Operations Management in Fast Food Service Industry

The report evaluates on the operational management function of fast food service industry and further illustrating their association to process of decision-making and value chain. It also discusses the scope of operations management, factors influencing production/operations management, hierarchy of value chain decisions, significance of supply chain collaboration and Hungry Jack’s operating model.

Running head: OPERATIONS MANAGEMENT
OPERATIONS MANAGEMENT
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1OPERATIONS MANAGEMENT
Introduction
The competence level of every organization to generate profit and develop sustainability
in this competitive globalized market revolves around its level of skill and ability to execute its
operational performance in effective manner (Seuring, 2013). Though the term Operations
Management has undergone a significant industrial revolution in recent times, it is identified as
an effective approach for executing various resources within an organization (Lovelock &
Patterson, 2015). Operations Management is further identified as a systematic approach which
aims to address critical areas of issues vital to the developmental process which tends to alter
some inputs into output which are constructive and can further attain greater amount of revenues
for the organization. As the principle situation for a business enterprise is to attain a combination
of supply and demand, obtaining excess rate of supply or surplus capacity results to be wasteful
or costly. While operations function has been considered to be accountable for producing
products or delivering services, such a systematic approach necessitates the support and input
from other areas of the organization (Dahlgaard et al., 2013). It has been observed that operations
has been responsible for dependable on the production of goods and products and further
providing the services offered by the organization.
Hence, the efficient approach of operations management has been identified as a
management system of processes which create goods or product services. It is further to note that
operations and supply chains have been intrinsically associated and no significant business
enterprises have their existence without the both (Christopher, 2016). A supply chain is
identified as a sequence of organizations comprising of facilities, functions and business
operations which are associated with the production and service delivery (Mellor, Hao & Zhang,
2014). The report evaluates on the operational management function of fast food service industry

2OPERATIONS MANAGEMENT
and further illustrating their association to process of decision-making and value chain. In
addition to this, the paper will explicitly evaluate the theoretical aspects and methodologies
integrated in the decision-making in operations process planning and further intend to assess the
role of operation management in the strategic management of organizations pertaining in fast
food sector of Australia as well as the supply chain procedures of the organizations.
Scope of Operations Management
It is important to observe that the extent of operations of management constitutes an array
of people who are engaged in the process of product and service design along with excellence
improvement of the organizations’ product and service range (Seuring, 2013). Operation
management primarily incorporates several interrelated activities such as forecasting, capacity
evaluation, managing inventories and further strategizing areas to locate facilities and services
(Osborne, Radnor & Nasi, 2013). The operations functions primarily comprises of all actions
which are directly associated in goods and service delivery thus has its significance in both
manufacturing operations such as goods-oriented and in areas dealing with food handling and
retailing as service-oriented (Christopher, 2016). As fast food delivery sectors continue to
sustain, several business enterprises have been compelled to establish advanced and unique
technologies and mechanisms in order to integrate operational facilities and marketing efforts
within the business activities (Hungry Jacks, 2018). Consumers in this globalized era have been
showing higher degree of inclination and preferences towards convenience of food being
delivered in accordance to their expediency and ease (Carroll & Buchholtz, 2014).
Thus it has been critical for fast food service sectors of Australia as well as other nations
to ensure that these business enterprises attain or surpass the vital demands associated with their

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significant marketing initiatives (Osborne, Radnor & Nasi, 2013). However, such approaches are
only effective if marketing and operations system have successfully incorporated which further
tends to condense the delivery estimated time and expectancy of the companies (Lee, Kao &
Yang, 2014). Furthermore, the adoption of this approach has been identified to be constructively
been integrated with the level of development of general performance with a greater degree of
operational efficiency along with improved financial outcomes (Bon & Mustafa, 2013). It has
been observed that such constructive and effective association tends to elevate the growth of
manufacturing sector when managers utilize a reward system that is based on the operation
management outcomes (Hill, 2017).
Factors influencing Production/Operations Management
Source: (Soroudi & Amraee, 2013)

