Resource Allocation and Strategic Risk Analysis for Subway Operations

This report provides a comprehensive analysis of Subway's operations management, focusing on resource allocation and strategic risk analysis. The report begins with an introduction to operations management and its importance, followed by a detailed examination of Subway's resource allocation plan, including financial, human, and technological resources. It outlines strategies for supporting resource allocation, such as training and development, capital budgeting, total quality management, and just-in-time inventory management. The report then applies the VRIO and McKinsey models to evaluate Subway's internal capabilities and management structure, identifying strengths and weaknesses. The report also includes strategic risk analysis to assess potential challenges and their impact on Subway's operations. Overall, the report offers valuable insights into optimizing Subway's operational efficiency and mitigating potential risks.

PRINCIPLES OF
OPERATIONS
MANAGEMENT

Contents
INTRODUCTION...........................................................................................................................1
TASK 3............................................................................................................................................1
P7. Preparation of a Resource Allocation Plan............................................................................1
TASK 4............................................................................................................................................6
P8. Devising and Carrying out an SRA for Subway....................................................................6
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Operations management is an operation of management which is mainly concern for
planning, designing and controlling the process. Consideration of this aspect within the
organisation is essential in terms to enhance performance and attain business objectives. This
following assignment is based on Subway and it is an extension of Part One, that defined
operation management and its activities. This report focus on considering effectively allocation
of resources for operations management and strategic risk evaluation on operations functions of
the organisation (Kuei and Lu, 2013).
TASK 3
P7. Preparation of a Resource Allocation Plan
Resource allocation depicts to an effective process which is espoused by an organisation
in order to assign all the resources or assets of in an effective so that accomplishment of
organisational objectives and requirement can be ascertained. This plan will cover all the
tangible assets which has possessed by an organisation which helps them in appropriate
allocating right resources to the right operation (Tieman, van der Vorst and Che Ghazali, 2012).
In regards to Subway, company is carrying out various operational activities like location
Strategy, manufacturing, quality management, supply chain management and advertising.
Therefore, some requirements are arising due to these activities which need to be considered by
organisation. In this aspect, resource allocation plan for the organisation is given beneath:
RESOURCES REQUIREMENT TASKS STARTING
DATE
DATE OF
PROJECT
END
Financial
Resources
Manufacturing In order to operate all the
manufacturing activities
prominent funds are required to
ensure effectiveness of each
activity. Therefore, these
resources needs to be allocated
appropriately as it would help the
firm in carrying out all the
12nd June,
2020
10th
September,
2020
1

production activities
significantly.
Human
Resources Infrastructure
This is the foremost requirement
of a firm which define about its
infrastructure that will give
contribution in location strategy.
In this, HR department will give
their emphasis on searching
spectacular location where they
can build building of Subway
(Sampso, 2012).
10th
December,
2019
20th
July, 2020
Artificial
Intelligence
Technology
Quality
This is the most essential
requirement of a company so as
to maintain quality of food
management, packaging,
delivering and customers service
operations, Subway can use this
resource effectively in terms to
bring perfectionism in their
operations.
20th August,
2020 -
Transportation Logistics This is most operational
requirement of Subway as it is
required raw material on daily
basis and supply its finished used
to end customers. An effective
transportation medium would
18th August,
2020
-
2

help the firm in maintaining
supply chain which is suitable as
per the time and appropriate
logistics and inventory supply.
Strategies for Supporting Resource Allocation Plan along with its critical analysis
A range of strategies are available in this context which needs to be acquired by the
company that would assist them in effectively implementing resource allocation plan and
increase efficiency of organisation. In this aspect, various strategies are describing below: Training and Development: This is considered as one of the most important strategies for
accomplishing the requirement infrastructure is training and development. The employees
who are indulging in development of infrastructure needs effective training and
development programs with the help of several techniques and methods like simulations,
that will assist them in carrying out all the activities related to handle all operations
related to develop a significant location strategy (Abaunza and et. al., 2015). This
strategy has huge significance for the organisation as it will increase the motivation,
production and competence level of employees which help the Subway organisation in
developing their infrastructure and fulfilling the operational requirement. In order to get
higher efforts of employees, organisation must give their focus on adopting most suitable
learning style for everyone as each personal is different in their own way due to which it
becomes essential to make proper flexibility within the firm. Capital Budgeting: Consideration of this strategy is essential for the organisation as it is
related to maintaining financial resources of the company to carry out all manufacturing
activities significantly. This will help the company like Subway in determining all the
assets like machinery, product development etc. to operate all the functions optimally.
This will also help them in eliminated all unnecessary resources so that smart investment
decision can be made. The main advantage of this strategy is that it will identify all the
risk which is associated with investment opportunities which enables the organisation to
come up with best decision to regulate appropriate manufacturing activities (Vejrum
Wæhrens, Cheng and Skov Madsen, 2012). However, in case if the proper assessment
will not conduct then the wrong application of decision might be taken. Due to this, it is
3

