Discuss about the Challenges to Business Success an Operations Management Focus.
Restaurant Business: Introduction
The restaurant business is considered as one of the most successful businesses in the world. It is a business that doesn’t have an expiry date as it satisfies the most basic requirements of people that include food and drinks. The restaurant industry is filled with potential and vision. This business can easily be successful if the managers administer and control the business properly, and successfully analyze and overcome the challenges faced by the business (Binus, 2012).
Challenges to Business Success
Businesses are constantly growing on a very large scale. These businesses have to deal with a large number of challenges in the market. These challenges include changes in technologies, globalizations and lot others. Problems should not be avoided as they can easily turn a potentially successful business into nothing. Running a successful business is becoming more and more complicated. The rate at which economy and technology is progressing, it has become very important to keep up with that speed.
Technology has an impact on almost every sector as everything directly or indirectly depends upon speed and convenience. Technology has a great impact on the restaurant business too. Technology has changed a large part of dining experience not only for the clients, but also for the workers. It is constantly turning the business in a different direction (Barklon, 2015).
With changing technology, online blogs and the fashion of online putting reviews online have become very famous. As soon as customers leave the restaurants, they can express their views about the restaurants. A single bad review can also affect the image of the restaurant very adversely.
Technology is constantly changing and new innovations are introduced every single day. It has become necessary to upgrade the technology in order to compete with the competitors in the market. Getting the new innovative technology is not the hard part, but the time it takes getting used to the technology, is what affects the business negatively. With changing technology, it has become necessary to interact with the customers on social media and to promote the business online which also requires a lot of time (FSG Team, 2014). So the changing technology is not the scary part, but finding the time to keep up with it is the real challenge.
Changing Customer Expectations
Changing customer expectation is also a big challenge for a business. With various advancements in the society, the expectations of consumers have changed drastically. Customers expect quickness and effectiveness in almost every process at a restaurant. Customers look for timely reservations and expect to get their orders and payments on time. Customers are well aware of the fact that there are enough technological options available in the market that can enable the restaurant to provide excellent service. Overcoming these challenges play a very important role in the restaurant business as customer satisfaction is the primary concern in this industry (Elina, 2015).
Customers’ dining expectations are increasing swiftly as a result of the fact that people are getting smarter everyday with altering the socio-cultural environment, more consciousness and tech development. In future, people’s budget will increase and they will be interested in trying out new stuff which will result in a more and more increase in customers’ expectations from the restaurants. The quality of food, good ambience and good assistance are the main pieces of the customer satisfaction (Markovic, et al., 2010). If a restaurant continues to satisfy the changing demands of the customers, it will secure the strongest position in the market.
Continued Globalization of Markets
Markets are globalizing continuously these years. Globalization means global extend and connectedness, in terms of manufacturing process and export-import, between different countries. Evolution of technology, communications and transportation are the main causes of globalization. Globalization of the market has challenged the already formed systems and creates a need for diverse mindsets. It also brings a lot of new opportunities for a business.
Globalization of markets allows restaurants to obtain a wide range of products. Products can also be delivered overseas without much trouble. But this involves a lot of risks too. When the food products are received from different places, then the restaurant cannot completely control everything on its own. The imported product could have bacteria on it that can make consumers of the restaurant sick. Many such conditions can arise and badly affect the image of the restaurant. Without the chance of meeting the suppliers and controlling the various processes, a lot is put at risk (Berman, 2015).
More globalized the market is, more are the chances of new entries in the restaurant industry. This leads to more and more competition in the market. Restaurants will have to make new strategies in order to compete with them (Haen, 2001). This could go badly for the brands which are not well established. Globalization of markets, if accepted properly, could also be very a great advantage of the restaurants. It can help the restaurants to promote their food globally.
Quality management is a process in which careful attention is paid to various processes of the business in order to achieve a higher standard in the market. Quality management involves processes like making important policies for good quality, careful decision making, efficient planning for managing the quality, and controlling the quality (Investopedia, LLC., 2016).
In quality management, various schemes are made that focus on finding out ways in which the quality of product can be enhanced, consumers can be more satisfied and the company can progress. Quality management is a big challenge for the restaurant business as people are getting more and more concerned about the quality of food they consume. These days, many food borne diseases have become very common. These affect the consumers' health very adversely. In order to succeed in the market, restaurants have to be careful about their products. They need to carefully manage the quality of their products, which will require constant improvement in every single sector of the industry and at every single level. Quality management requires dedication, control and hard work of every single person involved in manufacturing tasks as well as in legislation tasks (Paiva, 2013).
