O

perations Management
By Ahmed Ismail 2021-22

Contents
1- The Swift, even flow (TSEF)...............................................................................................................2
2- Process Analysis..................................................................................................................................5
3- Types of customer’s Variability and examples....................................................................................8
3. B How Paramount responds to each type of variability.........................................................................10
4. A) the idea of carryout orders................................................................................................................11
4. B) Benefits of carryout orders...............................................................................................................12
4. C) Impact of carryout orders on dine-in customers:...............................................................................12
5) Management decision for carry-out orders............................................................................................13
Recommendation:......................................................................................................................................14
6. References.............................................................................................................................................15
 1- The Swift, even flow (TSEF)
(Schmenner, 2012) described the swift even flow (TSEF) is defined as a productivity booster
which lowers the cost and enhances the quality and smoothen the flow of process through
different tools either in manufacturing environments or services. Generally any process output
relies on machines, labor and materials flow. Moreover, Swiftness of materials flow impacts
overall productivity. In addition production procedures were explained through four models (Job
shop, batch operations, assembly line and continuous outflow). Job shop was described as
complex process due to high variability of production which is time consuming and requires
extra work. Moreover, Variation of production needs a lot of attention to cost, duration of
processing including setup and workers time. Job shop is a double edged weapon which can
benefit the business given the variety of products provided to customers. On the other hand it can
be a massive disadvantage due to complexity which can delay the production process and affect
the cost as well (Schmenner, 2012). The Continuous flow process is defined by its name,
through managing bulk production especially in consumer goods continuously. This model
mainly relies on time span, processing raw materials to finished goods and smooth movement
between production phases can be simply estimated using the continuous flow process. Worth to
mention that this type of process is usually used in food production, oil refining and paper
manufacturing (Schmenner, 2012). The Batch Flow process was described as a consistent flow
of production of different products and equipment are sharing same functions instead of
producing same products. Duration, Cost and process flow are considered the main drivers for
batch flow process. Worth to mention that usually fixed production is set through batch flow
model and transferred to warehouse to fulfill orders demand. The line flow process is perfectly
described through assembly manufacturing process for instance; Cars and computers assembly.
Said process is characterized by product based design with machinery setup in sequential
model to produce final good. Smooth movement through production phases reducing the work
in process inventory which enhances the turnaround time. Moreover, flexibility occurs in the line
flow process being not fully automated like continuous flow (Schmenner and Swink, 1998).
Operations divides processes into two categories, value added and non-value add. Value added
operations usually coverts raw materials to finished goods while non-value added not included in
conversion process but considered as supporting operations. Moreover, law of variability in a
process points to customization and variety in production which have some advantages and
disadvantages, relating to the job shop model, variability is a flexible method However, due to
the customized nature a delay process duration is expected due to the routing of materials
through process along with higher cost which affects capacity utilization (Ahmad et al., 2018).
Likewise, Schmenner and Swink, 1998 agreed on the impact of law of variability on the process
productivity given the variation are process phases affecting the smoothness speed of process
flow, meaning the higher the variability the lower the speed of the process and linking this to the
job shop.

Law of Bottlenecks defined as a constraint in the process which affects the total output and
lead to delay in process, it was discussed that bottlenecks can be mitigated rather than being
eradicated, this mitigation through utilizing non-operational functions during the
bottlenecks(Schmenner and Swink, 1998). Furthermore Ahmad et al., 2018 supported the theory
and added that bottleneck affects the swiftness of the process and these constraints can be
through raw materials, finished good or work in progress.

Law of quality highlights the importance of raw materials, product design and work in process
quality improvement to enhance the productivity. Worth to mention that higher process quality
leads to fewer bottlenecks.

Referring back to value-added and non –value added productivity, it was agreed that any work
that do not contribute in transforming material to final good is a non-value-added work, and
classic seven wastes were discussed being ( Overproduction , waiting , transport, Stocks,
motion , defects and unnecessary processing steps) (Schmenner and Swink, 1998). According
to (Ohno,1998) Overproduction was defined as transforming raw materials to finished good or
going through process without certain demand to avoid further waiting. Likewise, (Shingo, 1989)
and (Liker, 2003) agreed to the definition and highlighted this waste as producing too much
goods for no actual demand.

While Waiting was described by Ohno, 1998 as a deferral in actions of the actual conversion
process leading to extending the process time unnecessarily. For example; this delay can be due
to machine downtime or bottlenecks or getting of stock which leads to a delay in the whole
process duration (Liker, 2003)
Transportation waste was discussed by Shingo, 1989 as a delay or waste of time occurring due
to moving materials or finished goods during the process. Also, Liker, 2003 agreed to the
previous definition and added that moving materials or goods for more distances or proceeding
with insufficient movements will be a waste of time during the process and affecting overall
productivity.

