Professional Documents
Culture Documents
I. Problem
Main Problem: How can Abby improve its quality management while planning for the
expansion?
Secondary problem:
What actions should the management take to resolve the current $25 dollar dilemma?
II. Point of View: Abby Martin(Owner)
III.Assumptions
a.
b.
c.
All 6 branches are located in Southwest Florida (map, reputation in SF, expansion in
Orlando, Tampa)
d. Currently does not use lean operation
e. Each restaurant has a unique name
f. Customer is drunk(drink alcohol responsibly)
IV.
Analysis
STRENGTHS
WEAKNESSES
Diversified/customized
concepts
according
local
market
demographics
Enterprise restaurants
THREATS
trend
recession
Expand
services
and
variety
of
products/menus
STEP Analysis
Social
Consumers are becoming more health conscious
Varied demographics in different areas in Florida
Technological
Technological advancements in restaurant facilities
Automation of business transactions
Online ordering
Economic
Low interest rates due to recession
Post-recession shift in consumer behavior (i.e. reduced spending)
Political
Government regulations regarding health and food standards
In deciding whether or not to push through with the expansion of Sunshine Enterprises in the
Tampa and Orlando areas, the costs and advantages entailed by doing so should be
considered.
Cost-Benefit Analysis of Planned Expansion
COSTS
BENEFITS
Increase in revenue
and equipment)
Leverage expertise
expenses
new area
Achieve
economies
of
scale
(cost
reduction advantage)
Sunshine Enterprises currently employs a traditional payment system which is a paper-based
mechanism of accepting customer payments. When making payments through credit cards, the
cashier facilitates it and prepares two copies of the receipt (i.e. one for the customer and the
other for restaurant documentation). The customer is then asked to verify the amounts recorded
on the receipt by letting him sign on it. If a customer notices a discrepancy, the customer should
inform the cashier to correct it accordingly. When giving tips through the use of credit cards, the
customer should write the amount of the tip on the receipt with his signature on it. A problem
arises when a restaurant personnel alters the amount written on the receipt.
++explanation of current payment system
A fishbone diagram will help analyze the 25-dollar problem. This diagram aims to trace the
possible causes in 5 separate categories which are Environment, Machine, Man, Method and
Material. Under the environment category, a possible cause is that the restaurant doesnt uphold
standards of quality and ethics which may cause the rise of fraudulent tip. For the payment
method that the restaurant apply in their operation, there is no additional layer of security. When
the customer loses her receipt, the manager ends up with no alternative way to verify the
amount and its breakdown in the receipt. Moreover, there is also no additional security to verify
the amount of tip aside from cross referencing it to the customer. An additional security is
needed specially when the customer is drunk, in which case waiters have higher possibility of
doing fraudulent acts.
The manual way of adding tip is the most obvious cause of the problem. By implementing
paper-based and manual-based of payment system, waiters can easily change the amount. The
company should also improve its record keeping. It must have records of the breakdown and
total amount of receipt. In that way, manager can easily review and check operations of the
company. If feasible, the company should change its payment system to a more handy and
automatic equipment.
All of the parties involved in the problem have a share in the causes. The customer should have
written the amount of tip comprehensibly and should have checked the receipt before leaving
the restaurant. The integrity of waiter is in question. As for the credit company, it would be better
if they can give the breakdown of the amount. In doing do, feasibility and permission from
customer must be acquired. Moreover, the manager should fail-safe the problem instead of
pointing out that he cant do anything. Customer satisfaction is an ingredient to companys
success. The manager should offer alternative ways to solve the problem.
