Papaya Milk: Jason, Jimmy, Nick, Rachel, Richard, Sandy Operations Management Prof. Ying Jiun Hsieh “MyComplimentstothe Chef, er, Buyer“
Outline Case Introduction QuestionDiscussion Conclusion QuestionsandAnswers
Case Introduction • How they are able to serve everything on that menu quickly • Flash-frozen and vacuum-packed • Top- quality restaurants like Fuddruckers and Perkins are going the outsourcing route • Taglines such as “Hours versus ours” and “Just heat and serve”
What can be outsourced? • Delivery of ingredients • Preparation of the food • Food arrangement • Others: • Accounting and payroll services • Kitchen cleaning • Laundry • Advertisement and marketing • IT (website maintenance)
QuestionDiscussion Question 1 Explainthemeaningofthephrase “Hours versus ours.“
“Hours versus ours“ • Consumer-goods companies such as Sara Lee, Land O´Lakes used slogans as advertisement • “Hours versus ours“, “Just heat and serve“ • Stimulate B2B-relationships with restaurants • timely serving capability of restaurant businesses can be increased • Encourage restaurants to outsource business operations
Outsourcing vs. In-House • Capacity planning to identify requirements
Example Outsourcing vs In-House • Fast casual restaurant - Fuddruckers In-House Burger Outsourced Burger Time
QuestionDiscussion Question 2 Whatadvantagesaretherewhenrestaurants outsource?
Advantages of outsourcing in restaurant • Improve efficiency • Save time to prepare or manufacture materials • Cost saving • Labor cost • Operating cost • Improve productivity • Expertise • Avoid time consuming of training employee • Demand • Wide fluctuation in demand
QuestionDiscussion Question 3 Whataresomeimportantdisadvantagesorlimitationsofoutsourcingforrestaurants?
Disadvantages of outsourcing in restaurant • Quality consideration • How to monitor the quality of the food material • Risks • Loss direct control of operation • Delay in delivery • Quality defects • Taste (loss of freshness) • Damage to the organization’s reputation • Losses customer’sreliability
QuestionDiscussion Question 4 Do youconsiderrestaurantoutsourcingtobedishonest? Unethical? Explain.
In ouropinion • Wefocus on restaurant -can provided food faster -capability-price-ratio -feature -health * If the restaurant can suit ourdemand we consider it is ethical
Restaurant outsourcing 1. Advantage -reduce product cost (low price) -increase business efficiency (faster) -focus on core product (feature) 2. Heath (safety of the food )
QuestionDiscussion Question 5 Doesrestaurantoutsourcingincreasecapacity? Explain.
Measures of capacity 1.Restaurant capacity = inputs / outputs -Inputs = number of tables , seating capacity -Outputs = number of meals served per hour 2.Outsourced part of cooking process can increase output measures • Shorter lead time • Increased number of meals served per hour
Take macro view It’s important to consider how parts of system related. - if the restaurant have high productivity because of outsourcing,butdon’t have enough inputs to serve customers is not good. ex: to add more tables and seats
Conclusion Control 100% of your core, outsource everything else. Don’t open a restaurant if no one can cook! Customer review: “Unfortunately everything we ordered was from a frozen box and then deep fried. At least it was all served hot (from the deep fryer) except the burger which was the Costco style claw burger on a stale bun. Everything unimaginatively warmed up, ...just heat and serve. Even the burger condiments seemed tired!”
References • Operations Management by William J. Stevenson (11th Edition). • http://www.tripadvisor.ca/ShowUserReviews-g2086961-d3846663-r152832353-Sandy_s_Family_Restaurant-Mildmay_Bruce_County_Ontario.html • http://www.makingthingsoutofnothing.com/post/42502126421/control-100-of-your-core-outsource-everything-else