Over-processing was discussed being a waste in the process given lack of value analysis and not
realizing the non-importance of this product to customers leading to proceeding with unneeded
steps through the process (Shingo, 1989). Furthermore, over-processing was described as
designing unnecessary products for customer or higher quality than needed by consumers leading
to waste in the whole process (Liker, 2003).

Inventory waste can be resulted from excess in materials processing or through work in process
along with damaged good through processing leads to process delay. (Shingo, 1989)

Unnecessary motion can be inefficient movements for employees during the process while
those movements do not add value to the process itself (Liker, 2003)

Defects can be considered the scrap exists during the process or producing defective goods
leading to time and effort waste during the process (Shingo, 1989) .

The Effectiveness of Swift, even flow theory was reflected in many industries such as the
medical sector, for example in hospital or a clinic patients flow is so important were challenges
and bottlenecks exists as part of the process including paper and admin work and ensuring a
swift flow of patients will result in better performance and productivity along with protecting
patients, for example, swift process is applied on emergency patients to reach a steady condition,
while other units even flow for other units such as operations and surgery flow should be
matched as well with emergency patients directed to those departments. Mismatching flow will
result in delays and leading to bottlenecks. Said bottlenecks can be mitigating by forecasting
flow and allocating staff to said units, this can be done through calculating variables such as
patients flow, Beds utilization percentage and number of staff members along with calculating
the average length of stay for patients, ensuring the smoothness of the process and enhancing the
total productivity for the hospital (Devaraj and Kohli, 2013). Linking to” SEF”, the Theory of
performance frontiers was discussed and described as the maximum productivity could be
reached from a set of inputs (Schmenner and Swink, 1997). Furthermore, the infrastructural
aspects making up the performance frontiers were discussed being (technology used, factory
design and production policies), factors were divided to structural and infrastructural in
production process (Vastag, 2000).

2- Process Analysis
Inputs

 Customers must get their food first before getting seated.

 Customer can wait more than hour before ordering breakfast
 Carry-out order only represents 10% from total orders / eat the eggs first because it will
get cold
 Breakfast 7am - 4:30pm , after 4:30 closes for 30 minutes and reopens for full
services till 10pm

Process:

 In the morning 30 customers queuing in front of the restaurant,

 Peak times between 9 – 11 am / Waiting time approx. 45 minutes
 4 cooking stations in the kitchen
1- Waffle station
2- Griddle station “for omlette, pancakes, French toast and home fires”
3- Grill station: for sausage and bacon
4- Bowls, oat meal and fresh fruit were prepared.
 Combined average cycle time for four chefs was approx... 40 seconds
 Two employees prepare drinks( fulfilling drink takes an employee 45 seconds per
customer ) , meaning that 1 employee productivity = 45/2= 22.5
 Processing payment took 1 minute per party, and average party= 2.6 customers , to get
in seconds per employee , therefore 60/2.6=23.07 and 23.07/2= 11.53 / employee
 Average table turnover = 19 minutes , in seconds = 19*60 = 1140 seconds
  Eating time per customer = 1140/44 = 25.9 seconds and Assuming capacity is 80% *
44 seats = 35.2 seats
 Eating time per Customer is 1140/35.2= 32.3 (Assuming capacity is 80%)
 Through Analyzing the process phases as stated above , it was observed that the
Bottleneck is the food preparation phase , surpassing payment, drink fulfillment and
other process phases , therefore food preparation reaching 40 seconds would be
considered the bottleneck.

 Flow Rate = 1/CT , = 1/40= 0.025*3600= 90 customers per hour

 Service rate = 90 customers per hour

Table 1: Customers per hour arriving on Saturday

Hour Slot Number of Number of Net number Adjust to nearest

customers customers of customers whole number
arriving per balking or arriving per
hour from reneging per hour e.g. 72 goes to 70
Exhibit 6 hour from e.g. 77 goes to 80 etc.
Exhibit 7
7:30am – 8:30am 35 + 45 = 80 15 65 65
8:30am – 9:30am 35 + 42 = 77 4 + 12 = 16 61 60
9:30a n m – 42+92 = 134 21+30= 51 83 80
10:30am
10:30am – 11:30am 47+ 61 = 108 27+18= 45 63 60
11:30am – 12:30pm 26+50 = 76 5+21= 26 50 50
12:30pm – 1:30pm 46+22 = 68 11+7 = 18 50 50

