Competing through Operation: KFC Report Essay

August 3, 2017 Economics

Introduction

The study focuses on KFC – the taking poulet fast nutrient eating house in the universe. and one of the largest participants in the fast nutrient market. By utilizing five public presentation aims and assorted research methods. the study aims to analyse how the eating house perform and pull off its operation capacity in order to supply qualified nutrient and service to the clients.

Besides. the restaurant’s capacity constrains and capacity schemes are discussed base on the primary informations from KFC Union Street. Bristol City Centre. It would associate to the relationship between Capacity scheme and five public presentation aims ( Slack et al. 2004 ) . every bit good as. how they support each other.

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Company PROFILE

KFC first starts in 1930s. when Harland Sanders opened his eating house in Corbin. Kentucky. KFC now spreads out to more than 100 states with around 15500 mercantile establishments worldwide. Of these. there are more than 800 eating houses located in the UK.

The eating house has concentrated on fried-chicken-on-bone merchandises under the name Original Recipe and expanded the offers with other points include lily-livered sandwiches and lily-livered wings. every bit good as. biscuits. mashed murphies. maize. murphy cuneuss and sweets. The new line-grilled poulet with fewer Calories. fat and salt than the Original Recipe- was launched in 2009. It was called “one of the biggest new merchandise rollouts in the history of the company” by the KFC president Roger Eaton. Being tested in many parts included the UK ; this new line has been good received as a healthier option which retains good in gustatory sensation.

The undermentioned portion will discourse about how KFC applies five public presentation aims ( Slack et al. 2004 ) into its operation and which of the five aims is concentrated on.

FIVE PERFORMANCE Aim

The theory has been applied for many companies worldwide for over 10 old ages in order to pull off operating public presentation. Due to the restriction of resources. each company tends to set merely some of the five aims in precedence during peculiar periods. It is considered as one of smart methods to maximise net incomes.

Beginning: ( Adapted from Slack et Al. 2004 )

FIGURE1. FIVE PERFORMANCE OBJECTIVES

Figure 1 explains the thought and significance of five public presentation aims ( Slack et al. 2004 ) in general.

Quality is the duty to ever supply the good merchandise or service that company has claimed. It besides requires making the right thing at the right clip and run intoing client specifications. which give client satisfactions. In KFC. chief factors listed as Quality aim are quality of nutrient ( delightful. tasty. fresh. healthy. etc ) . quality of service ( clean. supportive. friendly. etc ) …

Speed is defined as how fast the company responds their clients. This is one of the most of import things required in fast nutrient eating house. particularly in first-come-first-serve hours. Using to KFC eating house. velocity aim is considered as the elapsed clip between customers’ puting orders and the nutrient or services being delivered.

FLEXIBILITY measures how much assortment in merchandises. services. and solutions for a dynamic market environment in order to run into customers’ demand. It is shown as KFC’s assorted bill of fares. the launch of line “Grilled Chicken” . the more customization. etc

DEPENDABILITY is making things on clip as promises. It non merely additions customer’s trust but besides has an influence on cost. which are salvaging money. salvaging clip and giving stableness to better the efficiencies ( Strecker. Ulrich. 2011 ) . In KFC. it is on-time bringings.

Cost is the merchandise or service monetary value that enables company vie the market. every bit good as guarantee the return. The company aims to maximise their net income ; hence. cut downing the cost is necessary. Cost nonsubjective in KFC is measured by the cost of nutrient. cost of director and staff’s wages. etc.

The Polar diagram below shows how KFC eating house performs in director. staff and client positions base on the information that was collected.

( Adapted from Slack et Al. 2004. p58 )

FIGURE2. POLAR DIAGRAM OF KFC RESTAURANT

The Polar diagram is designed by the consequence of KFC manager’s interview. staff’s questionnaire and customers’ questionnaire ( Appendix 1. 0. appendix 2. 0 and appendix 3. 0 ) .

Harmonizing to KFC director. the eating house is executing rather good in quality. cost and dependableness aims while velocity demands to better. particularly in first-come-first-serve hours ( 16:00pm to 20:00pm ) . Staff and clients have the same sentiment about bettering velocity aim in KFC. “Although we have 8 queues” – as the director – “it is difficult to function a big figure of clients at 19pm. However. we tend to give the staffs more training Sessionss to increase their velocity in taking order and cookery. Concentrating on people will force up dependableness. flexibleness and velocity all. ” ( Appendix 3. 0 ) It is the fact that most of the clients want a lower monetary value for their nutrient and services. However. with a fixed monetary value ticket. the eating house tries their best to turn out that the nutrient and service offered to clients are deserving their paying.

The following portion of study will concentrate on how the eating house meets its customer’s fluctuating demand.