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Factors of Operations management pertaining in Varying Industrial Sectors
It has been noted that several fast food delivery enterprises in Australia have developed
the knowledge and awareness of executing complex strategic approaches of evaluating the
importance of integrating procedures of receiving telephone orders and efficiently delivering
orders on the estimated time (Osborne, Radnor & Nasi, 2013). The first challenge identified by
leading fast food chains has been related to the logistic services whereby the food ordered must
be delivered to its consumers within the estimated timeframe (Christopher, 2016) . As their
marketing communications signify, the delivery window utilized by global fast food chains
generally determine from 30 to 45 minutes. It is important to note that the more critical the
estimated delivery time is generated; companies tend to encounter greater degree of challenge.
Thus, the primary purpose of a fast food delivery service relies on the provision of a broad range
of consumer services without the significance of offline services (Lovelock & Patterson, 2015).
This not only raises an area of consumer convenience and ease, but further poses areas of
operational challenge for the organizations (Hill, 2017). As operational functions primarily
incorporates certain consistent activities associated to forecasting, competence planning, assuring
quality services, such systematic approach of airline industry reveal a propensity to comprise
airplanes, airport facilities along with maintenance services that tend to expand over a vast range
of territory (Christopher, 2016).
Companies manufacturing sectors such as PowerSki, initiate to perform similar essential
functions in order to transform resources into finished or refined goods.Furthermore, to execute
such functions in globalized, manufacturers must significantly endeavour to develop the level of
operational efficiency (Belekoukias, Garza-Reyes & Kumar, 2014). The manufacturing industry
thus requires refurbishing their production procedures to emphasize on the quality and to sustain

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material and labour expenditures and eliminate all costs which have been incompetent to
increase the value of the finished products. The systematic approach of operations management
can be grouped as follows:
 Production planning- During this planning procedure, the role of operations
management is to ascertain the methods applied for the production of goods, location of
production and the approaches through which such manufacturing facilities will
effectively be executed.
 Production control- It is important to note that once the production process is executed,
operation management persistently aim to schedule as well as regulate the activities that
formulate such processes. Furthermore, they must solicit and show responsiveness to the
evaluation process and amend the required changes and alterations. At this stage, the role
of operation management is dependent on raw material purchase along with the handling
of inventories (Juan Ding et al., 2014).
 Quality control- At the final stage, such systematic approach shows direct integration in
the efforts to guarantee that goods are produced in accordance to specification and quality
standards are maintained.
Operation Management’s Association with Decision-Making Procedures and Value Chain
It has been posited by Golicic & Smith, (2013) that value chain integration decisions
must be executed in terms of the value chain decision hierarchy which primarily deals with
Strategic, Tactical and Operational levels. Furthermore, assimilation at the tactical level is
implemented through the means of various forms of associations like ownerships, mutual
endeavours, long term purchase which can further be attained by integration, invasions, mergers

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and other forms of acquisition. Tactical and operation involvements important for value chain
integration resulting to the development and value of the value chain process (Lovelock &
Patterson, 2015). Furthermore, erroneous decision making processes based on the form of
relationships between associates could develop critical interruptions and will rapidly erode the
vitality of stakeholder base (Kim, Li & Brymer, 2016).
Hungry Jack’s being one of the prominent fast food delivery companies in Australia and
across the world attains a domestic market leadership in Australia and further comprises of
multi-location diversified product profile (Garcia Martinez et al., 2014). The company being one
of the prominent players of the fast food service industry comprises a revenue rate of over 3
billion ASD, and being one of the renowned business enterprises in Australia. The company has
been immensely incorporated and further owns and drives sources of the major section of its
critical inputs as well as utilities. However, it has its reliance on external associates for provision
of products and key mechanisms of production costs. It is important to note that value has
developed an understanding whereby it is evaluated by the total returns and income as a
reflection of the price an enterprise’s product as well as the number of units it can advertise or
use for trading purposes (Juan Ding et al., 2014). Furthermore, it has been noted that a business
enterprise tend to attain higher rate of revenues and productivity if the value that has been
executed exceeds the amount of expenditure involved in generating the product (Thornton, Lamb
& Ball, 2016).

