International Operation Management

Synopsis of Case:

A traditional Mexican restaurant ‘Jose’s Authentic Restaurant’ located in New

England. It is a 58 seat restaurant that offers a broad range of Mexican food in
Mexican traditional way. The restaurant’s interior decoration promotes the Mexican
theme: The walls appear to be made of adobe and are draped with serapes; the
furniture is Spanish-Mexican style and flamenco guitar and mariachi alternate as
background music. As per their tradition, they also have male staff.

Environment at Jose’s Mexican restaurant is absolutely brisk and passionate. They

have some graduate students who fancy tips a lot as they believe this is their extra
income to support them however this extra income ‘tips’ has been declining for a
number a reason at Jose’s.

The menu is consisted of 23 main entrees which are assembled from eight basic
stocks (chicken, beef, beans, rice, corn tortillas, flour tortillas, tomatoes, and lettuce)
and variety of other ingredients (fruit, vegetables, sauces, herbs and spices). Before
service chef prepares all basic which will be required during service so it can be
combine quickly and served in less amount of time. Usually amount of time needed to
complete a meal once it has been ordered is 12 minutes. Once the order is ready to be
served, waiter checks everything by himself and make sure that the tray has got
everything according to order. He also make sure it is presentable and add any
finishing touches if require.

Ivan Karetski also tries to maintain good relationship with his cook as he wants to
stay on good term with him. He also performs other task and assists his cook as much
as he can.

Management also conducted survey on last Friday and Saturday to improve their
standards. 70 customers were seated promptly but 13 weren’t. 73 were satisfied with
waiter service but 10 weren’t. 58 were served in reasonable time but 25 weren’t. 72
enjoyed food but 11 didn’t. 67 found dinning experience worth the cost but 16 didn’t.

This survey shows significant number of unsatisfied customers. This must be look at
it at very carefully and perform operational measure in order to make this business
successful.

As they say in hotel industry ‘losing a customer means more than losing one person,

Major Issues Discussed:

Jose’s Mexican Restaurant has encountered number of issues which can be seen
clearly through their survey report. They have got other issues which influenced
restaurant’s overall performance.

Staff seems to be loud but energetic at the same time while passing order to kitchen
staff. It seems to have oral procedure of passing order to kitchen staff as they might
miss any item in the order.

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Modern restaurant design with modern interior could cause hungry dinner to walk
through your door and in Jose’s case their restaurant looks old traditional but not
modern traditional.

Everybody likes to have dinner with their friends and family members and customers
expect car park facility nearby restaurant. Due to having restaurant adjacent to a
central artery, they have limited off-street parking facility.

Normally the amount of need to complete a meal once it is ordered is 12 minutes but
during peak hours service may take more than 20 minutes to serve order to customer
tables.

It also seems that it take little longer for waiter to assign table to customers within one
minute of their being seated.

As they do not take reservation, customers have to wait outside regardless of poor
Whether condition. This wait may take up to 45 minutes especially on Friday and
Saturday nights, which are the busiest days in any restaurant business. They don’t
have separate lounge or waiting area inside restaurant.

Also seems like jobs are not clearly defined as Ivan Karetski has been helping the
cook thought it is not his job to do so.

The Cook has been complaining about poor quality of stock received in recent weeks.
He wasn’t satisfied with quality of chicken which has got more bones than meat and
lettuce which was wilted. There may be more quality issues with other ingredients and
fresh vegetables as well which will eventually create bad impact on food taste.

Jose’s accepts cash or major credit card but no checks. Also Jose’s do not take
reservation and it also do not accept online order.

Overall we can say that staff, cook and management seem to deliver excellent
customer services along with excellent experience but they need to perform
Operational management tasks in order to achieve their objectives.

QUESTIONS:

1. How should quality be defined at this restaurant?

Quality at Jose’s can be defined in terms of customer satisfaction. It has been shown
through survey report that quality has not been up to mark as it should be. Quality can
also be defined as overall experience at Jose’s itself which includes their seating
arrangement, number of seats in restaurant, service, waiting time, environment, and
lighting and even their crockery and most importantly food itself.

