Caffe Nero Ltd: Operations Management, Supply Chain, and Quality

This report provides a comprehensive analysis of Caffe Nero Ltd's operations management, focusing on its processes, performance objectives, and supply chain. The introduction provides an overview of Caffe Nero, its business model, and its position in the market. The report then delves into the co...Read More

OPERATIONS MANAGEMENT AND
SERVICE EXCELLENCE

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Assignment......................................................................................................................................3
1. Introduction and overview of Caffe Nero Ltd.........................................................................3
2. Operation management process of Caffe Nero Ltd.................................................................6
3. Performance objective.............................................................................................................8
4. Supply chain of Caffe Nero Ltd ............................................................................................10
5. Comparison of quality process of Caffe Nero Ltd and Pret A manager................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
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INTRODUCTION
Operation management is the central function of business units, it includes planning,
organizing and monitoring of production and manufacturing process of organizations. Major
concern of companies are to turn input into quality output. Management of the organization has
to design the process in such manner that can support in converting resources into efficient goods
and services (Niinomi and et.al, 2014). Present report is based on Cafe Nero Ltd which is
working at small scale in the London. Assignment will give overview of the Cafe Nero Ltd and it
will analyze operation management process of cited firm. In addition, study will discuss five
performance objective of company and improvement needed for enhancing performance of the
organization. Supply chain and quality process of the Cafe Nero Ltd will be illustrated in this
assignment (Ee and Rashad Yazdanifard, 2015).
ASSIGNMENT
1. Introduction and overview of Cafe Nero Ltd
Location and type of business
Cafe Nero Ltd is the independent European style coffee house. It is located in the London
and working as medium size cafe in the market. It was founded in the year 1990, it sources high
quality green beans and freshly roast them in order to serve quality products to the consumers
(Cabrera and et.al, 2016). Aim of the organization is to serve the best coffee in UK and gain high
profit. It wants to serve its customers well that is why it used advanced technologies in the
system so that it can cook good products for the customers. Company is ranked excellent by its
consumers on the official website. Cited firm is engaged in the cafe type of business and in this
field it is working tremendous.
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Ownership of business
Key people of the Cafe Nero Ltd is Gerry Ford who is chairman and CEO of the
business. Helen Jones who is group executive director of the organization. Both these persons
have contributed well in establishing the cafe shop in the London well. It was founded in 1997
but in the year 2007 it started earning profit and it has started focus on providing flexibility in
order to develop the business soon (Miura, Sakai and Kobayashi, Fujitsu Limited, 2014).
Customers
Customers of Cafe Nero Ltd are satisfied and they give rank to the entity excellent. It
gives loyalty cards to the customers so that they be associated with the organization for longer
duration. Though it is working in the limited place thus cited firm is having limited customer
bases. Company is not having good marketing strategies thus, few people or local public know
about this cafe shop (Li and et.al, 2014).
Capacity
Consumers of the Cafe Nero Ltd are liking the drinks serve by the entity. It has skilled
employees those who are loyal towards the brand. Apart from this, it has capacity to grow well.
Cited firm has sufficient financial resources and operational cost of the organization is
management (Jin, 2015).
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Range of services offered
Along with traditional drinks such as cappuccino, latte, Cafe Nero Ltd also sells Frappe
latte and Hot chocolate, hot chocolate drinks. In the year 2007 cited firm has introduced hot
chocolate drinks in the London market. Apart from this it offers tea to its customers. Company
provides wide range of services to its consumers. It focuses on keeping customers satisfy so
always try to find out the needs of its users and accordingly it offers them quality products.
Founders of the cited firm has recently started Nero foundation in order to support coffee
growing communities (Pei-rong and Bureau, 2014).
Layout
Cafe Nero Ltd is following the flat structure, it has limited space for the working. There
is limited space of sitting for the consumers. There are limited number of employees work in the
organization though they are skilled and talented but they sat y in the organization for limited
period that is why retention rate of workers are very low. Sometimes due to poor door
arrangement and other facilities customers feel congested (Christopher, 2016).
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2. Operation management process of Cafe Nero Ltd
Operation management is the important tool that supports in converting the input into
quality output in order to provide quality services to the customers. Companies want to gain
competitive advantage and want to enhance their profitability for that it is necessary to offer
quality products and services to the service users (Rushton, Croucher and Baker, 2014). For that
it is essential to look upon the operation management process so that it can satisfy its clients.
Operation management is the process in which management uses various tool and
techniques in order to make manufacturing firm smooth and effective productive. With the help
of this, companies can gain high profit and can gain competitive advantage. It will support in
sustaining in the corporate world for longer duration (Fernie and Sparks 2014).
