Operations Management in Fast Food Industry

This report discusses the established and emerging consumer value propositions, process map of order fulfillment, application of manufacturing excellence, relationship between profitability and quality of service, current and potential operational challenges and recommendations for improving service operations in the fast food industry.

Running Head: OPERATIONS MANAGEMENT
Operations Management

OPERATIONS MANAGEMENT 1
Contents
Introduction......................................................................................................................................2
Established and Emerging Consumer Value Propositions within the Fast Food Industry..............2
Process Map of the Order Fulfillment Process of a Fast Food Restaurant......................................3
Application of Manufacturing Excellence on Fast Food Chains.....................................................5
Relationship between Profitability and Quality of Service.............................................................6
Current and Potential Operational Challenges in the Fast Food Industry.......................................7
Recommendation for Improving Service Operations......................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Fast food is the mass- produced food which is designed for the purpose of commercial resale
where strong priority is placed on the speed of service as compared to the other relevant factors
in the culinary science. Fast food restaurants are considered to be different due to their ability of
serving the food via a drive- through (Davis, Lockwood, Alcott and Pantelidis, 2018). The
outlets may be kiosks or stands, where no shelter or seating may be provided or quick service
restaurants known as fast food restaurants. There are a pool of organizations in the fast food
industry namely McDonalds, Subway, KFC, Dominos, Nandos, Hungary Jacks (Burger King),
Red Rooster, etc. the application of operations management in the fast food industry provides the
premium service at the minimum possible prices.
The focus of this report is on the fast food industry and the related consumer value proposition,
order fulfillment process, manufacturing excellence, operational challenges and
recommendations.
Established and Emerging Consumer Value Propositions within the Fast Food Industry
Consumer value proposition can be defined as the total benefits which are promised by the
vendor and are received by the customer in return of the associated payment. In other words,
customer value proposition offered by the fast food restaurant differentiates it from its
competitors (Payne, Frow and Eggert, 2017). These are the set of unique offerings and benefits
that are offered to the customers. In Australia, the market share of McDonalds is the largest
among the quick service restaurants. The customer value proposition of McDonalds include
convenient locations, consistent quality menu items, efficient and fast service, in- store facilities
and comfortable seating, good pricing and value offering distinct products, and a large range of
choices which are suitable for different age groups. Almost all the fast food restaurants are
currently following the same customer value proposition for the purpose of maintaining its
significance in the market. In other words, these factors have become the established consumer
value propositions within the fast food industry (Mathe- Soulek, Krawczyk, Harrington and
Ottenbacher, 2016).

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However, in order to stand out in the market, emerging value propositions are required to be
taken into consideration by the restaurants operating in the fast food industry. This will further
require launching new products and services that are coherent with the other offerings of the
restaurant (Mahadevan, 2015). This is to be done with the help of using the strengths of the fast
food restaurant that can attract the new segments of customers who have not earlier identified
with this chain. Along with the convenient locations, the new focus of these fast food restaurants
is on providing familiar tastes of the region in the fast food products. Moreover, they are also
promoting the perception of nutritional value in their offerings. This customer value proposition
has been initiated by Subway in the industry.
Process Map of the Order Fulfillment Process of a Fast Food Restaurant
The order fulfillment in the context of the fast food restaurants consists of a long process which
has been depicted in the form of the following process map (flow chart).

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Fast Food Ordering
CustomerClerkPoint of Sale TerminalKitchen
Skim
Menu
Select a
Meal
Placing an
Order
Paying for
Order
Special
Recommend
ation
Feedback
Confirm
Order
Recording
Order
Processing
Order
Available
Recording
Order
Not Available
Receiving
Order
Preparing
Food
Receiving
Payment
Recording
Transaction
Making
Food
Packaging
Food
Receiving
Food
Eating
Food
Sending
Feedback

