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Assessment 4 is an individual research report that is focused on ensuring that students are able to do quality research (peer reviewed articles (most important), textbook, reports, etc.) into the fast food industry.
Students are expected to answer the following questions:
• Identify both established and emerging consumer value propositions within the fast found industry.
• Provide a process map (or flowchart) of a fast food restaurant’s order fulfilment process.
• Discuss the application of manufacturing excellence in fast food chains
• Review the relationship between service quality and profitability in the industry
• Describe the current and potential operational challenges faced by managers in the fast food industry.
• Provide recommendations for improving the service operations of the fast food restaurants.

Consumer Value Propositions within the Fast Food Industry

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).

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).

Established and Emerging Consumer Value Propositions

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).

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).

Process Map of the Order Fulfillment Process

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 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).d 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.

Application of Manufacturing Excellence on Fast Food Chains

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).

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 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.

References

Aftab, J., Sarwar, H., Sultan, Q., and Qadeer, M. 2016. Importance of Service Quality in Customer Satisfaction (A Study on Fast Food Restaurants) 4(4). pp.161-171.

Alvarez, J.C. and Perry, C.M., 2015. Manufacturing excellence approach to business performance model. European Journal of Business and Economics, 10(1).pp. 13-14.

Bendoly, E., van Wezel, W. and Bachrach, D.G. eds., 2015. The handbook of behavioral operations management: Social and psychological dynamics in production and service settings. Oxford University Press.

Boella, M., 2017. Human resource management in the hotel and catering industry. Routledge.

Cao, Y. and Kim, K., 2015. How do customers perceive service quality in differently structured fast food restaurants?. Journal of Hospitality Marketing & Management, 24(1), pp.99-117.

Cataldo, I.I., Anthony, J. and Halsey, B.J., 2015. Profit-Motive and Self-Interest May Require a Demand-Pull Strategy to Reduce Textbook Costs for Students. International Research Journal of Applied Finance, 6(6), p.434.

Collings, D.G., Wood, G.T. and Szamosi, L.T., 2018. Human resource management: A critical approach. In Human Resource Management (pp. 1-23). Routledge.

Covin, J.G., Garrett, R.P., Kuratko, D.F. and Shepherd, D.A., 2015. Value proposition evolution and the performance of internal corporate ventures. Journal of Business Venturing, 30(5), pp.749-774.

Davis, B., Lockwood, A., Alcott, P. and Pantelidis, I.S., 2018. Food and beverage management. Routledge.

Hitt, M.A., Carnes, C.M. and Xu, K., 2016. A current view of resource based theory in operations management: A response to Bromiley and Rau. Journal of Operations Management, 41(10), pp.107-109.

Kanyan, A., Ngana, L. and Voon, B.H., 2016. Improving the Service Operations of Fast-food Restaurants. Procedia-Social and Behavioral Sciences, 224, pp.190-198.

Lee, H.L. and Tang, C.S., 2017. Socially and environmentally responsible value chain innovations: New operations management research opportunities. Management Science, 64(3), pp.983-996.

Liu, W.K., Lee, Y.S. and Hung, L.M., 2017. The interrelationships among service quality, customer satisfaction, and customer loyalty: Examination of the fast-food industry. Journal of Foodservice Business Research, 20(2), pp.146-162.

Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India.

Manzini, R.B. and Di Serio, L.C., 2017. Current thinking on cluster theory and its translation in economic geography and strategic and operations management: Is a reconciliation possible?. Competitiveness Review: An International Business Journal, 27(4), pp.366-389.

Mathe-Soulek, K., Krawczyk, M., Harrington, R.J. and Ottenbacher, M., 2016. The impact of price-based and new product promotions on fast food restaurant sales and stock prices. Journal of food products marketing, 22(1), pp.100-117.

Payne, A., Frow, P. and Eggert, A., 2017. The customer value proposition: evolution, development, and application in marketing. Journal of the Academy of Marketing Science, 45(4), pp.467-489.

Prajogo, D.I. and Cooper, B., 2017. The individual and organizational level effects of TQM practices on job satisfaction. International Journal of Manpower, 38(2), pp.215-225.

Ravindran, R. and Jaiswal, A.K., 2016. Exploitation of food industry waste for high-value products. Trends in Biotechnology, 34(1), pp.58-69.

Smith, L., Maull, R. and CL Ng, I., 2014. Servitization and operations management: a service dominant-logic approach. International Journal of Operations & Production Management, 34(2), pp.242-269.

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