Food Service Management: Approaches, Procurement, and Management Practices

This project report explores different approaches to food supply chain, principles of effective procurement, and management practices in food service organizations. It also examines Leon Restaurant's business model and strategies. The report provides insights into the application of analytical tools and strategies for successful business operations in the food industry.

Food Service Management

Contents
INTRODUCTION...........................................................................................................................1
Business model of Leon Restaurant Co.:.....................................................................................1
LO1..................................................................................................................................................1
P1 Examine a range of different food supply chain approaches within the food service
industry, highlighting key stakeholders in the process................................................................1
P2 Discuss the principles of effective procurement and sourcing processes for a food service
operation......................................................................................................................................3
LO2..................................................................................................................................................4
P3 Assess the application of different analytical tools to support effective management
strategies......................................................................................................................................4
P4 Evaluate different management practice that support successful business operations in food
service organisations....................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Food service management can be defined as the concept which includes management of all
the day-to-day operations of organisations and companies which offer food and other edible
products. In the following project report, an attempt has been made to evaluate the different
approaches of food supply chain and strategies used for effective procurement with an
organisational context of Leon Restaurant, a nutritional food joint established in 2004 in United
Kingdom. The report also aims to evaluate the use of various analytical tools in formulation of
strategies for food service organisations and determine various management practices for
ensuring success of business operations in food industry.
Business model of Leon Restaurant Co.:
Leon was founded in the year 2004 by John Vincent and Henry Dimbleby along with chef
Allegra McEvedy at United Kingdom. The restaurant company was started with a mission to
make it easier for everyone to eat healthy (Diabat, Govindan and Panicker, 2012). It became the
first company ever to display nutritional content on food symbols and was able to capture a huge
market share with its unique vision which was in complete alignment with the changing trends in
food consumption habits across UK. The company aims to develop better sustainable eating
habits in the people with the food products it has to offer. The company currently has more than
64 restaurants worldwide and generated revenue of $71 million in the year 2019. The business
model of the company presents a huge opportunity for growth considering the changing social
consumption patterns. Leon restaurant offers a wide range of fast food products with high
nutritional content which are healthy for consumption as well. The current strategies and
business model of the company has proved successful so far and the management of the
company has a vision for expanding the business venture of the company in many more
countries globally.
LO1
P1 Examine a range of different food supply chain approaches within the food service industry,
highlighting key stakeholders in the process.
Food supply chain can be defined as a process which describes the complete path of a food
product supply from a farm to the table of the guests. Major steps in the process include
production, processing, distribution of food, consumption and disposal at the end. Every food
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item which is being consumed reaches us through a particular process or chain in which the item
moves systematically from the producers to the consumers in a similar motion like that of
domino (Tian, 2016). At every stage or the steps in the process of food chain, human and natural
resources are required to improve the effectiveness and efficiency of the whole process.
Evaluation of different types of food supply chain is essential to maintain the safety and security
of the food items. Some of the major types or approaches to food supply chain can be understood
with the help of following discussion:
Direct Food Supply Chain: It is the most simplest form of food supply chain where only
three major stakeholders are involved which are the producer of the food product, a central
company or restaurant and the end consumer or buyer. Under direct food supply chains, the
restaurant or the company procures the food materials directly from the producer or the farms
and it results in maintaining the effectiveness of the process and mitigating of middlemen’s profit
and commission. Direct food supply chain ensures security and safety of food products due to the
minimisation of mediums or channels in the whole chain or process.
Extended Food Supply Chain: Under extended food supply chain, the food product passes
through the initial producer to a supplier who then passes on the products to the company from
where it reaches to the final consumer. As the name suggests, extended food supply chain is just
an extension of direct food supply chain where the number of stakeholders involved in the
process increases with more suppliers contributing in the chain. A supplier can also have another
supplier in the extended food supply chain approach. The effectiveness is measured with the help
of individual performance evaluation of all the stakeholders involved in the process.
