Q a) Explain the 5 TQM performance objectives. Discuss these with the help of a real life example of a process involving products & services, and analyze how the process can be improved upon?
b) Illustrate & explain your chosen process with the help of a transformation model.
Answer a) “Many methodologies and techniques for improving operational performance have been developed over the years – these provide structured ways of improving company performance, but they do not explicitly tell us where to start. To be able to improve performance effectively, it is important to identify the particular factors of performance to work with. Furthermore, it is important to find those factors that have a high impact on performance.” (www.emeraldinsight.com) Performance improvement highlights processes and systems that need to be improved. Then, there is a follow-up with an action plan to improve the outcomes. The five main performance objectives are:
We will discuss these five objectives using the drive-thru process of McDonalds:
• Speed- How much time does a customer spend in McDonalds drive-thru? McDonalds’ drive-thru target is 90 seconds. But, is it really able to achieve this target? No, not all the time. Many people have complained about drive-thru errors, waiting for their meals in busy times, being stuck in the queue, etc. As the line gets longer, more people choose to bypass the restaurant and dine elsewhere. So, how can McDonalds overcome these problems?
? Proper drive thru management: Since queuing is on a strict first-in first-out basis; later customers are generally not served until all previous customers have been taken care of. Therefore, a whole line of people with quick orders can be held up by a single complex order. McDonalds can instead have a dual line layout & if the second customer’s order is ready first, then a green light can be used to signal the second car, so that the person takes his/her’s order & goes. Service times are improved dramatically for short orders, yet not impacted for longer orders due to multiple wait queues.
The disadvantage of adopting the dual line layout is that it will take up a lot of time & be costly for McDonalds to change the layouts of all their restaurants. Plus, some customers will get really annoyed if they came in first but served second. To overcome this, McDonalds can have two windows (both left & right), the left one for large orders & the right one for small orders. Again, the question is how the small order meals will be bought to the right window if the kitchen is on the left side. Well, an employee can be especially dedicated to transfer the meals from the left window to the right one!
? Introduction of the use of mobile order entry terminals: will allow a restaurant employee to physically go to the drive-through lane and enter orders, which increases through-put by providing two points of entry: the menu sign and the mobile order entry terminal.
Problems associated with this option include: (1) interfacing the mobile entry terminal to the current POS (Point of Sale) system; (2) supporting multiple languages and interfaces; (3) constant menu changes and additions; (4) safety of the employee; (5) weather conditions; (6) hardware costs; (7) order sequencing; and (8) the customer is unable to review the menu prior to ordering.
? Adopt a new system: McDonalds can also adopt a new system called Delphi Order Confirmation where a digital camera is attached to the drive-through menu system. “When an order is placed, a photo is taken of the car and/or the driver from approximately the same angle and distance that the drive-through employee would view when the car is at the payment or presenter window. The digital photo would be matched to the order record created by the POS system. The photo and order record could be presented in a variety of fashions, including a print out on the receipt with the itemized order and number. Alternatively, a touch screen with the patron’s picture and order record for each of the cars currently in the drive-through, and when the order is complete, the presenter would tap the photo on the touch screen indicating the order has been filled and the photo record would be removed from the system. This system will help shave about eight seconds from the order to delivery time. Besides order accuracy, it will also aid in speeding up the drive-thru process and address customer courtesy issues. Specific benefits to this system include easy installation and implementation with existing QSR (Quick Serve Rest) drive-through installations; minimal ongoing support required; limited risk of hardware loss/damage; increased employee safety; fully supported in multi-language settings; and continues to provide the customer an opportunity to review the menu!” (www.freepatentsonline.com)
People will be uncomfortable: with the idea, that they’re being photographed every time they make a quick stop for a double cheeseburger with fries. Though, it’s a “non-invasive” procedure & the photos aren’t stored in the system. They’re deleted as soon as the order is completed. A lot of restaurants already have surveillance cameras on their premises that photograph people. Another trouble is that it will be costly for McDonalds to implement this system. But then again, it will show good results in the long run!
• Cost- Is McDonalds charging a lot to its customers? Can they bring down its costs further?
? Value meal strategy: McDonalds can employ the value meal strategy which allows customers to buy a sandwich, french fries, and beverage at a discount when purchased together. Moreover, it can also offer daily specials of special menu items, such as “9 Dhs Happy meal on Thursdays, from 4:00 PM – 8:00PM” or other similar specials. More number of people will be attracted by such offers & hence McDonalds’ average cost will decrease. However, the limitation is that these daily specials will bring in a lot of customers but also make it harder for McDonalds’ staff to handle so many people together & serve quickly!!! So, they should anticipate having so many customers & moulding their operations according to that.
? During busy periods, McDonalds requires more than two to three people who are dedicated to the drive-through process. If it adopts the Delphi order system mentioned on page 2 & 3, it will not require a lot of employees to take the orders, enter in the system & make mistakes in matching the orders with the cars, hence cutting down on its costs. However, this might lead to some employees being made redundant.
