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IOA Analysis, Jollibee Restaurant, Operation and Process Management Module Technical Report · June 2019 DOI: 10.13140/RG.2.2.32347.62243

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Online Assignment Submission Student ID Number:

1735120

Programme of Study: Master in Business Administration Module: Operation and Process Management Assignment Title: IOA Analysis, Jollibee Restaurant Date and Time of Submission: December 19, 2016, 11:30

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Introduction The focus of this study is specifically analyzing the service and queuing problem of a Jollibee outlet in Negros Occidental, Philippines. This study is to provide discourse diagnoses of these problems. The focal point of this analysis is the data from the 3rd week of October, the highlight of the MassKara festival in Bacolod City, Philippines. Where approximately 500 customers (walked-in transactions) dined at Jollibee during the peak period of 10am to 2pm. They received around 30 customers complain within that period. (Source: Lampon, Jollibee Bacolod Manager) We can cay that the situation was unavoidable during the day of the highlight of festivity in one of the biggest city in the Philippines and the outlet is full of people.

The polar diagram

Performance Map

shows comparison Cost

of Jollibee from the top food chain restaurant in the market today in order to exhibit

Mc Donalds is faster with its volumes and be;er supply chain.

Cost of burgers Jollibee’s burger price are cheaper than Mc Donalds

Dependability

Speed

Jollibee’s market Market

standing.

Only slight difference with the quality. Both are fasBood chain

Flexibility

Quality

Almost the same however, Mc Donalds have fewer menu that Jollibee.

Organizational background: Jollibee Restaurant, Philippines is a large company with 2,933 stores worldwide outside the Philippines with branches in: USA (26), Vietnam (32), Brunei (11), Jeddah (7), Qatar, Hong Kong, and Kuwait (1 each), “firmly establishing itself as a growing international QSR player”. (Jollibee, 2016) Jollibee is 3-market segment, the other 2 are: Greenwich (pizza-pasta

fastfood

segment)

and

Chowking

(Oriental Food Market). Its latest acquisition and master franchise are: Red Ribbon (cake and pastry) Mang Inasal (Barbecue chicken) and Burger King,

Jollibee outlet. Photo from: https://insideretail.asia/wpcontent/uploads/2015/08/Jolibee.jpg Accessed: December 10, 2016

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Philippine outlets (Jollibee 2016) Filipino taste being introduced to the world with its distinct “pinoy” taste incorporated to some of the rice menus is one of the competitive advantage of Jollibee. As Philippines had been colonized by different races such as: Spanish, Chinese, Americans, Malay (to name the few) it is easy to capture foreign taste buds with its richly flavored rice menus and Americanized burgers. As of January 2015, Jollibee, with system-wide retail sales received 82.1

Four V’s billion pesos for the fiscal year 2011. Jollibee orders varies from outlet to Volume Low

High

1,000 and more burgers a day

Variety High

Low Variation

High

Low Visibility

High

outlet with volume with approximately

Low

(Philippine

outlet

based)

Jollibee

offers rice menus aside from the usual burgers, pies, pasta, chicken and beef meals. They serve different menu during breakfast: during 6 am

Mc Donalds has 34,492 worldwide While Jollibee has 3,000 stores worldwide

to 11 am.

Picture of Jollibee menu and prices provided by Lampon (Jollibee Bacolod Manager)

Methodology The theory, tools, techniques and concepts that I am going to use with my analysis are: process map, to be able to illustrate some of the main restaurant operations in both counter and kitchen, supply chain management, in order to analyze the operational requirements and if they are being 3

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met. Perception mismatches, which, is also essential on how to further, improve customer’s satisfaction and bridge the gap between Jollibee and the customers. Bullwhip effect and bottleneck, to determine the sources of the problem and how to rectify them. Little’s law: Cycle time and through put time is used to determine the processing period. Precedence diagram is used together with process map to illustrate the cycle time and methods of the different processes.

ANALYSIS Performance Objectives Workforce: Jollibee crew works per shift basis in Bacolod oulet, here is an example: 6:00am to 10:00am

Counter: 6 Kitchen: 9

Dining: 5

10:00am to 2:00pm

Counter: 8 Kitchen: 11

Dining: 7

2:00pm to 6:00pm

Counter: 7 Kitchen: 11

Dining: 6

6:00pm to 8:00pm

Counter: 7 Kitchen: 10

Dining: 6

Jollibee Bacolod is a 24 hours outlet, schedule above selected for time of operation when most people visits. Service Process Map: Jollibee counter operation/receiving order process based from Six Sigma material, 2016 and from figure 5.3, Operational Management (Slack et al) as well.

