Managing Operations Essay

 

 

 

Introduction

Hong Kong Pizza Hut was established in 1981 and currently has less than a hundred restaurants all over Hong Kong. For almost 20 years of service to provide excellent food and services, Hong Kong Pizza Hut is now serving dine-in, take-outs and delivery service. Today, there are already more than 30 delivery specific locations and 20 restaurants that provide delivery services. With the theme, “Teamwork for Customers”, that serves as the core of corporate culture; Pizza Hut is now the largest pizza and pasta chain restaurant in Hong Kong (pizzahut.com.hk 2007, p. 1).

As the years gone fast, Pizza Hut Hong Kong mad a lot of transformation first before attaining the impressive growth that they are now experiencing. One of which is the recent plan of the acquisition of new call center in 2005 in order to increase the volumes of sales of the company. It is said that delivery call can reach up to 10,000 males per hour and only 200 telephone workers have been hired to handle the said voluminous number of calls. According to the marketing director of Hong Kong Pizza Hut, Eunice Wong, the said transformation is not for the purpose of reducing the operational costs but rather to grow the business through increasing the volume of sales (Lee 2005, p. 1). What basically the new call center will do is to make able the company to acquire more orders especially during peak hours. Meal deliveries and takeaways comprise the majority of the company’s sales, that’s around 55 percent of the HK$800 million sales. Because of the said reason, Wong adapted the acquisition of new call centers. She assures the present employees of the company that there will be no losses of job positions with the implementation of the proposed marketing strategy. Way back in a few years, Hong Kong Pizza Hut management suffered in a sales depression that gave them losses. It is after the first implementation of the call centers to help the company in getting the orders of their customers; they again experienced a growth in the sales returns. Based from their previous experiences, they were able to come up with such marketing strategies.

Just like any other normal companies despite of the impressive growth that they are experiencing, Hong Kong Pizza Hut faces a lot of problems with regards to their daily operations. One of which is the clamor of their labor union for the increase of their wages (asianfoodworker.net 2006, p. 1). This is problem is already not new to any businessman or managers operating large number of employees. As for the labor union members, what they are being after with was to receive the right amount of salaries that is really intended for them. Because of the said problem between the management and the labor union, the company experienced negative effects in the operations of the business. There are times that the employees will go to the streets and organize rallies for them to voice out their rights and welfare.

Customer Requirements

There are two types of customers that are involved in the production of the goods of Hong Kong Pizza Hut; they are the internal and external customers. Internal customers are those individuals that are anyone that can be relied on to complete a certain task or a function. Usually the Internal customers are the staff itself of the company. On the case of Pizza Hut, one internal customer is the chef or cook of the company that relies most on the quality of the raw materials or ingredients from the inventories of the storage manager. If there would be any shortage in the supplies of the ingredients, the production procedure would not continue its process thus causing a delay in the serving of the client’s order which is the external customers.

In order to achieve this customer requirements based on the corporate polices and operations, Pizza Hut management could give awards to those employees that showed effectiveness and efficiency. The said award could be a monetary or non-monetary in value, or, impose greater sanctions for those personnel that did not perform their function well, like the storage manager for this case. This strategy would support the already existing policies of the company and should give a good effect to the overall performance of the production process. If the sais strategy would work, cooks will no longer have any delays in the preparation of the orders of the customers since the supplies of the ingredients will now be just enough because of the tighter management on the inventories. Moreover, the CEO of the said company should make some changes in the operational structure of the organization if there arise some inefficiency on the production area. External customers are those individuals that are simply the member of the general public that are very important to the company. The quality of the service to the external customers lies on the efficiency and effectiveness of the internal customers of the company. Without the external customers that come into the company stores buying pizzas would make the company fails. Therefore, it is very important for the company to make the customer feel that they are valued at all the stages of the sales, like pre-sale, during sale and after sale, so as to have them purchase again the company’s goods. External customer’s satisfaction is very important to the company this is the reason why there are customer service to most of the organizations in the market.