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Order Fulfillment Process
Application of Manufacturing Excellence on Fast Food Chains
The term manufacturing excellence can be defined with the help of a set of quantifiable
performance criteria and is a combination of equipment reliability and process capability,
disciplined process control, priority focus on safety and 100% on- time delivery as per customer
request (Alvarez and Perry, 2015). All across the world, high standards of consistent services
and cleanliness are maintained by fast food restaurants which impress the customers. Quality
standards are therefore maintained as the prime priority. This leads to the question that how these
restaurants can maintain the same standards throughout their chains across the globe.
Manufacturing excellence was designed for the purpose of being used in the manufacturing
companies, however, it is not only for being used in the factories. Manufacturing excellence can
be applied in the fast food chains through adopting a number of strategies such as-
Simplicity- the standardization and simplicity in the food preparation procedures allows the fast
food chains to save money associated in training as there is abundance of part-time staff in this
industry (Liu, Lee and Hung, 2017).
Demand Pull Strategy- the production system throughout the fast food chains should be flexible
for dealing with the fluctuations and serving the customers just- in time. With the help of this
flexibility the fast food chains can easily maintain the quality of food (Cataldo, Anthony and
Halsey, 2015).
Total Quality Control- Quality control procedures are required to be maintained for the purpose
of achieving manufacturing excellence in the fast food chains at all the stages including raw
material storage, preparation of food, and storage and servicing of food. At the time of storage,
stock rotation policy should be used such that the food prepared first is served first. Strict time
policies should be taken into consideration at the time of food preparation. The holding time of
the food should be indicated through the use if holding time cards (Smith, Maull and CL Ng,
2014).

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Respect for People System- There are a number of employees who work for the fast food chains.
They should be respected by the restaurants as this will enhance their levels of productivity
(Covin, Garrett, Kuratko and Shepherd, 2015).
Total Productive Maintenance- the adoption of total productive approach is very important for
the purpose of achieving manufacturing excellence in the fast food chains. Maintenance
activities are required to be performed for the purpose of ensuring that the machines are
performing at their 100% capacity.
Job Rotation- Job rotation policy should be maintained by the fast food chains for the purpose of
improving production flexibility thereby making the production system more responsive to the
changes taking place in the market demand.
Quality System- In order to apply manufacturing excellence in the fast food chains, a quality
system is required to be built up such that effective and efficient products and services can be
offered to the customers. The quality system of the fast food chains can be easily summarized in
the form of an operation manual (Hitt, Carnes and Xu, 2016).
The consideration of all these points can ensure the effective implementation of the
manufacturing excellence in the fast food chains.
Relationship between Profitability and Quality of Service
There is a strong link between the quality of service and profitability in the fast food industry.
The focus of the fast food restaurants is on providing the best services to the customers for the
purpose of growing and sustaining in the competitive market for a longer period of time. The
main aim is to improve the service quality in order to enhance the satisfaction level of the
customers. In the fast food industry, customer satisfaction can be achieved when proper
assistance offered by the employees when needed by the customers. There is a great influence of
service quality on the satisfaction level of the customers. Various innovative and improved
services are offered for this purpose by the fast food restaurants due to the advancement in
technologies and globalization (Boella, 2017). Furthermore, diverse range of services is provided
in order to remain competitive in the industry. Customer satisfaction is considered to be one of
the most important factor in every industry. There is a link of the satisfaction level of the

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customers with the service quality and profitability in the industry. When the service quality of
the restaurants is optimum, it enhances the satisfaction levels of the customers thereby affecting
their repurchase goals and behaviors. Moreover, there is high dependence of the revenues and
profits earned by the organization on the customer satisfaction levels. The customers are satisfied
only when the service quality of the fast food restaurants is good. The calculation of customer
satisfaction level is made with the help of the profitability and productivity levels of the
organization. In other words, there is a direct relationship between service quality and the
profitability of the fast food restaurant in the industry due to the increase in customer satisfaction
(Aftab, Sarwar, Sultan and Qadeer, 2016).
Current and Potential Operational Challenges in the Fast Food Industry
A central role is played by the operational managers in the stabilization of the policies and
procedures of the organization across the major business areas such as planning, finance and
technology. The current operational challenges in the fast food industry are related to the
maintenance of the right levels of inventory (Bendoly, van Wezel and Bachrach, 2015). When
the restaurant does not have a real time view of the inventory, it is less confident regarding
whether it will be able to meet the demands of the customers or not. Another operational
challenge in the fast food industry is associated with the maximization of production and
ensuring high quality of the products. Generally, when the restaurants maximize their production
levels for the purpose of meeting the demands of the customers, the quality of their products
reduce to a great extent. In this way, they are not able to satisfy their customers thereby leading
to loss of repeated customers. This, in turn, has a serious impact on the profitability of the
restaurants as well. The next operation challenge faced by the fast food industry is related to the
optimization of the inefficient processes. When the quality assurance processes of the fast food
restaurants become inconsistent, then the overall operational efficiency is severely affected.
There is a lot of food which gets wasted during the process of production. A lot of time is also
wasted by the IT departments on the maintenance of the hardware and software instead of
finding new and innovative ways for the completion of the processes. This also increases their
costs (Lee and Tang, 2017).