Whether you make fantastic curry or pasta, fish or ham burger if overall service
quality is not good enough, then you are more reluctant to lose customers. However,
taste of food should not be judge in terms of quality because it may vary in different
restaurant.

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Management must carryout research to identify and understand the needs and desire
of customers. The effort must be on regular basis, since customers' taste and desire
change over time. When customers are spending money at Jose’s they are expecting
the same quality of food and taste which they promise along with reliability in terms
of their quality of fresh product which they use as ingredients. For example if they
advertise tradition Mexican dishes like arroz, mole or Altamont spring and they don’t
get it in same traditional taste then it will not be what they asked ordered.

Eating good food at restaurant is not just enough in this today’s competitive restaurant
industry. It is also an experience which counts. If customer are paying or buying meal
they are also experiencing loads of other factors which are important for any
restaurant business. If Jose’s enhances their level of standard then chances are they
will overshadow other weakness to some extent.

As Jose’s is traditional Mexican food restaurant, their customer expect quality food
with less amount of time spend outside or even in busy hours. In food industry
customers always judge standard of service they receive. It is essential for Jose’s to
look after and satisfy their customer through their level of service which they offer
along with quality which should be top most priority in terms of their operational
management decision.

In terms of serviceability factor, friendly service in restaurant can be very useful and
at the same time if it is not up to the mark then it may have negative impact on whole
business and restaurant might end up losing customer one by one. Friendly service
and extra smile can win occasional customer into regular ones which is profitable in
long term of Jose’s. In some restaurants it has been observed that they assign or
designate area to their waiter staff so customers can freely call them up quickly and at
the same time waiter staff can spot what customers are looking for. At Jose’s they
could have defined each member’s duty clearly rather than helping cook in the
kitchen.

Also sustained attainment of quality expectation will result in great customer

satisfaction. If Jose’s have less complains regarding their quality service then there is
strong possibility of making regular customer which will flourish their business in
long term.

2. What is the restaurant’s cost of poor quality?

Cost of poor quality in restaurant environment can be defined as failure of customer

satisfaction as per promised earlier. This could reflect in long term business objective
as well as compensation paid to unsatisfied customers.

In today’s competitive environment every single company try to excel in terms of

their quality, reliability, availability, value for money, performance and friendliness of
their staff. It becomes extremely highly sensitive especially in restaurant business
where all factors mentioned above become compulsory.

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First and most important, quality can be identified by whether and how well a product
or service meets customers' needs and desire when in actual use. This is the first
quality checkpoint. Far more common, quality is checked by final inspection of the
food on completion. Final inspection prior to service is the second quality checkpoint.
The third checkpoint involves the actual service delivery process. The quality of the
stock that are use for cooking meals can be examined and assessed when the materials
are delivered by suppliers and vendors. This is quality checkpoint four. Finally one
can go to the suppliers and examine how they produce the materials they provide, to
assess the quality control they exercise. This is quality checkpoint five.

Source: By Marshall Sashkin, Kenneth J. Kiser - The 5 Quality Checkpoints

In order to sustain reputation of restaurant business, some costs are avoidable and
some are incurred anyway in order to deliver best service to its customers.
However, there are costs which can be prevented in order to sustain standard of
service at restaurant. These are the support activities which are designed to reduce
number of errors or mistake in restaurant business. Additional manager are hired in
order to monitor and supervise quality standard through their experience.

There is also inspection cost or Appraisal cost involved in restaurant business which
are incurred to identify any mistake, right mix of spices or overcooked or any
unhealthy food before they serve it to customer.

It will be restaurant Internal failure cost, if they spot on any mistake before they serve
it to customer. In that case they have to re cook the whole order, which will incur

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additional cost and extra waiting time. They might have to offer free wine in the
meantime as goodwill gesture towards customers. This could also increase the waiting
time for other customer waiting outside. There are possibilities that they could go
somewhere else rather than waiting for their turn. This negligence will reflect as loss
in business in financial terms.