Highest net customer arriving/ hour = 80 as highlighted above on the table

 ρ=γ /μ , P = 80/90= 0.888

 Average customer waiting time before getting served = p/u(1-p) = 0.888/90(1-0.888)= 0.888/
90*0.112= 0.888/10.08= 0.888
 Avg. number of customers waiting for being served= LQ= P²/1-P = (0.888)² /1-0.888=
0.780/0.112= 7.035
 Customers wait time = 7.035*1.5 (assumed 90 customers/ hour) = 10.55
 As per Exhibit 6, 35 customers should be queuing on Saturday morning, therefore, on
Saturday wait should be 35+10.55= 45.55
 45.55*1.5= 68.32 minutes

In Case of carry-out processed by 10% increase, assuming that 81 orders will process in
restaurant and 9 orders will be carried-out

P ¿ γ / μ = 80/81=0.98

Lq= P²/1-p= (0.98)²/1-0.987=0.974/0.013= 75

2. B Paramount’s seating policy:-

Dine-in always striving to expand their sales volumes through getting more customers. However,
limited seating is always representing a barrier for most of the restaurants and it not applicable
because of the limited resource. Various techniques can be used to increase the table turnover
and improve the sales volume. Yet, Quality, Bottlenecks, efficiency and customer satisfaction
should be taken into consideration and not to be negatively impacted. Several methods can be
used such as highly training staff, seating layout, furniture used (Not too comfortable), restaurant
design and lighting. Furthermore, restaurants need to have higher turnover to enhance sales but
not an empty restaurant because this affect the restaurant image. therefore, it should always be
balanced were the environment of a busy restaurant is existing but avoiding bottlenecks and
customer can enter have their meal an go(Robson, 1999).The unusual seating policy for
paramount is apparently unique, by asking customer to order and pay and after grabbing their
order the can have a seat , the reason behind this avoid any table reservation or unnecessary
occupying tables along with making sure of the availability of tables to customers in store.
Given the nature of paramount’s business of selling fast food along with high traffic in store
required a creative model to reduce the table turnover time. Moreover, high turnover restaurants
usually achieve better results, numerous factors are affecting turnover were some of them were
mentioned above. Though, one of the main factors is the seating policy, restaurants needs to
provide a satisfactory experience for dining in customers. However, too comfortable and slow
turnover seating policy would lead to higher customer time in store which will impact overall
turnover and will not fit a fast food restaurant, that’s why seating layout, policy and furniture
used in store should be taken into consideration to achieve higher turnover without affecting
customer experience negatively. Balanced model should be applied to keep the restaurant busy
giving a positive impression without creating bottlenecks through seating turnover. Worth to
mention that booth seating reduces the average waiting time for seating and achieve higher
turnover. Paramount’s seating system supports dynamic flow of customers who will not have to
wait till being served, so they’ve already done part of the process by ordering, paying and taking
their orders to the table along with avoiding unnecessary occupancy of table enhancing the
smoothness of the process and ensuring higher capacity utilization.

Question 3:

3- Types of customer’s Variability and examples

(Table 1) – Source: Frei, 2006
Arrival Variability: as explained in above table, businesses can witness peak hours in
inconvenient times, like what happened to paramount people were queuing and waiting for long
time in front of the restaurant in peak hours from 9am to 11am especially in weekend.

Request Variability: Given the variety in of products in paramount’s menu , giving the
opportunity to customers to choose between different products, which may require different
process phases .

Capability Variability: Limited seating and long queues caused by high number of customers

Effort Variability: Due to higher volume of customers and waiting time caused by queues some
customers can leave the place

Subjective preference variability: Some people keep waiting even through long waiting times
and don’t consider this as a mistreatment.
(Table 2) – Source: Frei, 2006

3. B How Paramount responds to each type of variability.

 Arrival Variability: paramount’s response for arrival variability was observed

through creating carry-out orders which is supposed to reduce the queues and in
store waiting; this should be classified as
 Request variability: Paramount is serving all products and trying to provide
variety to customers, despite of the complexity of the process and given the
different items on menu , Paramount is allocating staff to specialized task and
applying classic accommodation
  Capability Variability: Classic reduction is applied as customer need to abide by
paramount’s seating policy and proceeds with their orders first and pay for it and
then go to their seats. This requirement of customers to proceed with restaurant
seating policy is considered as a capability needed to be done from customer’s
side.

 Effort Variability: Paramount is trying to help their customer’s during the peak
hours and long queues inside or outside the store by offering fresh orange juice in
summer and hot chocolate in winter to customers, which is considered as classic
reduction.