Value Chain Perspective
Comp
Suppliers
Inputs
Transformati
any
Outputs
Customer and
on process
Market
Segments
Resta
urant
Fo
Or
Store
od
oo
der
oo
Whole
taking
saler
Eq
uipme
nt/Ma
chine
ra
In-
w
m
at
eri
al
es(extr
cu
sales
*H
sto
es,
any
atering
py
er
comp
servic
me
card
ne in)
*C
and group
servic
edit
ap
Cr
seating(Di
store
suppli
In-
ne
servic
rg
y/
breakd
La
own
bo
solutio
n)
ome
Delivery
ual
ity
ser
vic
Bill
qu
payme
ip
nt and
R
ec
recordi
ord
en
ng
Fo
od
ay
produc
tion
en
and
packa
se
ging
rvi
ce
*-not stated in the case, but usual
Value of a loyal customer
The value of a loyal customer (VLC) quantifies the total revenue or profit each target market
customer generates over the buyers life cycle.
Customer defection rate is 5-10%
Average buyers life cycle
Repurchase frequency is one visit every two months or 6 times a year
Contribution to profit and overhead per restaurant is 35%
Lunch price range: $10-$20
Dinner price range: $20-$30
VLC low =(10)(6)(.35)(1/.1)=$210
VLC Upper=(30)(6)(0.35)(1/.05)=$1260
(Tama ba? Pa-check naman hehe :))
sector, the results have proven it to be effective in reducing costs and making customers
happier. On the other hand, Six Sigma is founded on controlling defects. Although the use of
one or the other is effective in quality management, combining Six Sigma with lean principles
creates a powerful process to provide the customers with the highest-quality service.
Because Sunshine Enterprise provides interaction-based services, customers need
more personal care and attention. Quality is paramount to the company. Restaurants, in
general, deal with wastes on a day to day basis. Not just physical wastes such as excess raw
materials but also anything that does not add value to the service provided. Sunshine Enterprise
can eliminate these wastes by utilizing lean, six sigma or both methodologies in order to provide
quality service at the fastest speed with far less compromise.
Excess raw materials are common to this type of business. As a result, inventory control
is an important factor that needs to be monitored in restaurants. Because it is one of the biggest
waste factors, it consequently results to higher expenses. Given that Sunshine Enterprise
usually orders in bulk, the possibility of wastes is just around the corner. Streamlining these
methods aims to minimize the food or ingredients that are spoiled before used.
Analyzing the layout of the restaurant is also a process utilized in Lean and Six Sigma
methodologies. It offers the best layout possible in order to ensure that the flow of employees
and services do not collide with one another and create service interruptions. Sunshine
Enterprise uses different concepts in its restaurants which includes differences in facility decor,
size and layout. The company needs to attain the optimal layout that will reduce such wastes in
services provided.
*Centralize database reduce time it takes to solve customer problems ($25)
*wifi - recomm
++JIT, ambiance: cleanliness and WIFI
CUSTOMER SATISFACTION MODEL
Although there are many factors affecting customer satisfaction, studies show that perceived
value, customer expectations and perceived quality are the key factors that lead to customer
satisfaction and ultimately, customer loyalty. Customer satisfaction has always been highlighted
as an important concern for service companies like Sunshine Enterprises. Not only does it
translate to more profits but it also has an overall impact on the brands equity. Customer
satisfaction, as defined by Hansemark and Albinson, is the overall customer attitude or
emotional reaction to the difference between the service they anticipated and the service they
received. Any successful hospitality business banks on customer satisfaction because it leads to
repeat purchases and eventually, customer retention and loyalty.
Sunshine Enterprises aim to provide quality services because customers expect to receive the
value of the price they pay. Satisfied customers influence positive word of mouth marketing. On
the other hand, dissatisfied customers like Mr. Otter can have a negative impact on the
company in general. Companies should develop strategies in handling these dissatisfied
customers to prevent losing them. However, the company should ensure that they still do so
with care and value for the customer.
GAP MODEL
Analysis of Some Possible Gaps on Quality Management
In connection with the customer satisfaction model aforementioned, one of the analysis
tools used by the group to analyze Sunshine Enterprise is the gap model of service quality. It is
Gap 4: Communication
Gap (Between actual
delivery performance and
external communications
with the customer)
The Sunshine Enterprise may look clean and its menu may look
filling and delicious in company brochures and other promotional
materials. But in reality, the restaurant may be dirty and not well
ventilated, and the food may be served differently in an
unpleasant way.