The company could use the Robust Design or the Taguchi Method in achieving the said above strategies. By definition, this method is a process that focuses more on the enhancement of the fundamental functions of the product or the process of producing it. This helps to reduce the costs and improvement of the qualities of the products. Based from this method, the company should make less variability on the production process. For instance, there is a deviation of the employee’s performance to the customers as compared to the target performance of the management. Therefore, the operations manager could use the Quality Loss Function of the Taguchi Method in order to identify the deviation of the employee’s performance to the expected performance of them to the customers. With this, the operations manager could see where to start from solving the depreciation of the customer’s satisfaction. As for Hong Kong Pizza Hut, they are using the so-called customer feedback in order to monitor the satisfaction that customer’s receive with the service of the staffs and crew of the company. Based from the comments and suggestions of their client, the management could now adjust their service and make some necessary changes if there are really inefficiencies in the conduct of the operations. Another way in which the company could get information regarding customer requirements is through interviews and surveys. With this kind of customer priorities gathering, it is very important to ensure the company knows which requirements are most important to meet. Some of the customer requirements that are being surveyed can be classified into four types namely; solutions to the problem or inefficiency, design specifications, customer needs and customer benefit statements (Ulwick 2003, p. 1-2). In order to meet the said customer requirements subject to the company’s corporate policies is through making some adjustments and improving some of the concerned aspects of the operation. For example is the shortage of the ingredients for the making of pizzas, if the problem lies on the human errors or inefficiency then the general managers should focus on that aspect of the operation. Determine the root of the problem and give necessary sanctions to those concerned employees for them do their work effectively. If the problem lies on the manner of delivering the ingredients, then, the manager could think of other delivering services to ensure the availability of the raw materials so as not to affect the operation of the company. There are times that general managers of an organization fail to make innovations to their organization because of not successfully identifying the needed requirements of the customers both internally and externally. With this, the managers are being advised to determine only the useful information based from the type of business he is managing. As for Hong Kong Pizza Hut, the customer needs and benefits are the most important customer requirements in order to successfully create new products and to transform innovation into an organized and convenient and controllable business process. As for the process of getting surveys to the customers, Hong Kong Pizza Hut could hire survey or poll companies that would make the said information gathering to the clients of the company. For the problems regarding the internal customers, the manager could call for a regular meeting assessing the competencies of each of the employees with regards to the fulfillment of their respective tasks. With this, the manager could determine which group has to be improved or need some guidance in order to make their assigned task done properly and effectively. The company could also check if the design process conforms to what is the standard for the company. For instance the tastes of Hong Kong Pizza Hut’s pizza are different to the tastes of the other Pizza Hut stores abroad. With this, the company could loose customers loyalty for the latter is after to the taste of the “real” Pizza Hut. This method of checking if whether the company conforms to the standards of Pizza Hut Corporation is called as the Quality of Conformance. In order to apply this method, the organization could send their cooks for workshops and re-orientation of the processes involving the preparation of the different food lines of the company. Through this, the operations manager would be sure that their products conforms to their mother company and conforms to the tastes of their customers.

Design of Processes and Systems

There are a lot of processes that are involved in the operation of Pizza Hut store. In this paper, I would only consider two of the operational processes; they are the inventory and work method.