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The potential operational challenges in the fast food industry are related to increased costs due to
extended opening hours. The fast food industry is known for its operations outside the traditional
opening hours. The increase in the opening hours also increases the costs of lights, extra Wi-Fi
access, heating and security thereby leading to the additional costs for the businesses. Moreover,
with the passage of time, the waste and sustainability management is also becoming more
complex which, in turn, constitutes another potential operating challenge for the fast food
industry. Waste is the most important aspect of the fast food industry and is considered to be the
most expensive problems for these restaurants. There are strict regulations regarding the disposal
of waste, recycling and the separation of the waste items, etc. which are expected to become
even stricter in the future. Therefore, solid strategy will be required by the fast food restaurants
in order to deal with this challenge (Ravindran and Jaiswal, 2016). Moreover, the awareness for
the health and safety standards needed to be maintained by these businesses has made the
customers even more conscious. This has now emerging as the potential operational challenge
for the fast food restaurants. In case, if they fail to maintain the health and safety criteria, there
will be a risk of fine of huge amount and will lead to loss of their reputation as well ( Cao and
Kim, 2015).
Recommendation for Improving Service Operations
In the fast food industry, it is crucial for the restaurants to leverage the satisfaction level of their
customers which can be done only with the help of superior customer service. Following are the
recommendations which can be taken into consideration for the purpose of improving the service
operations in the fast food industry.
Quality Function Development (QFD) - QFD can be defined as the process of identifying the
factors which leads to the satisfaction of the customers and then incorporating them in the target
design of the restaurant. Customer wants that have been identified are- shorter time for delivery
of food, good taste of food served, fast order taking and good dining ambience. This can be
ensured by way of hiring more staff, providing appropriate training for performing the job faster
and improving the layout of the restaurant (Manzini and Di Serio, 2017).
Quality Management- Total quality management assists the restaurant in achieving excellence in
various aspects of the products and services which are integral to the satisfaction of the

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customers. The four continuous steps required to be considered for the purpose of continuous
improvement are Plan- Do- Check- Act. Furthermore, the service speed in the restaurant should
also be improved on regular basis (Prajogo and Cooper, 2017).
Layout- There should be accuracy in planning and executing design and layout for the purpose of
ensuring that the ambience along with the atmospheric elements in the restaurant becomes more
attractive, pleasing, peaceful and relaxing. It should further aim at building a good relationship
between the restaurant and the customers.
Human Resource Management- the restaurants should have staffing strategies in order to select
the right individual who can perform the job well. Furthermore, service operations can be
improved only when proper training and development is provided to the received staff such that
they can deliver high quality services in a friendly manner. Moreover, ethics should also need to
be observed by the staff in the kitchen in respect of its cleanliness, variety of food, etc. (Collings,
Wood and Szamosi, 2018)
Conclusion
Therefore, it can be concluded that fast food is the mass- produced food which is designed for
the purpose of commercial resale where strong priority is placed on the speed of service as
compared to the other relevant factors in the culinary science. The focus of this report was on the
fast food industry and the related consumer value proposition, order fulfillment process,
manufacturing excellence, operational challenges and recommendations. The application of
manufacturing excellence in the fast food industry can take place through the strategies like total
productive maintenance, job rotation, demand pull strategy, etc. The report assisted in coming to
a conclusion that there is a direct relationship between the quality of service and the profitability
of the restaurant in the industry. The challenges faced in the fast food industry are in rest of the
maximization of production, optimization of inefficient processes. The recommendation for
enhancing the service operations in the fast food industry are consideration of factors such as
quality management, quality function development, human resource management and layout.

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Alvarez, J.C. and Perry, C.M., 2015. Manufacturing excellence approach to business
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