Below is the process map for kitchen. Only 3 of the many menu was selected for illustration. The precedence diagram (Slack et. al) shows the estimated and fix cooking time of food.

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Process Map combined with Precedence Diagram

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5

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Supply Chain Management Jollibee Restaurant is a fastfood restaurant and returns of customers are the source of the company’s success. Sales are coefficient on the velocity of service. Jollibee’s “order qualifier” (Shulver, 2016), which is fast service and quality product during short lunchtime at peak periods, is the target of the daily operation. During this time as well, is when most of the customer’s complain arises when target is not met. When the customers are rattling famished, speed of service is the top priority and the demand focus process. The restaurant’s operation is vulnerable the most at that period. The crucial reality of the fastfood service is that when there are alternatives, customers have the tendency to go elsewhere next time due to the delay of orders thus increase risks of lower dependability and affecting company’s reputation. Jollibee’s Mission is to “To serve great tasting food, bringing the joy of eating to everyone”. Their unique menu combination is one of the company’s strength as well as Jollibee’s prices are low, which cost/price range from $0.9 to $2, variety of menu is high and service is good. For the fact that Jollibee is a Philippine food chain always compared with Mc Donalds, to be able to survive the international market and keeps on growing means that, as a whole, Jollibee fulfills its Supply Chain Management efficient in its operations and processes. This explains the relations of the supply chain principle (Slack et al) in this aspect that performance of the operation of this study “does not necessarily reflect the performance of the whole supply chain” (Slack et al). On the contrary, “The lifeblood of any restaurant is the return customer.” (Kharasch, 2010) if many are not satisfied, this is a risk to the business. It costs a fastfood chain a lot more than the hourly rates a restaurant is saving by cutting back one employee when one customer is not satisfied and does not return. (Scardapane, 2010) Jollibee’s long-term plan at operation follows the same instructions daily. It is almost the same as the other fastfood chain like Mc Donalds which in fact originated the assemble line system that Jollibee uses as well. The flexibility of Jollibee is low especially peak hours, as they could not cope up with changes in circumstances such as level of demand thus affecting the dependability. (Slack et.al) “Unsatisfactory customer relationships can be caused by requirements and fulfilment perception gaps” (Slack et.al) In order to understand the perception mismatches, Jollibee has to understand what the customers needs.

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Table below based from Figure 7.6 Operational Management (Slack et. al) as well as based from customer’s complain and reactions during the focal period of this study:

Friendly service

Requirements Perception gaps

Fast Service

Jollibee performance gap

Jollibee

Customers Jollibee improvement gap

Efficient

Slow Fulfillment Perception gap

Customer’s wants friendly service yet at peak hours, they get anxious when they have to wait long in both queue and orders.

Bull whip effect: One of the difficulties Jollibee faces is high variability. (Slack et. al) Menu choices are many which makes it difficult to project and control the unexpected increase of orders. When kitchen get delayed in providing products at the food rack, the delay of order arise. Unfortunately, those cooking time they can control are those, which have longer cycle time as well. The queueing and delays of orders which are linked to bull-whip effect. (Slack et. al) The changes in the process affecting the operation. The cashier avoids delay on his/her part by trying to avoid wrong punch. Cashiers are trained for fast key-in technique in which they could punch a 1 menu order in less than 5 seconds, usually, customer’s decidedness refer whether they have their orders selected before they approach the counter, therefore, a fast service can be rendered in 3 minutes providing all orders at the same time during counter transactions which will save a lot of time waste. The counter’s intent of shorter throughput as much as possible is important. In order to control the queuing situation, Jollibee deploys extra crew, to take advance ordering from customers usually starting from the 5th or 6th person in line. If how many will depend on the manager’s decision. The extra crew advance calls the customer’s order to the counter. This is to notify the kitchen for food preparation and so customers can go away from the counter. The socalled counter runners’ assists cashier in preparing drinks, relays advance call and follow-up items from the kitchen, which could fasten the process of order preparation.