Final Food Supply Chain: Final food supply chain can be referred as the chain where all the
members involved in the flow of food products, information, capital, funds etcetera are
considered as a part of food supply chain (Chkanikova, 2016). This is a very complex process
and often creates hindrance in the safety and security compliance of the food items due to an
increase in the number of stakeholders involves. Among the important stakeholders involved in
the process, financial service providers, logistics manager and market researchers also play an
important role in ensuring the effectiveness of the whole food supply chain.
Direct and Extended approaches of food supply chain are considered to be the best approach
for the managers of Leon Restaurant after taking into objective the business model and vision of
the company which aims to make it easier for people to eat healthy. Increasing the level or stages
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in the chain only results into a difficulty in managing the overall quality and safety standards of
the food products which the management of Leon Restaurant should refrain itself from. Direct
Food Supply Chain is arguably the best approach for the company for meeting the quality
standards of its food products.
P2 Discuss the principles of effective procurement and sourcing processes for a food service
operation.
Procurement can be defined as the process by which an organisation meets its material
requirements and needs with the help of different strategies aimed at increasing the overall
effectiveness of the process. Increasing the effectiveness of procurement strategy helps an
organisation to enhance the overall operational process since material is the basic input upon
which the quality of output depends (Rothaermel, 2016). The quality of products which are being
offered by the company depends on the input or raw materials which determines the operational
efficiency. Some of the most important and relevant principles of effective procurement and
sourcing within the food operations which are being considered by the management of Leon
Restaurants are as follows:
Value for money: Value for money as a principle of effective procurement strategy is being
followed by the management of Leon Restaurant which implies that every company should
undertake an analysis of the quality of products which are being offered by the supplier and
compare it against the prices being demanded to determine the value for money which the
company is deriving (Dobbs, 2014). Increasing value for money during the procurement stage
gives company the leverage of offering food products with better quality to customer which
increases the overall effectiveness of the operations.
Sustainability: The management of Leon Restaurant focus on sourcing sustainability as an
important principle or procurement strategy. Sources which are being used for procurement of
materials should be sustainable and create a better impact on environment. Principle of
sustainable sourcing helps a company to improve its sustainability standing and improve the
effectiveness of business operations also.
Supplier check: It is important for the managers of Leon Restaurants to ensure the capacity
of the suppliers to provide goods and food materials of premium quality. Maintaining a positive
relationship with suppliers who have credibility and are reliable helps the managers of Leon
Restaurant to maintain a competitive edge in the market.
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Transparency: Maintaining transparency in the procurement and sourcing operations is
another important principle which is being followed by the managers of Leon Restaurants to
provide a competitive edge to the company. Providing and conveying important information
regarding the sources of food supply to the customers help the company to gain trust and
confidence of consumers which improves the effectiveness of business operations. Spreading out
information about sourcing from a credible supplier helps in improving the goodwill of the
restaurants.
LO2
P3 Assess the application of different analytical tools to support effective management strategies.
Porter’s Five Forces Model:
There are various business tools which have been developed for the managers of business
organisations to develop effective strategies and monitor business operations. An analysis of
Porter’s five force model helps a manager to determine the competitive position of an
organisation in the industry which helps in providing direction for future business strategies
(Lichtenberg, 2012). Here is an analysis of Porter’s five force model for Leon Restaurant
Company:
Bargaining power of customers: Bargaining power of customers is very high in food
industry since the cost of substitution is very low or negligible and there are many options
available for any customer of food products to choose from. Thus, the managers of Leon
restaurant need to be attentive price rises since the slightest of change in price can result into a
huge impact on the effective demand.
Bargaining power of suppliers: Bargaining power of suppliers is low in case of food
service organisations because of many suppliers present in the industry and switching costs being
negligible or very low for business organisations. A low bargaining power enables the managers
of Leon Restaurants to dominate the suppliers and procure the best quality material at
competitive prices.
Threat of substitutes: The products which are being offered in food industry have a number
of substitutes which are easily accessible and available. The threat of substitution is high in case
of food service organisations for example an increase in the price of coffee would lead to a
consumer shift to tea and other substitutes.