 Subjective preference variability the unusual seating policy most probably will be
different to customer preference or thoughts about traditional seating policies of just
getting a table and order after, however given the high quality and good services
which engaged customers to paramount’s this created sense of persuasion to
customers about the unique seating policy , reflecting Classic reduction

4. A) the idea of carryout orders

Carryout orders represent a convenient method for consumers providing a variety of options and
save time and effort or consumers. Moreover, Restaurants can use their unutilized capacity
through serving carryout order along with using several online platforms such as (Door dash and
Uber eats) which facilitate the process for both consumers and restaurants (Li & Wang, 2020).
The idea was derived from long queues in paramount, in order to reduce queues and in store
crowd; carryout idea was generated to save time and reduce waiting time. Moreover, the limited
number of seats (44 seats) prevented paramount to utilize capacity and increase because due to
limitation if people existing in store, this limited the sales to the 44 seats capacity, while through
adding the carryout orders service this will extend the sales channels and give the opportunity to
paramount to exceed the store capacity in terms of productivity and profits. Furthermore, the
service will benefit loyal customers and customers who are not able to queue for long time and
want to enjoy paramount’s breakfast in a weekend. The positive impact of this extra service is
definitely customer satisfaction, as per the observed numbers before of reduced queues by adding
the carryout along with retaining customers. And expanding through new target market who just
wants to grab the order and eat anywhere.

4. B) Benefits of carryout orders

(Kimes and Laqué, 2011), discussed the benefit of carryout order on restaurants and highlighted
main factors positively affected such as increased revenue through increase in orders regularity
and repetition of orders along with increase in volume. Secondly, improved capacity
management through planning for carryout orders which was already ordered by phone and give
the opportunity to arrange the process in kitchen between in store and delivery orders. Expanded
target market is enabled through reaching new customers who were not aware about the
restaurant or were avoiding the crowd and long queues; accordingly new opportunity was created
for a new target market of customers which will expand the volume and profitability as well.
Finally, demand analysis is one of the most important factors because restaurant operators will
be able to gather data using this carryout orders better than walk in customers and some
demographic information enhancing the understanding of customer’s background and supporting
restaurant’s strategy to expand.

4. C) Impact of carryout orders on dine-in customers:

Quality is one of the main factors that drive service providers, especially in hospitality industry.
Accordingly restaurants should keep all process variables into consideration in order to provide
high quality products either in carryout orders or dine in. Furthermore, Quality should also be
considered through in store setup, staff quality and preparation process. Said variables can be
represented in level of service provided by staff, quality of materials and preparation techniques
to provide best quality (Iglesias and Guillen, 2004).Reneging and balking customers representing
an indicator of crowd and extending queues which definitely affecting dine-in customers and
leading to customer dissatisfaction. Carryout orders along with dine in customers is complicating
the processing time and leading to higher times , while the restaurant was mainly created for dine
in customers who deserves a better experience. While the carryout orders purpose was to help
those customers and have better capacity utilization.

5) Management decision for carry-out orders

There are several factors impacting the management decision either to increase the carry-out
orders or to decrease it, such as:

Factors to consider in case of increasing carry out orders:

A) Long queues can be reduced specially in peak times during weekends

B) Limited number of seat and the paramount’s policy to utilize the capacity as much as
possible
C) Increasing carry-out orders will improve the restaurant’s sales given that at most times
capacity is utilized and a new sales channel is needed
D) Retaining paramount’s loyal customers and gaining new customers through carry-out
orders
E) As discussed previously that overall utilization was enhanced by adding carryout orders
F) Opportunity to convert the balking and reneging customers into potential customers.

Factors to consider in case of decreasing carry out orders:

A) carryout orders may lead to more queues and leading to increased waiting time,
especially during the peak hours
B) Carryout orders can affect the process flow given the limited capacity of preparation
grills and chefs which can create bottle necks by processing carryout and dine orders at
the same time
 C) Paramount might lose a significant sales channel which will lead to revenue decline in
case of reducing carryout orders , which will be give competitive advantage to other
restaurants who provides both services.

Recommendation:
Throughout previous section numerous factors were discussed to be taken in consideration while
increasing or decreasing carryout orders especially post covide19- era changed the businesses
mindsets as it changed the consumer behaviors, Numerous consumers are using on-demand
platform to find a variety of restaurants along with many dine-in restaurant started to process
takeout orders in order to gain the competitive advantage and opening a new sales channel.
However for the case of paramount restaurant (Li & Wang,2020), it’s recommended for
paramount to increase carryout order in a balanced way was number of carryout orders shall be
increased during high demand. Contrarily, during the dine in peak hours especially on Saturdays,
carryout orders should be decreased in order not to affect the process flow. This balanced model
needs careful study and analysis for demand and consumer behavior in order to improve sales
and maintain the dine in quality which is paramount known for.,
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