Quality management has become a very big challenge for the restaurant business because of the various recent events, such as more and more diseases caused by bad food, enhanced consciousness among people and risky goods in the market.
Global manufacturing means essential principles that are responsible for defining the ways in which every process is designed and manufactured with the aim to provide high class product, fulfill consumers’ demand and ensure timely delivery.
Global manufacturing is a big challenge for the restaurant industry. With global manufacturing, the restaurants must be ready to adapt to the ever changing globalized environment, from making the plans for manufacturing, in order to gain the trust and loyalty of the customers. In order to succeed alongside the global manufacturing, restaurants must be more bendable. With global manufacturing, the competition in the restaurant industry is increasing every single day. Customers have unlimited choices in the market where they can go and eat, it all comes down to who provide best ambience and quality food (Udlap, 2003).
Global manufacturing asks for better collaboration among the dealer, creator and the customer. Teamwork is the best way to succeed in these conditions.
Changing Job Designs
Job design refers to the methods used by the managers to arrange the various business tasks, functions and actions. Job design main goals include fulfilling the needs of a business and its various tools, and fulfilling the requirements of the employees. Job design is used in decreasing the level of job dissatisfaction (Saeed, 2014).
There are a lot of environmental, technological and directorial aspects that continuously change the job designs. These changing job designs have a lot of impact on the restaurant business. These changes in job designs affect the satisfaction level of the workers. Workers get comfortable with the jobs given to them originally. So the changes in job designs decrease the intensity of commitment among the workers. These changes also affect the relationships among the workers. When these changes are made, the workers as well as the managers may can have a problem with adjusting to the new conditions. With globalization, competition is amplified on a very large scale. For being successful in the market, it is essential to reduce the overall costs. These costs can be decreased by lessening the number of workers, which results in raising the work load on the employees. This workload can highly decrease the customer satisfaction (Kaufman & Hackman, 1973).
Areas of Operations Management that Impact the Success of Restaurant Business
There are many areas of Operations Management that can impact the success of restaurant business, including supply chain design, goods and service designs, quality management, resource management and many others. The areas that impact the most are managing inventories, quality management and goods and service designs.
Inventory management includes preparation, synchronization, storage, management and circulation and many other factors responsible for fulfilling consumers’ requirements. The process of managing inventories is intended to look after the accession of products, determining the buying agendas and to recycle the outdated items. Making sure that the item is available is an important task fulfilled by the system of inventory management, in order to form consumer loyalty. A complete knowledge of managing inventories can help a business to achieve higher level of efficiency.
In restaurants, inventory includes every single component needed to form a complete dish. Efficient inventory management can be used in tracking every single such component used. With the help of inventory management, stock can be managed properly and continuous supply can be ensured. With the constant growth of the restaurant industry, managing the inventories properly has become very essential.
In the restaurant business, time management is everything. A good system of managing inventories can very effectively decrease the time taken to complete an order. Inventory management can be used to examine the items that are sold, famous products can be restocked more efficiently and the time taken to provide the service will decrease. Inventory management also helps in analyzing the sales of special food items that are sold on specific instances only, and restaurants can keep those items in small stocks in order to develop a good position in the market, as a restaurant that fulfills every demand of the customers.
Inventory management impacts the success of restaurants on a very large scale by reducing the inventory costs. Proper Management of the inventories result in decreasing the time for which the spare inventories lie around unused, hence decreasing the costs. If the restaurant has proper systems of managing inventories, then they will have a proper count of everything. Customers feel more satisfied when they have exact knowledge about the business even when they are not thinking about visiting the restaurant. Hence, by providing the exact inventory information, restaurants gain the consumers’ trust.
Managing inventory plays a huge role in business as it decreases overstocking, wastage and the amount of leftovers. Wastage and overstocking are big parts of the unknown costs that affect the business very adversely. Appropriate management of inventory helps in decreasing all these unknown costs, hence increasing the chances of the restaurant’s success. Examining inventory can be used to concentrate on the various opportunities. If a particular component of a dish doesn’t get used enough in a dish and is getting wasted, then a plan can be devised to use that item somewhere else. Hence it will reduce the quantity of products in the inventory (Root, 2016).