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C1 = 15 customers

Counter runners C2 = 19 customers

C3 = 14 customers

C1

C2

C3

C4

C4= 17 customers *Photo of a Jollibee counter

Busy

arrival

started

at

around

10am

with

distribution of a wider dispersion at the time period of 10am to 12pm with approximately 60 seconds arrival time in between. But it is difficult to

Fixing exact “throughput time” (Slack et. al) per customers is inefficient and undistinguishable especially peak period due to high variability.

determine if the walk-in flow was consistent within that period.

Throughput and Cycle time of the counter Yet, we can assume that based on the numbers provided above, we can calculate the throughput time per counters as follows: Throughput time = work in process X cycle time. The work in progress here is the customer. C1 = 15 (customers) X 3 (min) = 45 minutes for all the customers of counter 1 be served. C2 = 19 X 3 = 57 minutes C3 = 14 X 3 = 42 minutes C4 = 17 X 3 = 51 minutes We can already see that if the cycle time per customer is 3 minutes, at long queue, customers have to wait for a long time to get their meal.

When extra crew for advance calls were deployed, let’s assume that: Throughput time = work in process – advance call X cycle time = C1 = 15 – 7 = 8 X 3 = 24 minutes C2 = 19 - 9 = 10 X 3 = 30 minutes C3 = 14 - 5 = 9 X 3 = 27 minutes C4 = 17 - 8 = 9 x 3 = 27 minutes 8

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The throughput time is down to almost 45%, yet within 30 minutes of waiting is still a long time for hungry eaters.

Variable Arrival Time: Counter In order to show the variable arrival time within 60 seconds arrival time, here is based from figure 5.15, Operations Management (Slack et al) from Counter 1 of the first 10 customers: C1 Customers

Arrival time

Start of Activity

End of Activity

Wait time

1 2

10:00

10:00

10:03

0 minutes

10:03

10:03

10:06

3 minutes

3 4

10:06

10:06

10:09

6 minutes

10:09

10:09

10:12

9 minutes

5 6

10:12

10:12

10:15

12 minutes

10:15

10:15

10:18

15 minutes

7 8

10:18

10:18

10:21

18 minutes

10:21

10:21

10:24

21 minutes

9 10

10:24

10:24

10:27

24 minutes

10:27

10:27

10:30

27 minutes

Already long waiting time

Kitchen Through put and cycle time In order to determine the cycle time of the 3 products in the process map on the page 5, we determine the cycle time of Burger: Burger Throughput time = work in process X cycle time. The work in progress here is the burger. 10 pcs is 1 batch C1 = 10 orders C2 = 15 orders C3 = 14 orders

51 orders all in all

C4 = 12 orders Work in progress 51 orders X 3 minutes cycle time = 153minutes or 2.55 hours to serve all orders

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Yet Jollibee prepare in advance and cooking continuously therefore within this figure let us say that 25 Burgers were already prepared: 25 advance cooked – 51 current orders = 26 burgers remaining, therefore: 26 customers are informed that their burgers will be followed up. Yet the cycle time in volume orders stretches. As 1 griddle can accommodate 10 patties, here to illustrate as follows: 10 patties = 10 minutes or 600 sec Buns = 10 X 17 sec = 170 sec or 2.8 min Toppings = 10 X 10 sec = 100 sec or 1.6 min Wrapping = 10 X 3 = 30 sec 10 X 10 sec = 400 sec or 6. 6 minutes for the remaining process Overall total: 1300 sec or 21. 6 minutes Buns are being toasted while patties are being cooked therefore: 1300 sec – 170 sec = 1130 sec or 18.3 minutes approximately for all 26 burgers to be finished. Hence 1 griddle can accommodate 10 Burgers, therefore: 26/2 = 13 Burgers 10 burgers can be delivered in first come first serve basis in 9.15 minutes, therefore, the first 10 of 26 customers will get their orders within 9 minutes, the rest of the remaining could be served within the same cycle time with a total waiting time of approximately 18 minutes. Planning and control Jollibee keeps track of the inventory in the kitchen requisting or the distribution center ships the necessary items on a regular schedule instead of waiting for a request from the restaurant. Supplies like patties, spaghetti sauce and fries are mass produced in a factory and then frozen. Restaurants

store

frozen

foods

in

big

refrigerators and re-heat to cook them when needed which requires the same amount of cooking time always. (Wilson, 2016) Going back to the cooking time, there are exceptions

Some of the common product shelf life: ü Bread: 2 days ü Vegetables on the working table: 2 hours ü Cooked meat: 15 minutes ü Frying oil: 3 days

in food like patties which are tricky to cook as griddles do not have built-in timers. Spaghetti sauce as well do not have a fix heating time since it depends how frozen the sauce is. All food is FIFO basis. Jollibee follows the same instructions for cooking, dressing and packaging the food as long term process.

