taken, that that particular dish is available. This option is significantly cheaper and more realistic, for someone the size of Valentinos. This option would have a small initial cost of installation, but the benefits would definitely be reaped, as it should effectively solve the problem within the delivery system.
Regarding possible solutions to the failures within the delivery system, perhaps the most overlooked is the failure of the employees and the staff/owner.
Obviously when deciding and designing the layout of Valentinos the owner saw it fit to select the current layout. This ‘error’ in judgment by the owner is now blatantly obvious, as the negatives of sacrificing the takeout area for ‘eating in’ space are evident during every ‘peak period’. There is no doubt that the owner should have done something different, by having an alternative more accessible layout to the restaurant certain system failures would never have occurred.
Another staff failure is evident regarding the failure within the ‘eating in’ process of the delivery system. As has been mentioned the solution to the problem would be the introduction of a ‘message board’ in the kitchen, which the chef would constantly updated throughout the opening hours. The waiter would be then able to write this down and inform the customers, using his order pad. This solution, although very simple and effective relies heavily on staff competence. The implementation of such a system should, theoretically, solve the problem. But there is nothing that can be done to prevent these ‘violations’ of set procedures.
Although there are evident system failures within the delivery system of Valentinos, they are only minor. With the root cause of both being human failure, however as has been mentioned, both can be rectified. Valentinos need to confront these failures and look at them as an opportunity, to improve its delivery system and rid it of underlying faults.
“ Realization of this has led to what is sometimes called ‘the failure as an opportunity ‘concept’ ”
There is no need to avoid these ‘hindrances’, by confronting them the delivery system at Valentinos will improve and run smoothly.
There are not really any set guidelines for the way Valentinos handles its inventories. Valentinos do not currently apply any specific ‘stock holding system’; they simply rely on the chef/owner to order what is needed.
The chef/owner has a list of what is needed after each night, which needs to be bought for the following days business e.g. fresh vegetables. Only a small number of products need to be bought from day-to-day, these are mainly the perishable items. When they are needed the chef/owner will simply acquire them for the next day.
The majority of restaurant inventories are bought on a weekly basis from local wholesalers. These are items, which are in shortage, or what they have simply ran out of, such as coke, cheese, yeast etc. The owner will again purchase these items himself.
The only exceptions, to the inventories purchased by the owner, are the items, which cannot be purchased locally, e.g. wine, beer etc. These are again ordered on a weekly basis from the specific supplier.
Valentinos also acquire inventories from a supplier on a monthly basis; these are items such as serviettes, takeaway boxes, flour etc. These may only be ordered once a month, but are of paramount importance in the running of the restaurant.
As can be seen the management of the inventories is again very basic. Valentinos have used this basic approach for the past 18 years and it works for them. However, this system relies heavily on the chef/owner. In the past there have been occasions where orders have not been made and miscalculations have occurred.
As demand can never be perfectly predicted, Valentinos hold a certain amount of buffer inventory. This inventory is usually items, which are not perishable, which can be stored in the storage room. The buffer level is not too high, but as I have mentioned specific orders are made once a month, these are made on the basis of predictions. Having said this, with these once a month orders higher levels of inventory are always held, as if these run out problems will inevitably occur, as they cannot be purchased locally.
With regards to the rest of the inventories, there is only a certain amount of room available, and as they can be purchased locally there is not much emphasis on having a large buffer level.
As some produce is perishable inventories cannot be held for long periods, as they wont be fresh, so little is held.
Valentinos also use anticipation inventory, to compensate for predicted fluctuations in demand. During the summer period demand will certainly increase, Valentinos therefore have to anticipate this and make sufficient changes to levels of inventory held and ordered. By doing so Valentinos are compensating for the differences in timing of supply and demand, to try and give themselves an adequate level of produce to handle any rise in demand.