Higher food costs are one of the biggest problems faced by restaurants. As a result of this, restaurants often have comparatively food costs are typically the largest expense for restaurants, so most restaurants have relatively compact inventory strategies. The supervisors should settle the inventory on time as not managing it properly may result in higher food costs. Proper management of inventory is a blessing for restaurants as it saves a lot of money that would have been wasted due to overstocking and food wastage.
There are also many inventory management gadgets available in the market. These include scanners and efficient software to manage the inventories. These can be very helpful in increasing the restaurant business. As time is everything for the customers nowadays, so these devices can help the employees to take the orders effectively and overall increase the efficiency of the business. The workers don’t have to do every task themselves, so they use these management devices and can manage their time effectively on other work processes.
Quality management refers to the organized rules, techniques and measures used to make sure that the best quality products are made in order to satisfy the requirements of the people. The processes involved in quality management includes making important policies for good quality, careful decision making, efficient planning for managing the quality, and controlling the quality (Black, 2010).
Quality management plays a huge role in the restaurant business. Quality is a big concern in every single restaurant. In some situations, quality could mean the nutritious value of the item while in another situation, it could be defined by the demands it satisfies. Quality could also be measured on the basis of the cost price of the item, whether it was worth it or not. However it is defined, quality plays a big role in restaurants. So quality management systems are definitely required in restaurants. Quality Management can improve the efficiency, elasticity and performance of a restaurant. In quality management, various schemes are made that focus on finding out ways in which the quality of product can be enhanced, consumers can be more satisfied and the company can progress (quality, 2016).
Customer satisfaction has a huge role in every business. When customers visit a restaurant, the main things they pay attention are the food quality, ambiance, clean environment and efficient service. All these factors play a very essential role in forming a customer’s loyalty towards a restaurant. Proper quality management properly controls every one of these factors, hence greatly benefits a restaurant. Completely documented and applied processes of quality management will make sure that the demands of the consumers are fulfilled. If the quality of food is good then the customer will also be happy and satisfied. Therefore, the restaurant will be able to secure a good position in the market. Moreover, restaurants have to face a lot of competition in the market. Proper quality management can assist the restaurant in knowing the customers and the society, in a better way. This gives restaurants an advantage against the rivals (Kevin, 2011).
Proper quality management not only enhances the quality of food, but also improves the quality of service. When people visit a restaurant, along with good food, they also expect good service. Providing quality service is basically being punctual and well mannered. Providing high class service has become very essential part of a business’s success. There are a lot of restaurants available in the market and the customers can choose to go to any one of those. Customers are usually tempted to visit restaurants that offer the best quality service. So the proper quality management helps a restaurant to gain a big competitive advantage over its rivals. When people visit a good restaurant, they expect good service and fulfilling these expectations is a big positive as it can help in outshining the average food. Quality management assists in forming strategies for continuous development of the restaurant. It helps to successfully face the changes in the society.
Quality management helps in obtaining tangible as well as intangible profits. Tangible profits include enhanced quality of product, advances in outputs and more effectiveness. Intangible profits include advances in public dealings, better team spirit, consumer contentment and forming a better impression of the business (Ramseook-Munhurrun, 2012).
The main goal of every business is to increase the production and to decrease the costs. This is an essential factor that enhances the profits from a business very effectively. In proper quality management system, proper teams are made that look after the processes resulting in increased production and decreased costs
Goods and Service Design
Goods and services design plays a huge role in every business. Before starting the manufacturing process, the most important step is to form goods and service design. In order to form accurate designs, it is important to carry out essential processes like understanding the requirements of customers, carefully observing the existing goods, manufacturing fresh goods, making specific plans for creating goods of great quality and deciding the limits of the costs.
Service design includes the processes like managing and organizing the workers, interactions and the products. It increases the quality of service at a restaurant. Service design is basically a medium of communication between the person, who provides the service, and the consumers, receiving the service. As the quality of service directly impacts the connection of the restaurant with the customers, therefore it is important to have an excellent goods and service design that can ensure quality service. The demands and needs of the customers are changing every single day, which makes it hard to determine what kind of service should be provided. So goods and service design can help in analyzing all these factors. A good product and service design ensures that the different changes are constantly observed and adapted, in order to have a strong position in the market. Product Design involves dealings with the products to form ideas and plans about them and to change these ideas in real items and services, which can be used by the people. It includes all processes like ideas, production and finally bringing the product to the market (Tangient LLC, 2016).