Gap
5:
Service
(Between
expectations
perceptions)
Known for customizing its business for diverse local needs, its reputation in Southwest
Florida for superior service and food quality shows that the firm has favorably addressed these
gaps. Abbys entrepreneurial skills and her own approach on quality control strongly supports
this claim. This is also backed by internal data that there is 1 over 100 negative customer
complaint per customer comment.
++anytime anywhere, centralized database, so no need to get reports from
managers
V.
Recommendation
ERIK
To avoid encountering such problems in the future, Abby Martin should implement a new credit
card payment scheme that involves better control over payments.
(New equipment)
To improve the payment system, we are suggesting a new equipment.
(pic)
Through this payment system, the waiter will bring the equipment to the table and allow the
customer to swipe and enter the pin. It will also allow the customer to see and check the inputs
made by the waiter. In this way, the customer can see if the inputted bill and tip is correct. This
will also be integrated to the ERP system. This small equipment is feasible since it will not cost a
lot considering the current trends in technology.
(company strategy) To improve the operation of the company, we recommend to delegate the
execution of quality management to the manager of each branch. With this strategy, Abby
Martin can focus on planning the expansion.
Category
Opportunity
Recommendation
Essential
.The
Better services
Improve
vicinity
or
company
should
uphold
environment(cleanliness, theme)
products
and
services
by
Record management
employing
lean
operation
and
Paying terms
Free Wifi
by
maintaining
the
supply
JIT
setting
terms
with
supplier
Improve
chain
by
system.
lowest cost)
Sustaining
Waste
VI.
-Customer Satisfaction
-The customer deserves an explanation. The customer deserves an acceptable reason
The key to companys success is customer satisfaction. Just like in love, the manager should try
to explain and reconcile the problem with the customer.
In a relationship, may tampuhan at walang perfect relationship. But you can always try to
improve and reconcile your differences
In running a business, we can try to offer the best but we can still fail. There will always be room
for improvement.
RECOMMENDATION:
I. Problem
Main Problem: How can Abby improve its quality management while planning for the
expansion?
Secondary problem:
What actions should the management take to resolve the current $25 dollar dilemma?
II.
III.
Assumptions
a.
b.
c.
All 6 branches are located in Southwest Florida (map, reputation in SF, expansion in
Orlando, Tampa)
d. Currently does not use lean operation
e. Each restaurant has a unique name
f. Customer is drunk(drink alcohol responsibly)
IV.
Analysis
WEAKNESSES
Diversified/customized
concepts
according
local
market
demographics
Enterprise restaurants
THREATS
trend
recession
Expand
services
and
variety
of
products/menus
STEP Analysis
Social
Consumers are becoming more health conscious
Varied demographics in different areas in Florida
Technological
Technological advancements in restaurant facilities
Automation of business transactions
Online ordering
Economic
Low interest rates due to recession
Post-recession shift in consumer behavior (i.e. reduced spending)
Political
Government regulations regarding health and food standards
In deciding whether or not to push through with the expansion of Sunshine Enterprises in the
Tampa and Orlando areas, the costs and advantages entailed by doing so should be
considered.
Cost-Benefit Analysis of Planned Expansion
COSTS
BENEFITS
Increase in revenue
and equipment)
Leverage expertise
expenses
new area
Achieve
economies
of
scale
(cost
reduction advantage)
Sunshine Enterprises currently employs a traditional payment system which is a paper-based
mechanism of accepting customer payments. When making payments through credit cards, the
cashier facilitates it and prepares two copies of the receipt (i.e. one for the customer and the
other for restaurant documentation). The customer is then asked to verify the amounts recorded
on the receipt by letting him sign on it. If a customer notices a discrepancy, the customer should
inform the cashier to correct it accordingly. When giving tips through the use of credit cards, the
customer should write the amount of the tip on the receipt with his signature on it. A problem
arises when a restaurant personnel alters the amount written on the receipt.