essential for organisation to analyse risk first and after that they should make decision
related to conduct all the manufacturing operations. Total Quality Management: It is the most effective strategy which needs to be adopted by
the firm to maintain their quality. This strategy is mainly concern for espousing
appropriate processes and methods which would keeps up consistency within the firm. It
is very beneficial for the Subway organisation as with the help of this they can deliver
quality products and services to their consumers that are nucleus requirement of
organisation. But it has some disadvantage also as it might happen that company needs to
adopt those methods, techniques and equipments which incur higher cost for the firm.
Due to this, before possessing any of the method it is essential for an organisation to
evaluate several alternatives on the basis of cost and quality so that they can choose a
most effective process for themselves (Andradóttir, Ayhan and Down, 2013).
 Just-In-Time Inventory Management: This is known as inventory management technique
which will help Subway organisation in making their supply chain strong. It will also
help them in accomplishing logistics requirements with the help of quality that would be
needful for a firm, which would help them in maintaining their time and efforts of
grooving more transportation channels. The main benefit of this, it will reduce the cost
and give assurance of maintaining appropriate relations with supply chain management.
But this method also consist disadvantage as Subway is a fast food outlet, so that it does
not required for them to utilise set quantities, as because they it has higher demand in
weekends and throughout the day. Thus, organisation needs to acquire effective methods
and techniques which help them in maintaining proper level of stock to provide effective
service to their customers.
VRIO MODEL
VRIO model can be explained as the framework which helps to find out the capabilities
of an organisation through which company can take additional advantage in the market. It is said
that any of the organisation most have the knowledge about their strength and weaknesses so that
goals can be easily achieved within the specific time period. While talking about Subway, VRIO
will be one of the model which will explain that how future changes can be adopted by knowing
the main internal capabilities of a company. There are four different area which are mainly
focused in it which is explained below.
4

 Valuable: This is the stage where company is required to find that the resources which
they uses really add on the value to organisation or not. It is one of the way through
which any of the threats can be dealt easily. In context of Subway, it can be easily said
that the value which they add on to their organisation can be easily adopted by the rivalry
firm to give strong competition in future period of time. If company wants to take more
advantage from the market then they are needed to ensure that they will bring value to
their resources so that it becomes different for other to copy.
 Rareness: In simple words, Subway doesn't have the rareness in their product and
services as it can be easily adopted by other organisation. But, the brand image which
they have maintained in the market is one of the way which can help to say that rareness
is still available in their services and products.
 Imitability: The concept which are being used by the business organisation like Subway
are not that imitable because their resources can be copied at any period of time. This is
can create negative impact on the working condition of the company.
 Organisation: Although, the products which are being sold by the Subway are not that
important but still it is necessary to understand that the resources which they uses helps
them to attain any of the goals. In simple words, the available resources are helping the
company to perform any of the work at a greater platform.
McKinseys Model
McKinseys Model is a business model which simply explains that internal factor of a
business organisation must be managed in a systematic manner in order to ensure that required
objective can be achieved in specific time period. This model is based on internal factors which
are simply categorised into hard and soft elements. While talking about the Subway, it is the
model which can help them to manage their work in a systematic manner which will directly lead
to accomplish the target. Discussion about the elements are mentioned below:
Hard Elements
 Strategy: It is the first element of the model which explains that proper strategy plays the
crucial for the business organisation to attain the target. In context of Subway, their
management is required to make the proper strategy where they must focus that how they
can provide the better quality of product in the market so that goals can be achieved.
5