The first process is the inventory which is defined as the total number of goods and/or materials in a store or factory at any given time. It is very vital for the operation of the business to be aware of the remaining number of raw material that is needed to ensure the continuous operation of the organization.  As for the Pizza Hut, the storage manager should see to it that there are enough supplies of tomatoes, flours and other ingredients needed in preparing a pizza. As for the store manager, he needs to order more of “food based” on their present supplies and menu requirements. Surpluses of raw material could also cause losses to the company. Perishable goods should be ordered only at the right amount in order to avoid having unused raw material because they are too many for the consumption of the cook or the customers. The number of raw materials should only be on the right amount, avoid shortages and overages. One of the most famous methods of inventorying is the “par system” (Pollick 2007, p. 1). Par system works on this way; say there are 20 tomatoes, 18 cheese and 15 bell peppers stated on the inventory on the storage room, the preferred number of each item on the par sheet states that there should be 40 tomatoes, 35 cheese and 25 bell peppers, then the manager of the store knows that they need 15 tomatoes, 17 cheese and 10 bell peppers in order to reach the par number. The par system determines the right amount of items that should be on the storage room in order to have the operation of the Pizza Hut continue and be able to serve the customers with the right quality of pizzas. Inventory is also important to any organization in such a way that its level helps to attract more investors. The less the inventory of a restaurant would mean that they don’t have enough number of supplies in the storage room and that serves as a basis for judging the financial capabilities or status of the organization. As for the factory industry, since the one that is being inventorying is the product and not the materials, the more goods in the storage building would mean that the product is not that appealing to the public that they were not able to market those goods in the storage building to their target client. As a rational investor, investing into such organization would mean a great loss. It is therefore important for the managers to monitor their inventories to ensure the operation of the business and to attract possible investors. The Hong Kong Pizza Hut should assign manager/s to the storage inventorying to ensure the adequacy of the number of raw materials of the company to perform its operations. The management could also hire additional employees to back-up the operations especially during the peak hours of the operations. There should be a clear delegation of the responsibilities in order to avoid any role confusion as the operation takes into process. Like, there should be a person who will check the number of supplies in the storage room, a person that will contact their suppliers, a person that will contact the delivery company and a person that will supervise the transactions of the suppliers and the delivery company to check the performance of the latter.

The second process that I mentioned is the work method. Work method has something to do with the organizational and the employee’s requirements and various elements to form a job as well as the considerations of health and safety of the employees on their working environment during working hours. Another definition of work method is the stating the contents and manner of performing certain job or work. It tackles the methodology of a certain task or job as well as the place of completing the said job and the person accountable for doing the job.

Managers must state the work design to the employees from the very start of hiring them in order for them to be assured of having an employee that conforms to the standard operating procedure of the company.  As for the Pizza Hut, they should have a chef that would bake pizza just like any other Pizza Hut stores all over the globe. The chef should follow the right process and use the right ingredients in order to conform to the “real taste” of a pizza from a Pizza Hut. Customers should not experience eating a pizza that seems and tastes different form any other Pizza Hut store available in Hong Kong or even from abroad. Since Pizza Hut is a franchising business, they really should follow the original recipe of baking a pizza since it is included in the agreement of the purchasing the name of the business. If the customer will not be satisfied with the taste of Pizza Hut’s pizzas, then, the store manger could send their chef for a training in order to acquire the needed skills in preparing a pizza and to ensure the quality of their product. The person that is in-charge of hiring the cooks should hire the one that conforms to the specifications of the company to ensure the acquisition of skilled cooks. There are some instances that the said person in-charge hires cooks because of connections or referrals from other employees of the company. Moreover, there should be personnel of the company that will check every now and then if there is a schedule of workshops or orientation of the cooks.

So as to make the suggested process that I have given more applicable here are the proposed steps on how to attain the said improvements. First is on the part of the inventorying, the storage manager for a restaurant such as Pizza Hut, they should always check their supplies every now and then. What I am proposing is to conduct an inventory check ups on the first three days of the week. This is to ensure that the operation for a specific week will have an enough supplies to produce the end product. As for the work method, I suggest that there should be a re-orientation of the cooking processes so as to ensure the food follows the standard tastes and to have a maximum quality of the foods. This re-orientation activity will take place every first day of the week. With regards to the workshop, there are times that the mother company of Pizza Hut would introduce new product lines or food. Therefore, cooks will have to attend the workshop in order to train themselves on how to prepare the said new food line. The Gantt chart of the improvements on the processes of the organization is given below.

Fig. 1 Gantt Chart of the improvements that will be applied in the organization.

 