++explanation of current payment system
A fishbone diagram will help analyze the 25-dollar problem. This diagram aims to trace the
possible causes in 5 separate categories which are Environment, Machine, Man, Method and
Material. Under the environment category, a possible cause is that the restaurant doesnt uphold
standards of quality and ethics which may cause the rise of fraudulent tip. For the payment
method that the restaurant apply in their operation, there is no additional layer of security. When
the customer loses her receipt, the manager ends up with no alternative way to verify the
amount and its breakdown in the receipt. Moreover, there is also no additional security to verify
the amount of tip aside from cross referencing it to the customer. An additional security is
needed specially when the customer is drunk, in which case waiters have higher possibility of
doing fraudulent acts.
The manual way of adding tip is the most obvious cause of the problem. By implementing
paper-based and manual-based of payment system, waiters can easily change the amount. The
company should also improve its record keeping. It must have records of the breakdown and
total amount of receipt. In that way, manager can easily review and check operations of the
company. If feasible, the company should change its payment system to a more handy and
automatic equipment.
All of the parties involved in the problem have a share in the causes. The customer should have
written the amount of tip comprehensibly and should have checked the receipt before leaving
the restaurant. The integrity of waiter is in question. As for the credit company, it would be better
if they can give the breakdown of the amount. In doing do, feasibility and permission from
customer must be acquired. Moreover, the manager should fail-safe the problem instead of
pointing out that he cant do anything. Customer satisfaction is an ingredient to companys
success. The manager should offer alternative ways to solve the problem.
Value Chain Perspective
Comp
Suppliers
Inputs
Transformati
any
Outputs
Customer and
on process
Market
Segments
Resta
urant
Fo
Or
Store
od
oo
der
oo
Whole
taking
saler
Eq
uipme
nt/Ma
chine
ra
In-
w
m
at
eri
al
es(extr
cu
sales
*H
sto
es,
any
atering
py
er
comp
servic
me
card
ne in)
*C
and group
servic
edit
ap
Cr
seating(Di
store
suppli
In-
ne
servic
rg
y/
breakd
La
own
bo
solutio
n)
ome
Delivery
ual
ity
ser
vic
Bill
qu
payme
ip
nt and
R
ec
recordi
ord
en
ng
Fo
od
ay
produc
tion
en
and
packa
se
ging
rvi
ce
*-not stated in the case, but usual
Value of a loyal customer
The value of a loyal customer (VLC) quantifies the total revenue or profit each target market
customer generates over the buyers life cycle.
Customer defection rate is 5-10%
Average buyers life cycle
Repurchase frequency is one visit every two months or 6 times a year
Contribution to profit and overhead per restaurant is 35%
Lunch price range: $10-$20
Dinner price range: $20-$30
VLC low =(10)(6)(.35)(1/.1)=$210
VLC Upper=(30)(6)(0.35)(1/.05)=$1260
(Tama ba? Pa-check naman hehe :))
sector, the results have proven it to be effective in reducing costs and making customers
happier. On the other hand, Six Sigma is founded on controlling defects. Although the use of
one or the other is effective in quality management, combining Six Sigma with lean principles
creates a powerful process to provide the customers with the highest-quality service.
Because Sunshine Enterprise provides interaction-based services, customers need
more personal care and attention. Quality is paramount to the company. Restaurants, in
general, deal with wastes on a day to day basis. Not just physical wastes such as excess raw
materials but also anything that does not add value to the service provided. Sunshine Enterprise
can eliminate these wastes by utilizing lean, six sigma or both methodologies in order to provide
quality service at the fastest speed with far less compromise.
Excess raw materials are common to this type of business. As a result, inventory control
is an important factor that needs to be monitored in restaurants. Because it is one of the biggest
waste factors, it consequently results to higher expenses. Given that Sunshine Enterprise
usually orders in bulk, the possibility of wastes is just around the corner. Streamlining these
methods aims to minimize the food or ingredients that are spoiled before used.