Operation management process of Cafe Nero Ltd supports the firm to great extent.
Effectiveness of process are discussed as below:
Quality maintenance:
Quality is the set standard that supports in measuring the level of product and services
against the benchmark. According to the ISO 8402-1986 quality can be defined as features and
characteristics of any products that has ability to satisfy its consumer’s needs. It is necessary for
the organizations to maintain quality and have to provide them goods and services as per the
needs. By this way company can be able to sustain in the corporate market for longer duration
(Stevens and Johnson, 2016).
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In the Cafe Nero Ltd managers closely supervise the activities so that employees serve
quality drinks to the customers. They guide its workers and train them about temperature,
cleaning etc. So that they prepare hygiene products for the clients. Managers of cited firm
purchase raw material from the reliable suppliers those who provide them quality raw material at
lower rates (Tseng and Chiu, 2013). To measure the quality cited firm time to time conduct audit
so that draw back of the current process can be identified and managers can improve the process
in order to satisfy its consumers. Inspection from local authorities supports the cited firm in
improving the process and by this way people will be able to satisfy its consumers well.
Management of the company focuses on the cleanliness so that no customer complain
about hygiene factor. Organization give training to lower staff members so that they can know
about standards and can work accordingly (Ross, 2016). In the training program managers of
cited firm make them understand about new technologies, cleaning schedules etc. That helps in
raising standards of the products of the organization to great extent.
Transformation of resources
It is another benefit of the operational management process in the Cafe Nero Ltd. Input
transformation output process is the best way of utilizing the resources well. It is the process
follows by Cafe Nero Ltd in which citied firm transform its physical material in as per the needs
of users (Daugherty, Ellinger and Myers, 2015). By making changes in characteristic of material
cited firm is trying to produce the quality drinks. If it finds that raw material is not good then
company make changes in the material buy it from other suppliers. Company utilize the
information properly in order to serve products to consumers as per the needs.
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Minimizing wastage
Operation management process of Cafe Nero Ltd is beneficial and support the cited firm
in minimizing the wastage of the company. Whenever, company produces any products then it
looks upon that the factor that all resources are used by the employees effectively. If there is the
situation where wastage of raw material is taking place then in such condition cited firm train its
staff members in such manner so that it can utilize the resources well and by this way reduction
will get reduced soon (McCormack and Johnson, 2016). With the help of operation management
company is improving the process well, lean manufacturing process of the company is very
effective and supports the Cafe Nero Ltd in accomplishing its goal soon. It involves continuous
efforts for eliminating the unnecessary activities. Following lean manufacturing process is
helpful and supports in increasing satisfaction level of workers and in earning high profit. In this
process cited firm focus on the quality, cost and delivery (Aung and Chang, 2014). Company
always concentrates on improving its quality so that it can attract more consumer towards the
brand. Apart from this, cited firm try to reduce operational cost of the organization and try to
deliver quality products on time to the consumers so that they be loyal towards the brand.
Making planning
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Operation management process of Cafe Nero Ltd helps in making effective plan to
expand its business across the world. It supports in forecasting the situation and accordingly it
plans how much stock is to be ordered and how many staff are required. Company forecast the
future sales and accordingly plan the activities. So that utilization of resource can be done
significantly (Tseng and Chiu, 2013).
Controlling
Operation management process of Cafe Nero Ltd is beneficial and supports the entity in
accomplishing its objective. With the help of this process cited firm make effective control over
its business activities. Company adopts JIT approach that assists in improving efficiency of the
production process. With the help of this approach company can reduce cost and can develop
good relationship with the suppliers. Ultimately it enhances satisfaction level of customers by
this way company will be able to increase its sales volume. That would help in increasing
revenues of the organization (Daugherty, Ellinger and Myers, 2015). It is evidence that JIT
system is giving benefit to the cited firm due to this it has reduced its billing errors to great
extent. It is found that many customers complain earlier that company is not doing billing
properly and employees are not efficient. But after adopting JIT approach its consumer
complains have been reduced to great extent. Count-n-control is another tools which is used by
the Cafe Nero. From the survey it is found that earlier supply channel of the organization was
not good that is why operational cost of the company was too high. But after using this
techniques cited firm has made effective control over its cost that is why profit if cafe has been
increased to great ex tent as compare to early years.
In addition to this, it can be stated that Cafe Nero is focused towards use of computerized
POS system. It assist in calculating the customers check on automatic basis. It also reduces the
billing errors and improve long term sustainability. Along with this, Errors in reading hand-
written tickets are reduced, reducing food waste. It improves the overall management of Cafe
Nero which advances the overall performance. Moreover, count-n-control is also a tool which is
employed by the Cafe Nero in order to advance supply channel. With an application of such
method the cost is also being controlled which enhances the overall outcome in context to
operation management. Time forge is a method which helps in management of scheduling
activities. It also impacts positively on labor cost for sustainable development. Sifts can be
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scheduled effectively so that human resource management can also be advanced. Waitlist
management system is a method which assist in prioritizing the customers. It is one of the best
way to serve customers and ensure that operational standards are effectively managed.