Controlling the Implementation

To back-up the strategies that are being presented on this paper, there should be a project that would back up those strategies. One of which is the establishment of a farm for some of the raw materials for the company. This would cut cost since there will be no longer middlemen that would be included in the prices of the goods. This also helps to be sure of the quality of the raw materials because there are tomes that the supplier’s goods are of low quality and are not fresh. Another advantage of this project is that, the organization is ensure of the raw materials for their operation since there are times that the supplier of the company has a shortage of the materials that they needed and result from searching for other supplier that has the material that they need. With the aid of this project, Pizza Hut will have continuous supply of raw materials by effectively managing a farm that will produce their needed ingredients. The implementation of this project would start by purchasing a land not far from the store and hiring of the workers for the said farm. The company should assign a manager that will supervise the farm as well as its employees. After the acquisition of the land, the next step is the purchasing of the machineries and seeds. After having these necessary factors of production, the farm can now start its operations. The manager of the farm should see to it that the goods that are being produce conforms to the standards of Pizza Hut, like the sizes of the goods and the level of ripeness.  After harvesting the goods, the next step is to deliver the goods to the storage room of the company where the custody of those raw materials will be now turned over the operations manager of the organization. Basically, the farm will work independently and if there are any surpluses on the harvested goods, the farm could sell it to other restaurant stores to gain additional profits. If there are any deviations on the planned project and the actual one, the manager that is in-charge of the farm should make the necessary adjustments on the operation of the farm in order to conform to the specifications of Pizza Hut.

On the other hand, re-orientation is a little less expensive than with the inventorying for it only covers a few numbers of the working days of the cook. The chief cook could handle the re-orientation of other cooks to ensure the compatibility of every cooking style. There could be times that the schedule of the re-orientation of the cooks will be move due to other factors such as the availability of the chief cook or of the cooks. It could also be number of shifts that each of the cooks has. The more the available time of the cooks, the more they could tackle about the standard way of cooking Pizza Hut foods. The last part of the methods of work would be the workshop. For sure, there would always be a slight deviation of the planned scheduled from the actual ones since workshops sometimes requires the cooks to travel abroad to attend the latest procedures in cooking a certain food line. In order to spend less money as they could, organizations try to lessen the number of their participants to the workshops, usually of a number of one or two participants. This could be costly in such a way that the company is the one that would shoulder all the expenses of their cook/s.

After the proposed project has been implemented, it is now the task of the operations manager to compare if whether the parameters of their projects were satisfied. If there is a discrepancy between the proposed projects compared to the actual one, then, the operations manager should determine the factors that contribute to the deviation of the parameters of the proposed project. For instance, the manager should arrange the schedule of the remaining cooks if there are any changes in the date and other related matter regarding the attendance of their cooks to the workshops or orientation to their mother company.

Monitoring and Evaluation

After all of the preparation that has been done, it is now time for the operations manager to critically guard the level of the customer service that they are extending towards their clients. Surveys would not always be enough. There are times that operations managers needed to go on “floor” in order for him to see what is really happening on the “battlefield”. By this, operations managers could give judgments regarding certain issues concerning the services of their staffs on the customers since he has experience what other ordinary worker are also experiencing. Another way by which operation managers could improve their customer’s service is through examining the sales of the store for each day and relating those data on what ever event that happened on the store. It may be a cause of the staff or just a natural factor of everyday operation of the store. For instance, the sales of the store turn down on the month and during on the same month, one of your employees served a food with cockroaches on the plates to one of the customers of the store. With this the operation manager concerned could conclude that the reason for the decline in the net sales of the store is because of the incident that was made by one of the stores employees. Proper organization of the store records and the ability of the operation manager to interpret those available data in a more useful purpose could really be a good means of achieving the goals of the organization as a whole.

As for the resource utilization performance, the operations manager should determine if the company is using all of the available resources effectively and efficiently. One of the resources of the company is the human resources or the employees. The operations manager must evaluate the lower level manager with respect to the manner they manage their subordinates. This can be done through the monitoring of the attendance of the employees or the number of times the employees come to store late. Every second counts on the operations of a restaurant store. This is the reason why the organization cannot afford to have a lot of cases of employees being late in going to work.

With regards to the ways on how will the operations manager will going to evaluate the performance of the staffs of the store, there are many ways to choose from. One of which is the evaluation sheet. Evaluation sheet enables the operation manager know the opinion of those group from which the person belongs and the respective rating of the group member to the performance of the concerned employee. On the evaluation sheet could also provides comments and suggestions to the concerned employee in order for him/her to further improve the current level of performance that the employee has. The rate of the employee’s performance could range from 0-100%. After having all the evaluation sheets of the employees, it would be better if the operation manager would give the individual with the highest rating on the evaluation sheet a reward or award as the, say, crew of the month. This would motivate the staffs of the store to work efficiently and effective for the attainment of a higher customer turn outs.