The current inventory system of Valentinos is archaic, basic and very simple, and is totally reliant upon the owner/chef. This in itself perhaps highlights one of its major possible faults, what if staff failure occurs? What if the owner is sick has to go abroad? In this instance the head chef is always there and has been so for the past 18 years. The restaurant opens every day and has never opened without one of the two being there.
The adoption of a sophisticated computer based system to solve this, would be pointless in this instance as the complexity of such a system would not suit a business like that of Valentinos. Valentinos itself is simply too small and such a system would not be fitting for an establishment the size of Valentinos.
Perhaps the implementation of a solution, which isn’t as complex, would improve the inventory management.
As Valentinos stock various types of inventory, each of which has specific importance over one another, the introduction of a system such as the ABC system would complement this. This system uses the ABC classification of stock, using the ‘Pareto principle’ to distinguish between the different values of, or significance placed on, types of stock. Such a system would be suited to an organization like that of Valentinos as it can be applied with a certain amount of ease and doesn’t require the extravagant amount of funding like a computer system.
Such a solution would certainly improve the inventory management of Valentinos and should be considered. This would allow Valentinos to hold their ‘buffer level’ and would prevent, with proper execution, Valentinos running out of important produce. This system would also stop too much stock been held and would help prioritize when purchasing produce.
As Valentinos is a small traditional Italian restaurant it relies heavily on the customer/provider interface, Valentinos prides itself on the relationship its employees are able to build with customers.
By adding self-service technology to the current delivery system, it would in effect, take away the authentic Italian experience which separates Valentinos from its competitors.
Regarding the current take away system; the introduction of a telephone system would significantly decrease the process time and the wait for the customer. For example, if a telephone system where in place, so that the customer can ring in and place an order, prior to entering the restaurant, they would not have to wait. If this system gave the customer an order number and collection time, with the order going straight to the kitchen, this would in effect cut out the rigors of the current delivery system. There would be no need to take the order, bring it down; the customer would not have to wait. The customer would therefore be able to order exactly what they want, directly with the kitchen staff.
This would certainly rid the current takeaway delivery system of its major fault, as the kitchen would know exactly what they have in stock. This would in effect put the customer in a stronger position as they can let the restaurant know when they can collect the order.
By implementing such a system the customer/provider interface would not be lost, which is extremely important, as the customer would still need to pay at the till. Such a system still allows Valentinos to reap all benefits whilst ridding it of its current systems failures.
Such a system would not have high installation costs, but it would require co-ordination, timing and flexibility within the workplace; the benefits of a tele-system certainly undermine the current takeaway delivery system.
Currently there are not enough measures being taken to evaluate the service of Valentinos.
After every customer is served they are asked at the till “was everything ok for you”? This way the staff are directly confronting the customer. However, such an approach, in most circumstances will not warrant a truthful answer from most customers. It is also not specific enough to target deficiencies within Valentinos, as in most instances a specific suggestion, or recommendation for improvement will not be given.
By undertaking a customer survey, in the form of a of a suggestions/comment sheet, which is given to every customer sat at their table when they receive their bill. Valentinos will be able to know exactly what was good/bad and will be able to take in valuable customer feedback, which they could user to their advantage. By doing so Valentinos will have a basis to criticize its current methods and look for improvements, which can then be made.
Valentinos is a very well rounded establishment and has all the features, which would be expected with a business that has been running for the past 18 years. It has tradition, authenticity and the owner/manager has vast amounts of experience at his disposal. Their market strategy is accurate for a business their size and stature, they know their limits and are not trying to bite off more than they can chew.
At a glance their operations might seem too simple and outdated with very little organization and direction, on the contrary they are appropriate and more importantly they work!
The adoption of the intercom system between the bar and kitchen, would be the most realistic course of action in order for Valentinos to improve their operations.
As with any business that has been running for the past 18 years, Valentinos need to take the utmost care that they do not become complacent, they need to come to the realization that things change. They need to change with time, although their current methods work now, they need to be looking ahead to see what steps they will need to take, to carry them through their next 18 years of business.