3. Performance objective
Every company has some objectives which it wants to accomplish. Most of the firms
want to earn high profit whereas others want to satisfy their customers. Aim, goal of all
organizations are differed from each other’s, it dependents upon the type of the company and
resources available to the entity (Rushton, Croucher and Baker, 2014). Performance objective of
Cafe Nero Ltd are discussed as below:
Improve quality
Cafe Nero Ltd is aiming to improve its quality to great extent. Cited firm is delivery
quality product s but r there is huge scope of improvement. So that is the main performance
objective that to enhance quality of the products. There are many competitors of Cafe Nero Ltd
those which are offering quality product s to the consumers so to meet with the expectation of
the users cited firm needs to enhance its quality so that it can satisfy its consumers well. By this
way business revenues of the organization will get enhanced (Jin, 2015).
Meet customer expectation
Another performance objective of Cafe Nero Ltd is to meet needs of consumers. In the
cited firm consumers have to wait lot for getting final drink. Sometimes they do not get the
products because of unavailability of products in major locations. Thus, company wants to meet
their expectations.
Speed objective
Cafe Nero Ltd wants to eliminate the speed between customer requesting and final
receiving of the products. It is the major performance objective of the organization because by
this way cafe will be able to accomplish its final objective soon (Fernie and Sparks, 2014).
Cost objectives
Cost is closely related with the quality of product. If company improves quality then it
will have to spend a lot on the improvement thus it will increase cost of the organization. On
other hand if company do not focus on the quality them cost will be in control. But r it is
necessary for the Cafe Nero Ltd to enhance its quality but control over cost. It is only possible
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with the help of effective strategies. Monthly report s of the company shows that cited firm is
investing huge amount in the improvement of quality (Rushton, Croucher and Baker, 2014).
Thus it is aiming to make effective control over its cost so that it can increase profit of the Cafe
Nero Ltd.
Staff retention
As Cafe Nero Ltd is working as medium size organization in London market. Employees
are skilled so they are getting employment opportunity from other cafes. That is why people are
leaving the workplace soon but cited firm wants to retain skilled persons in the organization for
longer duration. It is another performance objective of the Cafe Nero Ltd that can support s cited
firm in completing its goal soon (Daugherty, Ellinger and Myers, 2015).
Improvements
Cafe Nero Ltd is working well but there are many areas which needed improvement.
Cafe needs to improve its layout, it is required to make changes in the layout so that cited firm
can grow well and can accomplish its objective soon. It is noticed that tills are attached at wrong
place. Due to this, consumers are getting troubled. Cited firm should defiantly work on its design
and structure of the space. It should properly arrange tables and chairs so that some clear space
can be visible by the users (Ee and Rashad Yazdanifard, 2015).
In addition to this cafe is having limited number of staff members. When workload is
here then cited firm fails to manage the customers well, at that time consumers have to wait a lot.
That demotivate them and decrease their morale too. That is why company fails to satisfy its
consumers well, and people move to other brand to have drinks. When more than 10 clients
come in the place at single time them they do not get proper space to stand as well because of
messy arrangements. Cafe Nero Ltd must arrange the space properly. Apart from this it has to
utilize its resources well so that operational cost of the company can be minimized (Cabrera and
et.al, 2016).
Cited firm should hire more staff members in the busy times, so that business can be
managed and company can serve quality services on time to them. It should hires people part -
time those who can work in busy times as well. By this way company will not have to give
salaries to those in off seasons. This is the great strategy and improvement that would help in
accomplishing performance objective and goal of the organization (Pei-rong and Bureau, 2014).
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In addition to this, Cafe Nero Ltd is required to do proper market research about needs
and want s of consumers, by this way it would be able to offer people products as per the needs
of consumers. That would help in increasing sales volume of the company and profitability of the
organization will get enhanced soon.
4. Supply chain of Cafe Nero Ltd
Supply chain is one of the important part of business operations. Companies have to
manage its supply chain effectively in order to enhance quality of the products. Supply chain is
the network of resources, individuals and activities that are involved in creation of final goods
and services. It is the oversight of information and other resources that can help in manufacturing
a final goods with quality. Supplier supply the raw material and company utilize the resources
well so that it can make effective control over the operational process and can manage its work
well (Fernie and Sparks, 2014).