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Hierarchy of Value Chain Decisions
Source: (Bosona & Gebresenbet, 2013)
As value chain has been regarded as an activity which elevates the market form and
whereby in globalized industry, there has been a significant need for fast food delivery service
sectors in order to maximise the importance of every process operated within the business. As
value chain management system (VCM) aims to concentrate at significant steps ranging from
raw material or suppliers’ use to customers and lastly the end users, the primary goal is
dependent on the maximum delivery of value to the end users at the minimum total cost
(Velasquez & Hester, 2013). However, this results the supply chain management to develop into
a subset of the value chain study whereby the process of value chain notion constitutes varied
centre of attention and a broader domain (Thornton, Lamb & Ball, 2016). In the globalized era
with high degree of competitive milieu, strategy is no longer identified as a factor of positioning
an established set of actions along with the conventional industrial model that is the value chain
(Kim, Li & Brymer, 2016). However, it has been observed that prominent business enterprises

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specifically in the fast food delivery sector tend to reinstate the system of value chain rather than
only adding value to it.
Essential strategic role of value chian process is noted to reconfigure significant roles and
associations among a vital network of buyers-suppliers or distributors to organize the formation
of importance by emerging network of players in the market (Garcia Martinez et al., 2014).
Thus, a company’s strategic task develops into the persistent reconfiguration as well as
integration of its competencies and clientele base (Battistoni et al., 2013). The rate of success of
fast food service sector has been immensely dependent on the strength of its weakest supply
chain partner. However, only through integrated collaborative linkages through the entire supply
chain companies can significantly attain the benefits of cost reduction as well as revenues
enhancing behaviours (Juan Ding et al., 2014). Implementation of effective supply chain
management in the fast food delivery sector has demonstrated potential valuable approaches of
sustaining competitive advantage. Furthermore it serves in developing organizational
performance as competition in such a globalized era no longer exists among organizations but
has been persistent among a range of supply chains (Epstein, 2018).
Significance of Supply Chain Collaboration
The consumer-seller relationship in particular in the fast food service sector in Australia
has shifted its focus beyond individual business enterprises in the value chain which delivers
value to the segment of end consumers (Jie, Parton & Cox, 2013). A broad range of managers
have been initiating endeavours to develop vital collaborative alliances with other business
enterprises specifically competitors. However, such strategies generate utmost complexities in
the process of implementation as they reveal high degree of inability to succeed. Dabbene, Gay

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& Tortia, (2014) claim that Hunger Jack’s being one of the prominent market leader in fast food
online delivery, has been encountering new competes with both local as well as diverse global
enterprises such as Red Rooster and Pizza Hut. These factors have been primarily dependent on
product, service speed and quality along with technical expertise and price (Hungry Jacks, 2018).
Thus, in order to sustain its competitiveness, Hungry Jack’s must invest in developing effective
digital competence and data analytics to distinguish itself from its toughest competitors in order
to attain the increasing rate of desires and expectations of the customer base (Bosona &
Gebresenbet, 2013).
Hungry Jack’s Operating Model
Hungry Jack’s technology preferences in recent times have improved the value which
customers derive from the service delivery of the company. There can be witnessed several
operating model types which have facilitated the business of Hungry Jack’s to deliver its
customer promise of convenience, timely estimated delivery along with high rate of transparency
and economical price range (Velasquez & Hester, 2013).
 In-House E-Commerce Ordering Platform- The rate of expediency of the digital or
highly advanced ordering procedures has been critical to the customer base of Hungry
Jack’s and further is considered to be essential for the long-term success of the company.
In 2015, an estimated value of 50% of Hungry Jack’s US sales has been generated from
digital orders which have been higher in comparison to its other competitors in the global
market (Hungry Jacks, 2018). Furthermore to ensure the rate of sustainability and
continual growth of digital orders, certain fast food service delivery companies along
with Hungry Jack’s made strategic decision in order to aid in the internal e-commerce

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ordering domain (Chai, Liu & Ngai, 2013). This distinctive platform enables the modern
customer base with an online profile to place orders within minimum timeframe and
further enhance its order time as well as overall time. This e-commerce initiative of this
industry has proficiently enabled order ETA (estimated time arrival) tracking system and
the delivery updates which provide greater degree of transparency (Juan Ding et al.,
2014).
 Mobile Applications- In recent times, to sustain a competitive advantageous position in
the globalized market, Hungry Jack’s have launched mobile applications for gadgets like
smartphones and tablets in order to capture the elevating rate of tech savvy users for
seamlessly placing orders on their smartphones (Garcia Martinez et al., 2014).
Furthermore, 2014 has witnessed the company to launch other significant platforms to
capitalize on the increasing personalization services which further aids the consumers to
undergo every vital digital experience (Chai, Liu & Ngai, 2013). Furthermore, by
involving system of personalization, Hungry Jack’s, Pizza Hut and Domino’s Pizza has
been immensely successful to cater a major proportion of millennials or ‘Gen Z’, further
enhancing the product services by establishing higher level of network influence
(Velasquez & Hester, 2013).
 Integrated Point-of-Sale Technology System and Vertically Integrated Supply
Chain- Finally, fast food enterprises like Domino’s Pizza and Hungry Jack’s have
invested considerably in optimizing the level of operational efficiencies in order to
decrease the costs or expenditure rate and further enable these organization’s to offer an
affordable and economical products to its end purchasers (Thornton, Lamb & Ball, 2016).
These companies have further introduced an integrated POS system in order to enhance