Capacity

The capacity of an operation is the highest degree of value added after certain period of clip that the procedure would be able to accomplish under certain conditions ( Slack et al. 2001 ) . It includes: existent end product. design capacity and effectual capacity.

FIGURE3. CAPACITY OF KFC RESTAURANT ON UNION STREET. BRISTOL

Planned losingss Evitable losingss Actual capacity 1929 people Planned losingss Effective capacity 2331 people Design capacity 2680 people

( Adapt from Slack et Al. 2001 )

The figure is resulted from computations below.

DESIGN CAPACITY

Design capacity is “the capacity which its proficient interior decorators had in head when they commissioned the operation” ( Slack et al. 2001. p335 ) . The KFC eating house on Union Street is the largest KFC mercantile establishments in Bristol which can function maximal 100 clients a twenty-four hours ( approximative figure from KFC director ) .

Design capacity

Daily

100 people

Weekly

670 people ( 7 working yearss. less on the job hours on Sunday )

Monthly

2680 people

EFFECTIVE CAPACITY

While design capacity is “everything harmonizing to a plan” . effectual capacity helps to demo what might go on if something non goes as a program. Effective capacity is calculated as design capacity subtraction planned losingss. which is 13 % ( from KFC director ) .

Effective capacity

Daily

87 people ( 100 – 100?13 % )

Weekly

582people ( 670 – 670?13 % )

Monthly

2331 people ( 2680 – 2680?13 % )

ACTUAL OUTPUT

Actual end product is the sum of a merchandise that a production installation really produces. as opposed to the sum that it could bring forth if it were to run at full theoretical capacity. It is calculated as design capacity subtraction planned losingss and evitable losingss which is 15 % ( from KFC director ) .

Actual end product

Daily

72 people ( 100 – 100x [ 13 % +15 % ] )

Weekly

482 people ( 670 – 670x [ 13 % +15 % ] )

Monthly

1929 people ( 2680 – 2680x [ 13 % +15 % ] )

Planned losingss: Public holidays ( Christmas. New Year. etc )

Human issues ( Illness. pregnant … )

The clip clients waiting to be served

Evitable losingss: Weather ( Storm. heavy snow. etc )

Machine failure.

Capacity CONSTRAINTS

Capacity restraints are considered as factors that limit the figure of clients served by operation ( Dettmer. 2003 ) . For KFC. these are: figure of staffs. figure of waiting lines. available eating infinite. velocity of cookery and delivering. These factors would force the eating house to its bound points of operation. which called Bottle cervixs.

NUMBER OF STAFF: There are many displacement of working hr a twenty-four hours in KFC. The maximal figure of staffs that needed in first-come-first-serve hr is 12 people about ( with 8 front-men taking customers’ orders and cleansing. 2 middle-men doing Burgers and french friess. and 2 cooks in the kitchen working strenuously ) . At the busiest hr. the staffs face force per unit area of excessively many clients waiting in the waiting lines. deficit of nutrient available. and the muss in eating topographic point. 2 or 3 front-men have to do Burger and french friess in order to supply nutrient on clip.

NUMBER OF QUEUE: It frequently happens in the fast nutrient eating house that long lines of clients are waiting to be served. Although KFC Union Street has 8 waiting lines. it does non intend that there are ever staffs available.

AVAILABLE EATING SPACE: It is difficult to happen a clean tabular array in haste hours because of the big figure of clients and the busy staffs.

Speed OF COOKING AND DELIVERING: To guarantee the fresh of nutrient provided to clients. the middle-men merely do some available. Hence. if a large order is placed or many orders are placed at one time. it will take clip to do more Burgers.

Some restraint factors would be solved by staff’s working flexibleness. some. nevertheless. could non avoid because they links to other factors. For illustration. KFC could do more Burgers available to avoid customers’ waiting clip and increase velocity public presentation aim ; nevertheless. the nutrients will non every bit good as the just-in-time 1. which reduces quality public presentation aim. Therefore. it is indispensable for the eating house to make up one’s mind which aims are precedences.

The analysis of KFC’s capacity and capacity restraints lead to the following portion which will discourse about which scheme it uses to pull off the operation.

CAPACITY STRATEGY

( Sasser. 1976 )

There are 2 groundss from the informations collected that shows Chase demand program ( Sasser. 1976 ) is the scheme KFC following. There are different staff Numberss and the sum of nutrient ready in a twenty-four hours.

Due to staff contracts. the director arranges a big figure of staffs for first-come-first-serve hr. which is from 16:00pm to 20:00pm each twenty-four hours while cut down staffs at the gap ( 9:30am ) and the shutting clip ( 22:00pm ) . In 30 proceedingss before shutting. the kitchen stops working and the front-men focal point on cleaning instead than standing behind order topographic point. This agreement is based on which clip clients normally come to the eating house. It helps cut down cost of staff wages and avoid human excess on the clip non many clients. Besides. working flexibleness is required for all the staffs. which are ability of working in different places ( forepart. in-between or in kitchen ) . making different undertakings and even overtime. if needed.