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Threat of new entrants: During the past few years, the number of business organisations in
food industry has increased sharply and more and more food stores are being establishes which
poses a high threat of new entrants in the industry. The managers of Leon Restaurant have to
formulate policies to attract a customer base which helps the company to maintain its position in
the industry.
Competitive rivalry: Competitive rivalry refers to the level of competition in any industry,
There is an intense and stiff competition in the food service organisations due to which regular
use of sales promotion tools and price-wars have become frequent. Competitive rivalry is a high
force for the managers of Leon Restaurant and there is a need to strategically plan and reduce the
level of competition by product diversification and distinguishment.
On the basis of above analysis, it can be concluded that there is an immense amount of
competition in the food industry and the customers have a high bargaining power which puts the
food service organisation in a position where the managers have to continuously form strategies
for increasing the effectiveness of business operations and gaining a competitive edge in the
market. This tool helps the managers of Leon Restaurants to formulate better strategies with
clear goals and objectives.
P4 Evaluate different management practice that support successful business operations in food
service organisations.
Managers of Leon Restaurant follow different practices which helps the company to remain
successful and effective in its business operations. A few of the practices which are being
followed the managers in food service organisations to increase effectiveness are:
Clarity of objective: Having a defined and clear objective is one of the most important
practice being followed by the managers of Leon Restaurant to increase the effectiveness of
business operations in the food service organisations. The company has a goal of making it easier
for people to eat healthy and adopt healthy eating habits which helps the management to take
operational decisions with a vision of achieving that goal. By staying committed to the vision
and mission of the company, the managers are able to enhance the effectiveness of business
operations and decision-making (Yu and Nagurney, 2013). Any decision or operation which is
not contributing in any way to achieve the vision and objective of the company needs to be
replaced or altered to improve the overall effectiveness and success of business operations.
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Rewards and Incentives: Workers and employees are an important part of any business
organisations and to increase the effectiveness of overall business operations it is imperative to
maintain a motivated and dedicated workforce. The managers of Leon Restaurant motivates its
workers by offering various rewards and incentives which are directly linked with the
performance and productivity level of the employees. Motivated workers are able to provide
better service to the customers particularly in food service organisations and restaurants where
the quality of in-house dining service received by the customer is a major determinant of
customer satisfaction. Improving the customer satisfaction helps the company to improve success
of business operations.
CONCLUSION
It can be concluded from the above project report that food service management is an
important task for the managers of Restaurants and food service organisations. It has been
observed that there are many approaches to food supply chain management such as direct supply
chain or extended chain with each having its own merits and demerits. Various strategies used by
the managers help in effective procurement and sourcing of materials for food products (Aung
and Chang, 2014). Tools such as porter’s five force analysis helps the manager of food service
organisations in better strategy formulation. At last it can be concluded that various management
practices such as having a clear objective helps the managers of food service organisations to
maintain successful business operations.
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REFERENCES
Books and Journals
Aung, M.M. and Chang, Y.S., 2014. Traceability in a food supply chain: Safety and quality
perspectives. Food control. 39. pp.172-184.
Chkanikova, O., 2016. Sustainable purchasing in food retailing: interorganizational relationship
management to green product supply. Business Strategy and the Environment. 25(7).
pp.478-494.
Diabat, A., Govindan, K. and Panicker, V.V., 2012. Supply chain risk management and its
mitigation in a food industry. International Journal of Production Research. 50(11).
pp.3039-3050.
Dobbs, M.E., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review.
Lichtenberg, A.L., 2012. A historical review of five of the top fast food restaurant chains to
determine the secrets of their success.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Tian, F., 2016, June. An agri-food supply chain traceability system for China based on RFID &
blockchain technology. In 2016 13th international conference on service systems and
service management (ICSSSM) (pp. 1-6). IEEE.
Yu, M. and Nagurney, A., 2013. Competitive food supply chain networks with application to
fresh produce. European Journal of Operational Research. 224(2). pp.273-282.
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