 Structure: It is needed be understood that organisation structure plays the crucial role
because it helps to decided whether goals can be achieved or not. Talking about Subway,
they are one of those business organisation where they follows divisional organisational
structure. This strategy simply helps to expand business activity which takes
organisation near to their mission and vision.
 System: It is necessary to be understood that company must have a proper plans and
procedure so that they can work as per the systematic manner. For Subway, it is
necessary for them to understand that must monitor each and every activities which are
being conduct by the staffs so that future improvement can be done easily.
Soft Elements
 Shared Values: In soft elements, it is necessary to be understood that shared values plays
the crucial role in the organisation because it discusses about the culture and ethics being
followed in the organisation. Talking about Subway, their management is required to
ensure that they will treat each and every employees equally so that customers can be
given proper services.
 Style: Subway can take the help of transformational leadership style which will give idea
to the leader that how they are required to react in any of the situation. This will allow
company to attain their targets which facing any of the problems.
 Staff: It is needed to be ensure within the business organisation like Subway that they
provide the appropriate training to their employees which can allow them to perform their
task specifically.
 Skills: It is necessary for the company like Subway that they must use proper skills
within their work because that is the only way they can provide the appropriate services
to their customers which they requires while connecting with the company.
TASK 4
P8. Devising and Carrying out an SRA for Subway
Strategic Risk Analysis (SRA) depicts to proper evaluation of certain risk which might
create hindrance in taking all the strategies and operations in a significant way. Screening of this
is highly essential as it will help the company in making some effective plans which would
6

reduce the negative impact of these factors and can enhance organisational performance (Vom
Brocke and et. al., 2014).
Even so, in context of Subway, the Strategic Risk Assessment is defined below:
RISK SEVERITY RESPONSIBILITY CONSEQUENCES AREAS
AFFECTED
Equipment
Failure HIGH Quality Manager
The penalty or
consequence of
equipment failure will
direct affect the
production process and
quality of products.
Also, it will create
lower productivity and
can create hurdled in
providing safety to the
employees.
R&D and
Manufacturing
Department
Changes in
Supply Chain
Regulations
MEDIUM Inventory Manager
The main influence of
these has on the supply
chain management and
also experienced by
logistics.
Logistics
Department
Employee
Disloyalty
LOW HR Manager Marketing,
Sales and
Manufacturing
7

Divisions.
These all the above mentioned risk can create various disadvantages for the company. Also, it
can develop several complexities at the time when the need to operational requirements required
to be accomplished. Subway’s strategies and functions also could experience drawbacks while
making efforts in achieving organisational goals and gain competitive advantage (Hick, Hanfling
and Cantrill, 2012).
Contingency Plans:
However, it is essential for the company like Subway to formulate and implement various
contingency plans in a well manner, which will help them managing, handling and minimising
risk which is attached with the functions of company effectively. Here is defining contingency
plan for Subway which is defined below:
RISK STRATEGIES / ACTIONS PERSON IN-
CHARGE TIME FRAME
Equipment Failure
In terms to effectively tackle the
risk of equipment failure,
organisation can adopt in-house
testing which would help the
organisation in increasing scope
of their performance by using
equipments and tools of the
firm.
Quality
enhancement
Manager
2 Months
Changes in Supply
Chain Regulations
The organisation must give their
emphasis on making appropriate
relationship with supply chain
management so that any kind of
negative impact cannot
experience while adopting
changes. Along with this,
Public Relations
Manager
5 Months
8

suppliers also require to
formulate on contractual basis so
as to maintain proper
authenticity in supply chain
management.
Employee Disloyalty
It is essential for the
organisation to monitor each and
every employee performance in
order to motivate them to adhere
an ethical framework so as to get
their higher efforts.
HR Policy
Manager 12 Months
Therefore, these above contingency plans will give huge support and guidance to the company,
which will help them in minimising the risk which are linked with the functions of the firm
(Ponsignon, Smart and Maull, 2012).
Strategies and Justifications:
These above described strategies are very appropriate for the company in order to ensure
effectiveness within the organisational functions by reducing risk from operation of the
company. Therefore, it is required to justify all the strategies at specific level which are
described beneath:
Monitoring (Operational Level): This is considered as one of the most effective strategy which is
effectual in making proper monitor on the performance of the organisation. It is very beneficial
at operational level as it will help in bringing stability in regards to carrying all the operational
functions in an effective manner. Along with this, monitoring also would helps in enhancing
sustainability in the functions of the organisation and developing effective growth towards
accomplishing the organisational goals (Chiodo and et. al., 2012).
Contractual Relations (Strategic Level): Supply chain management concept is the most crucial
strategy for the organisation like Subway as their daily operations or activities and quality
depends on the effectiveness and consistency of the supply chain. Also, Contractual
relationship will also make a legal relationship with their major suppliers which will give
huge contribution in providing protection while they are espousing changes rapidly.
Additionally, these strategies will help them organisation in gaining higher competitive
9