The other one – sum of nutrient ready in a twenty-four hours – does demo that KFC is using Capacity leads demand theory ( Sasser. 1976 ) . KFC ever provides the sum of nutrient somewhat over than customer’s demand so as to guarantee available service in working clip. The nutrient left alterations to waste because it could non be stored due to KFC’s quality criterion. This waste. harmonizing to the director. is non important and enables to bear with. From the analysis above. it is clear to see that KFC is making right because the scheme non merely fits to individuality of fast nutrient market. but besides expresses KFC’s customisation. which extremely focus on satisfy its clients.

After discoursing approximately five public presentation aims ( Slack et al. 2004 ) and capacity scheme ( Sasser. 1976 ) . the concluding portion will clear up relationship between those and how they support each other.

THE RELATIONSHIP OF CAPACITY STRATEGY AND FIVE PERFORMANCE OBJECTIVES ( Slack et al. 2004 )

Before holding scheme. the aims have to be set. It could be merely explained that aims are the topographic point you want to drive to while scheme is vehicle that helps to acquire at that place. For KFC as a whole. the company expresses its concentration on Quality objective through the slogan “Don’t concern. Eat happy” ( hypertext transfer protocol: //www. kfc. co. uk/dontworryeathappy ) and assorted actions to be healthier for the clients. such as “Get fresh inspiration from our Deli Deluxe Range” . “We’re contending trans-fats. non flavour” . “We’ve done off with 25 % of concentrated fats” . or “Fitted out with green energy” . etc. Quality is known as the critical factor to vie with other large trade names like Subway. MacDonald’s. Burger King… . and derive fast nutrient market portion when customer’s wellness concern is increasing more and more.

( hypertext transfer protocol: //www. propertyweek. com. Domino’s pizza tops the market article )

FIGURE4. FAST-FOOD MARKET SHARE IN THE UK

However. for smaller graduated table. harmonizing to the director of KFC Union Street. the eating house put Speed aim as their first precedence to endeavor because choice criterion every bit good as publicities is already fixed. “It is KFC Company’s occupation to upgrade and distribute out how good the nutrient is. ” – Said the director – “Our occupation is to supply nutrient with the same criterion. and serve the clients those come to our eating house best services. and it is speed” . Hence. the eating house tends to increase the factor it can command. which differentiates it among the others.

Following the nonsubjective above. the Chase demand program ( Sasser. 1976 ) is decided to do it done. This scheme fits to fast nutrient restaurant’s individuality so as to use clip. human. and money resources. Then. sing either capacity lags demand. which allows demand ne’er less than capacity or capacity leads demand ( Sasser. 1976 ) . which is that capacity ever meets forecasted demand. KFC Union Street chose the 2nd 1. The eating house gives up waste in order to break its service for clients. Amount of nutrient available reduces waiting clip for presenting. every bit good as. waiting clip to be ordered. The clients would be more satisfied thanks to fast service.

Decision

To sum up. the study is designed from consequence collected at KFC Union Street. Bristol. With five public presentation aims ( Slack et al. 2004 ) . capacity. capacity scheme ( Sasser. 1976 ) analysis. it clarified how KFC operates and how theories links to each other. every bit good as. are applied into pattern with peculiar fortunes.

Mentions

Dettmer. H. W. . 2003. Strategic Navigation: A Systems Approach to Business Strategy. ASQ Quality Press.

James. P. . Rowland-Jones. R. . O’Brien. L. . 2010. Operations and Business
Systems direction. 2nd Ed. . Harlean carpenter: Pearson.

Samuelson. Paul A. . Nordhaus. William D ( 2009 ) . Economics. 19th Ed. . McGraw-Hill Higher Education.

Slack N. Chambers. S. . Johnston R. . 2001. Operations direction. 3rd Ed. . London: Pittman Publishing.

Slack N. Chambers. S. . Johnston R. . 2001. Operations direction. 4th Ed. . London: Pittman Publishing.

Slack N. Chambers. S. . Johnston R. . 2001. Operations direction. 5th Ed. . Harlean carpenter: Prentice Hall.

Schoenborn. G. . 2009. Personal Communication.

Strecker. S. . Ulrich. F. . 2011. Information Systems and E-Business Management. A patterning method in support of the brooding design and usage of public presentation measuring systems [ e-journal ] 7 ( 1 ) . Available through: Springer.

hypertext transfer protocol: //www. kfc. co. uk/dontworryeathappy

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