Conclusion: Lack of projection, long throughput time, uncontrolled bullwhip effect and high variability are the causes while queuing and delays of service occur. As this study is applicable during all peak and 10

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unexpected rise of customers, the process became uncontrollable, therefore, leads to customer dissatisfaction. The wide menu variety of Jollibee is an advantage yet also affects the throughput time in all operations. When all orders being accepted at the same time during counter transactions, there is no projectivity in advance notifying the kitchen ahead of time, therefore, delays are unavoidable.

Recommendation: Jollibee could invest for an automated order machine like this one located near the entrance of Max Restaurant, Sweden, The function is to key-in orders and skip the queueing and wait for the number to appear on the screen for customer’s to claim at the separate counter intended for picking up advance orders only, therefore, customers can just locate a seat right away providing customer options, aside from the counter registers. This is a very effective tool beneficiary to both counter and kitchen and will solve the queueing and delay as well as will give the kitchen proper projection prioritizing what to cook which will save a lot of time. Therefore, the outlet is ready in any sudden customer Max, Sweden order machine. Photo from https://www.yelp.com.au/biz_photos/maxstockholm5?select=2t3QK6hn92ZO8lYtL_uvkg Accessed: December 19, 2016

rise up (bullwhip effect) and be able to control the situation. Another solution is to avoid crew in running like headless chickens at the counter or kitchen. Many time wasted

seeing crew crisscrossing in their stations. What I did when I was a Fastfood Restaurant Manager similar to this, is that, I give time to know the strength and weaknesses of my crew. I put the fast ones at the counters and kitchen, and the slow ones at the dining. As most customer’s attention is at the counter when they are waiting for their food. I also assign example at the griddle 2 or 3 crew where the space is more and the items are individual handling. Most of the orders are burgers, therefore, the outlet needs more burger, so I needed more crew to cook them. I as a Manager stays at the kitchen during peak hours. I also assist in cooking. I could see what is missing in the kicthen and could assign tasks systematically at that moment in quick decision-making avoiding time waste. During the hectic operation, tasks needs to adapt to the situation, therefore, I could not state specifically since most of the decision making arise in focusing on the demand. I just needed to know who is to where. The cooking methods with cycle time of course are the same as standard procedures. I maximise the use of “counter runners” (the term is changeable depends on the fastfood chains). While the customer is ordering, the counter runners listens and already prepares the items mentioned. They also keep tracks on the ordering while notifying the kitchen right away. My cashier almost never leaves the register unless needed. I have this notion the moment the cashier leaves, the customer feels abandoned. So while the customer is giving out his/her orders, 11

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the counter runners are already working on it, therefore, when the customer is ready to pay, his order is ready for carrying. These counter runners are also trained cashier so they can take turns when needed. Dining crew mostly knows what to do, yet they are also flexible, I just re-assign them in stations, which needed more workforces. One could not perfect an operation. Yet, the target is to minimise the problem as much as possible.

References: Not all are usage are listed in reference, most from Operations and Process Management, Slack et. al, 2015 Jollibee, (Online) Available from: http://www.jollibee.com.ph; Accessed: December 05, 2016 Little Law, (Online) Available from: https://bookshelf.vitalsource.com/#/books/9781292017877/cfi/203!/4/[email protected]:37.9 Accessed: December 16, 2016 Process Map, Operation Strategy and Management, Slack et. al 2015 Six Sigma Process Map (Online) Available from: http://www.six-sigma-material.com/Process-Maps.html Accessed: December 15, 2016 Max, Sweden order machine. Photo from https://www.yelp.com.au/biz_photos/max-stockholm-5?select=2t3QK6hn92ZO8lYtL_uvkg Accessed: December 19, 2016 Jollibee outlet. Photo from: https://insideretail.asia/wp-content/uploads/2015/08/Jolibee.jpg Accessed: December 10, 2016 Fast food fast (Online) Available from: https://www.qsrmagazine.com/ordering/fast-food-fast Accessed: December 17, 2015

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