? Use Customer order Display: When a drive through worker is taking an order, it can be displayed automatically on a screen available to the customer outside, called the Customer Order Display (COD). The customer can review the COD and correct any mistakes, thus making the ordering process more precise. More precise orders eliminate time wasted from correcting mistakes & the cost arising from order errors.
? Energy management: Energy costs represent a significant portion of restaurant expenses. Parking-lot lighting, cooking appliances, ventilation systems, & other utility expenses can add up. These are very real costs that impact the profitability of a restaurant. McDonalds can invest in new equipment (which might be costly but beneficial in the long run), maintenance practices and revising some operating procedures. “Some cost-cutting strategies include are, investing in energy-saving equipment, securing long-term energy contracts, joining energy co-ops, controlling lighting schedules more efficiently, tinting windows, contracting with new energy providers, hiring energy consultants and decreasing deliveries, regular cleaning and upkeep of refrigerator coils. Furthermore, a calendar with the recommended maintenance dates for all parts and equipment, including monthly, quarterly and annual checks can be made.” (www.restaurant.org)
• Quality- Where does McDonalds stand in terms of is service? Not as good as it used to be. Probably the meals are okay, but what about the employees serving the customers & the overall experience which the customers go through?
? Surprise quality checks: For sure, all McDonalds restaurants already go through periodic inspections in terms of quality checks, but they can have more surprise checks & if the store fails to pass the inspection the second time, the corporate can take over the store and bring in better employees to ensure that the proper processes and equipment are being used properly.
? Improve the training process & taking care of employees: McDonalds can include online e-learning tools for its restaurant staff. In addition to this, it should make sure that the needs of its staff are met & they are given recognition for good performance. Once this is done, automatically they will be happy to do their jobs & of course happy employees will lead to a better service & eventually happy customers!
• Dependability- How can McDonalds make its processes more reliable?
? If McDonalds opts for dual line layouts & a reliable system like Delphi order confirmation system (mentioned on pages 2 & 3,) then without any doubt its customers can rely on its operations. They will be sure that their meals will always be ready within a specified time without any errors & they’ll be able to get out quickly with the dual line layout.
• Flexibility- Can McDonalds adjust its processes to meet customer requirements?
? Multiple trained staff: McDonalds can have a multiple trained staff in order to be flexible. Again, this will cost money but be beneficial in the long run.
? Ordering on a toll free number: McDonalds can give their customers the option to place their order by calling on a toll free number & giving them a unique order number so that their meals are ready when they come to pick them up. The drawback is that an employee will have to be specially delegated to take the orders when customers call!
“A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers. Where the inputs are raw materials, it is relatively easy to identify the transformation involved, as when milk is transformed into cheese and butter.” (openlearn.open.ac.uk) Where the inputs are information/people, the nature of the transformation may be less obvious. For example, a hospital transforms ill patients (the input) into healthy patients (the output).
Figure 1: The transformation model
The transformation model of a McDonald’s drive-thru process will look something like this:
Figure 2: Transformation model of McDonalds drive-thru
A customer enters the drive-through in his/her vehicle along a path and stops at a sign/menu-board that contains a menu. The customer is prompted by an order-taker to order his/her’s desired meal. Once the order has been confirmed, the driver proceeds (while his/her meal is prepared & packed) toward a drive-through pickup window, in queue behind any previous cars, where the driver submits his/her payment to a window person and then receives his/her food. Some restaurants use a two-window system during busy times, whereby the driver pays at a payment window and receives his food at the pickup window.
Figure 3: Drive-thru process shown in pictures
Inputs & Output
Some inputs are used up in the process of creating goods or services; others play a part in the creation process but are not used up.
Three types of resource that may be transformed in operations are:
• materials – the physical inputs to the process
• information that is being processed or used in the process
• customers – the people who are transformed in some way.
Many transformation processes produce both goods and services. For example, McDonalds provides a service, but also produces goods such as food and drinks. Transformation processes may result in goods/services (output) that are designed to deliver.
A further component of the transformation model in Figure 1 is the feedback loop. Feedback information is used to control the operations system, by adjusting the inputs and transformation processes that are used to achieve desired outputs. For example, a chef relies on a flow of information from the customer, through the waiter, about the quality of the food. Adverse feedback might lead the chef to change the inputs (for example by buying better quality potatoes) or the transformation process (for example by changing the recipe or the cooking method). Feedback is essential & can come from both internal and external sources. Internal sources include testing, evaluation and continuously improving goods and services; external sources include those who supply products or services to end-customers as well as feedback from customers themselves.
To sum up, operations performance is an important functional area because it plays a crucial role in determining how well an organization satisfies its customers. Moreover, an understanding of the principles of operations management is important for all organizations, because they provide a systematic way of looking at its processes. Furthermore, the overall transformation process can be further broken down into a series of micro-processes. Attention to processes ‘within’ organizations can provide a powerful tool for understanding organizational performance & minimize errors.