advantage in market place, which will allow them in taking their operational activities in a
most significant way.
In-House Equipment Testing (Tactical Level): This is refers to on tactical level, this is also a very
beneficial technique as it would help the company in keeping up consistency in the
operations of organisation. Overall strategy is also having positive impact on the time
management technique. Hence, this will help the Subway in becoming tactically strong
(Abaunza and et. al., 2015).
Discussion On SWOT: It can be explained that SWOT analysis one of the model which
add on the value in company because it gives the idea that what are the strong and weaker area in
the organisation. SWOT analysis will allow business organisation like Subway to do future
improvement so that their goals can be accomplished in a specific manner. For collecting the
detail knowledge about SWOT analysis, it has been discussed below in context of Subway.
Strength Weaknesses
Company like Subway have developed the
strong market base due to which they are able
to maintain their name in one of the most
fastest growing food chain business in the
world and that has been one of the main
strength of a company.
There are number of outlets which are unable
to maintain their customers on regular basis
because they have very low quality of chairs
which doesn't give comfort to customers.
Opportunity Threats
Still there are number of countries where
Subway has the option to expand their business
as that will allow them to attain their targets on
specific time period.
Subway is getting the tough competition from
the internation market of McDonald's KFC due
to which profitability might decrease in future
period of time.
While talking about the company like Subway they are needed to find that how their
internal management is handling all of the condition of a company because this will allow them
to bring future changes through which goals can be accomplished easily. Even there will be
chances that weaker area can be improved which will uplift the standard of a company.
10

CONCLUSION
From the above file, it can be understood that operations management is the most crucial
factor for the organisation in order to carry out all the activities in a most significant way.
Consideration of Resource allocation plan is necessary so that organisation can allocate all the
resources in such way which allows them in accomplishing their operational requirements. At
last, assessment of strategic risk analysis is essential for the company which are associated with
the strategies of the business so that proper assurance of the business organisational activities can
be assured to enhance the overall performance.
11

REFERENCES
Books & Journal
Abaunza, F. and et. al., 2015. Do flow principles of operations management apply to computing
centres?. Production Planning & Control. 26(4). pp.249-264.
Andradóttir, S., Ayhan, H. and Down, D. G., 2013. Design principles for flexible systems.
Production and Operations Management. 22(5). pp.1144-1156.
Chiodo, A. and et. al., 2012. Using Lean principles to manage throughput on an inpatient
rehabilitation unit. American journal of physical medicine & rehabilitation. 91(11).
pp.977-983.
Hick, J. L., Hanfling, D. and Cantrill, S. V., 2012. Allocating scarce resources in disasters:
emergency department principles. Annals of emergency medicine. 59(3). pp.177-187.
Kuei, C. H. and Lu, M. H., 2013. Integrating quality management principles into sustainability
management. Total Quality Management & Business Excellence. 24(1-2). pp.62-78.
Ponsignon, F., Smart, P. A. and Maull, R. S., 2012. Process design principles in service firms:
Universal or context dependent? A literature review and new research directions. Total
Quality Management & Business Excellence. 23(11-12). pp.1273-1296.
Sampson, S.E., 2012. Visualizing service operations. Journal of Service Research. 15(2). pp.182-
198.
Tieman, M., van der Vorst, J. G. and Che Ghazali, M., 2012. Principles in halal supply chain
management. Journal of Islamic Marketing. 3(3). pp.217-243.
Vejrum Wæhrens, B., Cheng, Y. and Skov Madsen, E., 2012. The replication of expansive
production knowledge: the role of templates and principles. Baltic Journal of
Management. 7(3). pp.268-286.
Vom Brocke, J. and et. al., 2014. Ten principles of good business process management. Business
process management journal. 20(4). pp.530-548.