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the coordination system persisting between its franchisees and the corporate unit and
further to reduce the error rates which occurs during the execution of business operations
(Soroudi & Amraee, 2013). In addition to this, it has been observed that Hungry Jack’s
has been vertically integrated dough manufacturing and supply chain systems which aims
to improve the quality as well as consistency level of the products and facilitates these
organizations to leverage economies of scale in order to focus significantly on store
operations and customer services (Garcia Martinez et al., 2014).
Scope of Operation Research in Decision Making
Industrial sector has been implementing certain research (OR) techniques to purchase,
substitute as well as reorganize the most significant advantageous policies. However, these
techniques have involved certain location and manufacturing size of retail outlets, factories and
warehouses and to merge the products and selection of most effective employee base for the
companies and the assigned roles (Garcia Martinez et al., 2014). The process of OR has
effectively been implemented in several areas of observation and thus has been identified as a
proficient mechanism (Soroudi & Amraee, 2013). This further helps to elevate the efficiency
level of the management decision making procedures. Comprehensive method of operation
research has been utilized in order to develop the awareness and further pose explanations of the
phenomena of operation management (Soroudi & Amraee, 2013). Thus such a systematic and
comprehensive approach has been useful in certain significant domains.
 In Economy- It has been noted to be significant for every government to execute a systematic
planning and strategy for the economic progress of the nation where the company has been
operating (Garcia Martinez et al., 2014). Thus, the country must initiate utmost competence level

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and be prepared to encounter the economic emergency by implementing the operational
investigation research which can establish the profit plan. It is further to apply in order to raise
the rate of per capita income by using the limited recourses (Juan Ding et al., 2014).
 In corporate house and business- It is important to recognize that certain experiences of the
industry implement decision making procedures by developing knowledge from previous
experiences of the industry (Juan Ding et al., 2014). Thus application of vital operational
techniques to businesses generates appropriate decisions about the proper utilization of limited
resources of capital, revenues and other resources of the production.
 In promotion and selling of the product- Operation research techniques aid the marketing
executives to execute decision making where organizations will establish their product range, the
approaches they would introduce to transport the product at economical rate (Garcia Martinez et
al., 2014). Vital OR techniques further helps in the decision making procedures related to the
price of the commodity, requirement of stock as per the future demand of the product (Thornton,
Lamb & Ball, 2016). Furthermore, the appropriate OR methods can facilitate the organizations to
ascertain that there can be an appropriate choice of advertise media as per cost limitation.

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Operation Research in Decision Making
Source: (Velasquez & Hester, 2013)
In the decision making and planning procedures are implemented to prepare certain
alternative solutions of logistics support whereby vital options can be used in order to assess and
evaluate certain business outputs. Furthermore, Supply Distribution Module aims to provide tow
vital outputs whereby one of them is identified as an indicator of inventory when other inventory
elements do not constitute on the Zero level (Garcia Martinez et al., 2014). Supply Distribution
Model further can be utilized as a vital support mechanism for planning as well as decision
making process in the phase of preparation operations as well as during executing operations.
Certain optimization effort gas been identified as a logical outcome of efforts which have been
more efficient while spending resources especially in financial areas and working time (Juan
Ding et al., 2014).
Conclusion
It can therefore be concluded that with the rise of competitive industrial sector has led to
the importance of operation management for fast food business enterprises operating in the fast
food industry in Australia. Thus, operation management executions have been immensely
relevant for the performance growth of these organizations. This has not only facilitated a
distinctive contribution for the diffusion in business clusters by further introducing advanced
forms of policies and legislatures. The report explicitly evaluated the critical factors associated to
the role of operational management in varying industrial sector by assessing its relationship to
the process of decision-making and supply value chain. The paper in addition to this have
explored the way effective supply chain management has been facilitating the performance and

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business operations of some of the prominent organizations in Australia namely Hungry Jack’s,
Domino’s Pizza and other fast food delivery organizations.

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