Goods and services have great impact on the success of the restaurant business as it is an important factor that could lead to glory or failure. The market is changing constantly, due to technological advancements and variations in the economy and the competition is enhancing every single day. In order to have a perfect goods and service design, it is important to have the complete knowledge of these changes and the requirements of the customers.
Goods and service design is a very essential component of every business as the customer satisfaction directly depends on it. In order to compete with the competition in the market, restaurants should constantly improve their items and introduce fresh new items. Goods and services design helps in understanding, designing and producing quality products that can satisfy the customers' demands. Restaurants can design their product using the customer benefit package too. This includes producing the products that consumers usually like, buy and consume. Customer value package is a combination of products, which increases the value of the original product. The original item is the primary item that the customers like and that fulfill the requirements of the consumers. The products added to these original items are not very important, but they increase the value of the product. For example: Restaurants can offer free gifts, alongside the meals to attract more customers. With the customer benefit package, the restaurants can also provide free wifi inside, which will attract a lot of consumers as they can do their work online alongside their lunch or dinner. So a good products and service design can create a medium of communication among the managers and the consumers, helps in defining the items more effectively and act as a blueprint for the workers when they try to sell their food (American Pink Team, 2014).
American Pink Team, 2014. Customer Benefit Package. Customer Benefit Package, Available at: https://america.pink/customer-benefit-package_1128821.html
Barklon, E., 2015. How is technology affecting the restaurant industry?. How is technology affecting the restaurant industry?, 19 February.
Berman, C., 2015. How Does Globalization Affect Restaurants?. How Does Globalization Affect Restaurants?, Available at: https://smallbusiness.chron.com/globalization-affect-restaurants-77851.html
Binus, A., 2012. A restaurant business: Introduction, Available at: https://library.binus.ac.id/eColls/eThesisdoc/Bab1/Bab%201_09-63_1.pdf
Black, T., 2010. 10 Quality Management Tools. 10 Quality Management Tools, 10 September, Available at: https://www.inc.com/guides/2010/09/10-quality-management-tools.html
Elina, 2015. How has the restaurant industry has changed over the past 10 years?. How has the restaurant industry has changed over the past 10 years?, 28 May.
FSG Team, 2014. The impact of technology on foodservice. Operators say technology has made their work lives easier., 28 February.
Haen, H., 2001. The Impact of Globalization and Trade Liberalization on Food Security. The Impact of Globalization and Trade Liberalization on Food Security, 16 October.
Investopedia, LLC., 2016. What is 'Quality Management'. What is 'Quality Management'.
Kaufman, S. & Hackman, J., 1973. Effects of Job Redesign: A Field Experiment1. journal of applied social pyschology, March.
Kevin, F., 2011. What Are The Benefits of a Quality Management System?. What Are The Benefits of a Quality Management System?, 20 May.
Markovic, S., Raspor, S. & Segaric, K., 2010. Does restaurant performance meet customers' expectations?: Tourism and Hospitality Management.
Paiva, C., 2013. Quality Management: Important Aspects for the Food Industry. Quality Management: Important Aspects for the Food Industry, 16 January.
Quality, A. s. f., 2016. What is Total Quality Management (TQM)?. What is Total Quality Management (TQM)?.
Ramseook-Munhurrun, P., 2012. erceived service quality in restaurant services. International journal of management and marketing research, 5(3), pp. 1-14.
Root, G. N., 2016. The Impact of Inventory Management on Customer Satisfaction. The Impact of Inventory Management on Customer Satisfaction.
Saeed, M., 2014. Impact of job redesign on employee motivation: A case study of Bahawalnagar Pakistan. International Journal of Research in Business and Technology, pp. 1-7.
Tangient LLC, 2016. Product And Service Design. In: TES, Available at: https://ids355.wikispaces.com/Ch.+4+Product+and+Service+Design?responseToken=0488036e3f35247db121d2ea595884992
Udlap, C., 2003. Global Manufacturing, Available at: https://catarina.udlap.mx/u_dl_a/tales/documentos/lim/garcia_b_a/capitulo2.pdf