External failure cost can incur by having complain from customer which will incur
additional cost like free voucher to make customer happy, side dish free of charge or
offering totally free of charge service. It could also lead to lawful action against
restaurant if they are not maintaining hygienic or unhealthy food as per Food Standard
Agency requirement. Restaurant could end up paying heavy penalties or shutting
down restaurant by health department.

3. Use some of the tools for improving quality to assess the situation at José’s.

Problem solving process is logical sequence in order to get rid off quality issue and
problems and improve the standard of decision making.

Total quality management can be implemented at Jose's restaurant to improve quality

to assess situation. Having right method is one of the most important jobs of senior
management and success obtained will depend on their knowledge and understanding
of these tools. Total quality management may not be helpful if not used properly. It is
also important in order to identify which TQM method should be use. No matter what
size of problem or complexity issue it has got, it can be solved by proceeding through
a sequence of steps. This ensures that everything possible will be done by applying
the available TQM methods in the most effective manner. It also gives the opportunity
to choose a number of options and to select the best solution.

If Total quality management is applied at Jose’s it will be considered as a problem

solving process which will run as continuous cycle and it will give wide range of
possible solutions and then deciding on the most best option. It will be continuous
approach and the narrowing of the options that makes the Total quality management
process so powerful.

If Total quality management is implemented at Jose's it start with simple procedure;

teams should be designed to solve particular problems. However, total quality
management deals with quality issue of restaurant, which is based on need to satisfy
the customer and eliminate existing problems permanently.

The basic role of Total quality management methods in problem solving for quality
improvement is to help meet customer requirements and to satisfy their demand. This
method also shows possible causes of problems and optional solutions, it uses data
information to select best option which could be in favour for managing quality. To
implement Total quality management, it will be necessary to apply methods in daily
business routine.

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The use of tools and techniques is the most visible evidence of Total quality
management. It is however, also the most superficial indicator of Total quality
management and cannot be relied on as such. Statistical tools alone cannot lead to
quality or Total quality management. Group problem-solving techniques like
brainstorming or the nominal group techniques may help teams solve specific work
problems, but they will not lead to Total quality management, even when every team
has been trained to use them. The respected American quality consultant Joseph M.
Juran has said that 'a good way to lose time in improving quality is to focus on tools
and try to apply them'

Brainpower and rational thinking are considered to be most basic and general tools
and it can be done at Jose’s. This is expressed most clearly in the Plan-Do-Check-Act
(PDCA) cycle, this technique made popular by Deming.

The four steps in the cycle involve exactly what they state:

First, plan carefully what has to be done. Next, do it and carry out the plan. Third,
check the results or do survey report which you got from your plan. Did the plan work
as it should be, are customers satisfied with your service or not, or were the outcomes
different or undesirable? Finally act on the results, both positive and negative. This
means identifying what worked as planned and what did not, then taking these results
into account to develop an improved plan and start a new PDCA cycle. The four step
PDCA sequence is really nothing more than a straightforward rational problem-
solving process.

Computers and management information system (MIS) can do wonderful job of

turning data into information and producing massive automated reports on demand.
It can also take reservations online and process order online. It can also show you how
much stock you have used so far and how much is needed for the following day/week.
It will also keep track of the amount spent on stock which will be useful for
management to find out how much profit they have made so far.

However, only the human mind can make sense of what is happening to cause
problems. In order to do this, people do not normally need huge stacks of computer
printout. What they do is carefully designed, timely, and accurate counts presented in
straightforward ways. Even more important is thinking through what one wants to
happen. In this sense, problems arise when something doesn't work as we planned or
expected.

Factors in Total quality management at Jose’s will be educating staff and give more
training. It might be possible if teams start to look at quality management problems
without proper training they will be demotivated and become disheartened. If quality
issue is not identified accurately and the total quality management method selected for
solution based only on data analysis, then the problem will not be eliminated forever.
In addition, the quality improvement process needs to be managed by an effective
leader to ensure that proper implementation is achieved. By applying total quality
management methods and not fluctuating from one step to another before completion,
the quality team will have a much greater chance of completing the task successfully.

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References:

Gopal K. Kanji, Mike Asher

Marshall Sashkin, Kenneth J.Kiser

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