With regards to the comments and suggestions of the staffs from one another, this could serve as a basis for the operation manager of the store to make necessary adjustments, if possible, on the groupings of the employees of the store since there are times that a certain staff cannot perform this task well, but after reassigning the staff to other unit or group they become more productive to his/her new task. Sometime, friendship ties could be very useful for the alleviation of the performance of the staffs. There are instances that a staff work more efficient if he/she is assigns to a department or group from which one of his/her friend already belongs to. With this, the manager was able to utilize the data that are included in the evaluation sheet.

At the end of every quarter, the top managers of the company should conduct meeting reviewing the current status of the company with respect to the level of the attainment of their goals, may it be short terms or long term goals. This is important in order to give the top managers a bird’s eye view of their position in the market. They should evaluate the organization as a whole so as for them to realize the areas of the organization that needs to be improved. Moreover, they should determine how far they deviate from their original plan down to the processes of implementation to avoid further deviation to the “true” goal of the organization.

Summary

Similar to all other businesses, operations manager serve as the individual who plans and organize the existing resources and processes that a certain business entity has. Hong Kong Pizza Hut, the largest pizza and pasta chain restaurant in Hong Kong, is just one of the many stores in Hong Kong that gives more premiums to the operational managers for the latter has been playing significant roles those other types of managers. The problems with regards to inventory ad work method, which is more frequent to experience in the everyday operation of the store, is included in the jurisdiction of the operations manager. Thus, we were able to enumerate the possible ways by which manner will those problems will be addressed by the said type of manager.

Talking more of the operations manager, we were able also to find out that it is very important for the managers to give more attention to the level of customer satisfaction that they are offering to their client. It is a must for the operations manager to make a necessary move to improve or to resolve problems in line with the quality of customer services.

It is also the task of the operational manager to device ways on how he/she will evaluate the performances of his/her staffs. Monitoring the individual performances of the staffs is one way of preventing the occurrence of any disturbance in the harmony of the working environment. The operations manager is also responsible for the provision of analysis of the difference between the planned and the actual outcomes of a certain project or process. It is the job of the operations manager to make necessary adjustments in the area of operation that is needed to be organized.

Recommendation

After presenting all the facts and arguments in this paper, I would recommend this paper for the consumption of those individuals researching on the responsibilities of the operations manager and its significance to the business operations.

This paper could also be useful for those students making an analysis regarding the demarcation line of the responsibilities of different managers within a certain organization. I had presented in this paper various roles of the operations manager, one type of a business manager that can be compared to other scope of responsibilities of the other types of managerial position. Moreover, this can also be use in case studies analysis and in depth understanding of the numerous factors on the efficiency and effectiveness of the employees of a certain organization given a certain situation in the management processes.

As for the general public, this could also be consumed in such a way that this provides the back ground of Hong Kong Pizza Hut and its operational processes that could explain and ensure the customer of the said store of a quality food and service as they make their way to the counters of Pizza Hut.

In general, this paper would be very useful for any purpose in the management community provided that it is focusing on the managerial processes, its types, scopes and responsibilities. As for the other field of sciences, in sociology, this paper could be a great help in explaining how working relationship is being established and on the field of socialization, the factors that drives the occurrence of it and the intervening events that would add up to the total effects of the behavior of the society as a whole.

 

 

REFERENCES

Lee, M. (20 September 2005) Call center aims to give Pizza Hut bigger bite. URL: http://www.thestandard.com.hk/news_detail.asp?we_cat=2&art_id=1670&sid=4637030&con_type=1&d_str=20050920

Hong Kong Hotel and Catering Union Targets Scandal of Indecent Wages in Fast Food Sector. URL: http://asianfoodworker.net/china/060831fastfood.htm

Our History. URL: http://www.pizzahut.com.hk/en/about/history.html

Pollick, M. (2007) What is Inventory? URL: http://www.wisegeek.com/what-is-inventory.htm

Ulwick, A.W. (2003) The Strategic Role of Customer Requirements in Innovation. URL: http://www.strategyn.com/pdf/TheStrategicRoleofRequirementinInnovation.pdf