Analyzing the layout of the restaurant is also a process utilized in Lean and Six Sigma
methodologies. It offers the best layout possible in order to ensure that the flow of employees
and services do not collide with one another and create service interruptions. Sunshine
Enterprise uses different concepts in its restaurants which includes differences in facility decor,
size and layout. The company needs to attain the optimal layout that will reduce such wastes in
services provided.
*Centralize database reduce time it takes to solve customer problems ($25)
*wifi - recomm
++JIT, ambiance: cleanliness and WIFI
CUSTOMER SATISFACTION MODEL
Although there are many factors affecting customer satisfaction, studies show that perceived
value, customer expectations and perceived quality are the key factors that lead to customer
satisfaction and ultimately, customer loyalty. Customer satisfaction has always been highlighted
as an important concern for service companies like Sunshine Enterprises. Not only does it
translate to more profits but it also has an overall impact on the brands equity. Customer
satisfaction, as defined by Hansemark and Albinson, is the overall customer attitude or
emotional reaction to the difference between the service they anticipated and the service they
received. Any successful hospitality business banks on customer satisfaction because it leads to
repeat purchases and eventually, customer retention and loyalty.
Sunshine Enterprises aim to provide quality services because customers expect to receive the
value of the price they pay. Satisfied customers influence positive word of mouth marketing. On
the other hand, dissatisfied customers like Mr. Otter can have a negative impact on the
company in general. Companies should develop strategies in handling these dissatisfied
customers to prevent losing them. However, the company should ensure that they still do so
with care and value for the customer.
GAP MODEL
Analysis of Some Possible Gaps on Quality Management
In connection with the customer satisfaction model aforementioned, one of the analysis
tools used by the group to analyze Sunshine Enterprise is the gap model of service quality. It is
Gap 4: Communication
Gap (Between actual
delivery performance and
external communications
with the customer)
The Sunshine Enterprise may look clean and its menu may look
filling and delicious in company brochures and other promotional
materials. But in reality, the restaurant may be dirty and not well
ventilated, and the food may be served differently in an
unpleasant way.
Gap
5:
Service
(Between
expectations
perceptions)
Known for customizing its business for diverse local needs, its reputation in Southwest
Florida for superior service and food quality shows that the firm has favorably addressed these
gaps. Abbys entrepreneurial skills and her own approach on quality control strongly supports
this claim. This is also backed by internal data that there is 1 over 100 negative customer
complaint per customer comment.
++anytime anywhere, centralized database, so no need to get reports from
managers
V.
Recommendation
ERIK
To avoid encountering such problems in the future, Abby Martin should implement a new credit
card payment scheme that involves better control over payments.
(New equipment)
To improve the payment system, we are suggesting a new equipment.
(pic)
Through this payment system, the waiter will bring the equipment to the table and allow the
customer to swipe and enter the pin. It will also allow the customer to see and check the inputs
made by the waiter. In this way, the customer can see if the inputted bill and tip is correct. This
will also be integrated to the ERP system. This small equipment is feasible since it will not cost a
lot considering the current trends in technology.
(company strategy) To improve the operation of the company, we recommend to delegate the
execution of quality management to the manager of each branch. With this strategy, Abby
Martin can focus on planning the expansion.
Category
Opportunity
Recommendation
Essential
.The
Better services
Improve
vicinity
or
company
should
uphold
environment(cleanliness, theme)
products
and
services
by
Record management
employing
lean
operation
and
Paying terms
Free Wifi
by
maintaining
the
supply
JIT
setting
terms
with
supplier
Improve
chain
by
system.
lowest cost)
Sustaining
Waste
VI.
-Customer Satisfaction
-The customer deserves an explanation. The customer deserves an acceptable reason
The key to companys success is customer satisfaction. Just like in love, the manager should try
to explain and reconcile the problem with the customer.
In a relationship, may tampuhan at walang perfect relationship. But you can always try to
improve and reconcile your differences
In running a business, we can try to offer the best but we can still fail. There will always be room
for improvement.
RECOMMENDATION: