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“My Compliments to
the Chef, er, Buyer“
Operations Management
Prof. Ying Jiun Hsieh
Papaya Milk: Jason, Jimmy, Nick, Rachel, Richard, Sandy
Outline
1.
2.
3.
4.
Case Introduction
Question Discussion
Conclusion
Questions and Answers
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)
Question Discussion
Question 1
Explain the meaning of the phrase
“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
“Hours“: Outsourcing to
save time, increase profit
“Ours“: In-House solution
to control quality
Example Outsourcing vs In-House
• Fast casual restaurant - Fuddruckers
In-House Burger
Preparation meat, bread, toppings, sauces
Toast bread, grill
meat/cheese
Outsourced Burger
Receive meat,
bread, toppings,
sauces
Time
Toast bread, grill
meat/cheese
Assembly Burger (meat,
bread), toppings choosen by
cutstomer
SelfService
Assembly Burger (bread,
meat cheese, toppings)
Service
Question Discussion
Question 2
What advantages are there when
restaurants 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
Question Discussion
Question 3
What are some important disadvantages
or limitations of outsourcing for
restaurants?
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’s reliability
Question Discussion
Question 4
Do you consider restaurant
outsourcing to be dishonest?
Unethical? Explain.
In our opinion
• We focus on restaurant
-can provided food faster
-capability-price-ratio
-feature
-health
*
If the restaurant can suit our demand 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 )
Question Discussion
Question 5
Does restaurant outsourcing increase
capacity? 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,but don’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!”
Questions and Answers
References
• Operations Management by William J. Stevenson (11th
Edition).
• http://www.tripadvisor.ca/ShowUserReviews-g2086961d3846663-r152832353-Sandy_s_Family_RestaurantMildmay_Bruce_County_Ontario.html
• http://www.makingthingsoutofnothing.com/post/4250212
6421/control-100-of-your-core-outsource-everything-else