The main objective of supply chain of Cafe Nero Ltd is to produce quality goods that can
help in satisfying needs of consumers. Risk mitigation is another objective of supply chain
management in the cited firm. By this way company will be able to buy such raw material that
can give benefit s to the cited firm and can make effective control over its cost. Cafe Nero Ltd
buy raw material like tea, etc. Company purchase such raw material after forecasting the4 sales
in the future (Christopher, 2016). That supports in increasing business of the company to great
extent. Supply chain management supports in increasing efficiency of the product s and company
too.
Cafe Nero Ltd is having more than three suppliers those who supply different material to
the cited firm. Advantage of this supply chain in the Caffe Nero Ltd is that company can enhance
its quality of products with the help of this supply chain. Apart from this it supports in
minimizing cost of the organization as well. Cafe Nero Ltd is having more than three suppliers
and they all give raw material to cited firm at different rates. If one supplier ask for high cost
then in such condition Cafe Nero Ltd can buy the material from other suppliers. By this way it
would save the cost and it would be able to offer cheaper product to the consumers. Quality
services at lower rates can attract more buyers towards the coffee shop. Now a day’s young
generation are much crazier for doing parties in cafe shoes (Stevens and Johnson, 2016). If
company is able to provide them lower rate products them it will at tract such people and they
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will buy the products on the company. That can help in increasing profit of the organization to
great extent.
On other hand supply chain management is not good for the Cafe Nero Ltd because cited
firm is buying products from same suppliers from longer duration. If they do not deliver raw
material on time then it may create problem to the organization because it would not be able to
serve its consumers well. Apart from this same suppliers can supply below quality products to
the Cafe Nero Ltd, in such situation it would be problematical condition for the company
because it would not be able to satisfy its consumers. Because it can influence mind of users and
can make them negative towards the brand (Jin, 2015). Thus, it is necessary for the organization
to manage its supply chain well. By this way company will be able to enhance quality of the
products and that would help in increasing satisfaction level of its customers.
In order to have continuous improvement in supply chain the business firm is well
focused towards business analytics. By having an appropriate analytical skills among managers
in regard to supply of raw materials the overall process is being streamlined. Online report
manager need to be employed in order to ensure that supply chain process is well standardized.
In addition to this, it can be stated that KPI scorecard is being analyzed in order to ensure that
long term goals and objectives can be accomplished effectively. Supply chain visibility is also a
method which assist in process ranking so that coordination between warehouse and café can be
advanced effectively. Inventory management is advanced through application of DMA which
assist supply chain team in desired manner.
It is found that KPI is the technique that can support in raising the standards of
the organization. has adopted this, and it has analyzed it s market position. By this way cited
firm got to know improvement areas such as training to staff, used of advanced technologies etc.
These strategies have been adopted by Cafe Nero by this way it has matched the standards
and reach to benchmark.
5. Comparison of quality process of Cafe Nero Ltd and Pert a manager
The Starbucks adopt the supply chain management and on the other side CCD adopts the
supply chain management. They both play a vital role in the enhancement and strengthen the
firm’s competitiveness. Thus, they both are continuously fluctuating the international market as
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the quality of no longer sufficient. Therefore, there is a need of new challenges that are now
majorly involves in which they mainly focus on the supply to measure the effective as well as
right time and placing the goods in a an effective manner (Stevens and Johnson, 2016).. Thus,
the business that are internationally have a competition as there is not limited to the company but
now they are majorly involves the effective supply chains. Therefore both total quality
management and supply chain management are the more complex and critical to the business
performance as they are to be studied them together. Thus, in these there is a similarities and
difference among the total quality management and supply chain management are to be
discussed. In both the quality process of Starbucks and CCD in which they are not always are the
easy at the time of implement whether it is total quality management and supply chain
management. There is high level of risk and difficulties involved in it when they both total
quality management and supply chain management if they are integrated. Thus, for the purpose
of understanding among the conceptual difference and similarities through attaining the synergy
and ignoring the failure (Christopher, 2016). Therefore, it also have to identifying those areas for
the future research for the getting the opportunities if they both are to be integrated.
Conclusion
From the above report it can be concluded that operation management is the most
important part of business activities. In the absence of proper management of operations no
company can accomplish its objective easily. From the discussion it is found that Cafe Nero Ltd
is working as medium size company but it has potential to grow well and expand its business
across the world. Customers of the citied firm are satisfied but to attract more consumers towards
the brand cited firm is needed to improve its layout. It needs to properly manage is space so that
it can make its clients comfortable. Quality is the most important part of operation management.
With the help of this company can enhance its quality well. Input-transformation-output model is
one of the important tool of operation management. With the help of this organization will be
able to reduce its operation cost and will be able to utilize its resources well.
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