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Little Farm Restaurant JIT Implementation

LittleFarm Restaurant JIT Implementation

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Aresearch paper on the impact of the implementation of Just-in-Timestrategy on customer satisfaction: A study of Little Park RestaurantNew York City.

Backgroundof Study

InNew York City, many existing and upcoming restaurants are jostlingfor recognition from clients. The rise in competition has pushedhoteliers to focus on creative ways of improving service delivery.Exemplary service delivery is critical to ensuring that a customer issatisfied it is also paramount to the survival of a restaurant.Unlike other business models, the Just-In-Time (JIT) businessphilosophy advocates for the streamlining and simplification ofexisting processes. JIT does not require significant capital outlaysince it relies on existing business practices (Ríos-Mercado andRíos-Solís 3).

Inmost situations, JIT is associated with manufacturing companies sinceit has calculable parameters that make it easy to implement in amanufacturing setting. Research by Phogat and Gupta shows that peoplespend over 50 percent of their income on offerings from the serviceindustry (Phogat and Gupta, 934). As such, the service industry is ina good position to exploit the change in spending trends. JIT is anideal way for a business to ensure that they improve their servicequality while spending even less money in the process. Further, JIT’sphilosophy of continuous improvement has implications on the overallrestaurant business model and not just service delivery. Forinstance, it eliminates waste and delays

Problemand Significance of study

LittleFarm Restaurant has focused a lot on the creation of a uniqueambiance and distinct menus as its main selling points. However, someelements of service provision remain unchanged. Vasant, Pandian, andKalaivanthan note that as the restaurant ambiance evolves, manyhotels still maintain the same traditional business setup. They statethat the traditional structure of a business model creates waste andmaintains a relatively long production cycle (Vasant, Pandian, andKalaivanthan 371-372). Little Park Restaurant offers a farm to forkexperience to its customers. However, they are facing problems withdelivery delays, and their customer service model is slow regardingorder handling. When customers arrive and find that their orderfulfillment period is long they are likely to leave the restaurantand go to an alternative place to eat. If a client experiences delaysat Little Farm on multiple occasions, they are unlikely to return tothe restaurant.

Assuch, the management at Little Farm is under pressure to reduce thecustomer order fulfillment period, especially during peak periods soas to handle many customers within the shortest time possible. Delayscan have significantly negative impacts on a hotel business, whichrelies heavily on reputation. Research by Aradhye and Kallurkar showsthat delays are a sign of poor service (Aradhye and Kallurkar, 2234).In a hotel business, delays arising from inventory delivery, cause adomino effect that compromises the overall customer serviceprovision. When a client arrives and finds that what they ordered isnot available, they will not think of the supplier as being thesource of the fault. Further, delays in delivery cause delays in mealpreparation. As such, Little Farm is looking for a cost-efficientbusiness model that will reduce the need to hold stock, improvedelivery of services, and improve customer order handling (especiallyin peak periods).

Purposeof study

Toinvestigate the impact of the implementation of Just-in-Time strategyon customer satisfaction at Little Farm Restaurant.

SpecificObjectives

  1. To determine the relation between customer order processing and customer satisfaction

  2. To examine the effect of supply deliveries on customer satisfaction.

  3. To analyze the perception of customers before and after JIT implementation

Scopeof study

Thestudy will be limited to Little Farm Restaurant and will focus on howthe implementation of JIT will alter customer satisfaction. Thisresearch will examine the restaurant’s procedures, documents, andcustomer opinion.

Limitationof Study

Theresearcher was unable to access some of the relevant documents thatpertain to delivery schedules due to the hotel’s wish to keep someof their critical suppliers a secret.

LiteratureReview

TheoreticalReview

DynamicTheory of Service Delivery.

Accordingto research by Kurgat and Ombui, the dynamic theory arises from thework of Jayw Forrester. They add that the dynamic theory of servicemanagement states that one cannot measure the degree of quality usingstraightforward techniques. As such, businesses come up withcustomized techniques for measuring service delivery within theirbusiness setting such as by checking their workflows (Kurgat andOmbui 79). In the case of Little Farm Restaurant, the hoteldetermines the level of customer satisfaction based on the meal andambiance approval of clients. The dynamic theory warns that by usingsuch techniques, companies end up underinvesting in the maincomponents of service delivery. The dynamic approach of servicedelivery cautions that such mechanisms are not sustainable in thelong term and may reduce the level of quality, which in turn reducescustomer approval ratings and eventually customers will stop coming(Kurgat and Ombui 79).

LittleFarm Restaurant’s success is hinged on their ability to get farmfresh food to the plates of their customers, unlike many otherrestaurants that store food for later use. Their focus on the wrongcustomer service deliverables leaves them vulnerable. According tothe dynamic theory of service delivery, Little Farm Restaurant’smodel will add extra costs to their current operational expenses. Thenew costs are called the costs of poor quality. They arise from theloss of customer loyalty and confidence, which in turn causescustomers to stay away from a particular business (Meyers 84-85). InLittle Farm’s situation, clients will grow weary of unavailablefoods that are on the menu and slow service. The dynamic theory ofservice delivery also predicts that by losing customers, a businesswill have to spend less revenue to spend on customer orientedservices. This will result in a continuous cycle of service qualityerosion (Meyers 84-85).

Reviewof literature

Researchby Canel, Rosen, and Anderson shows that applying JIT in a serviceindustry results in the flexibility of operations, allows continuousimprovement, offers complete visibility, and synchronizes allbusiness processes (Canel, Rosen, and Anderson 55-56). Theseattributes of JIT are very relevant for any restaurant to survive inthe highly competitive New York market. For instance, completevisibility allows a hotel to determine which areas are problematicwhile continuous improvement enables the restaurant to make proactivechanges to problems even before they occur. As such, instances ofcustomer dissatisfaction will be reduced without the restauranthaving to incur exorbitant expenses.

Heand Hayya set out to determine whether the Just-in-time philosophyresults in better food quality in a restaurant. Their study appliesregression analysis and reaches the conclusion that theimplementation of JIT has a corresponding positive effect on thecustomer’s perception of the quality of food. He and Hayya alsonote that JIT also has an influence on other aspects of therestaurant business. For instance, during their research, customersatisfaction levels increased due to JIT (He and Hayya 664). Further,the restaurants in the study received higher scores in their productquality, product safety, and compliance with USDA (United StatesDepartment of Agriculture) standards (He and Hayya 665). The researchby He and Hayya can be used to demonstrate the potential benefits ofthe holistic and proactive management that comes from theimplementation of JIT.

Astudy by Gopalakrishnan and Haleem notes that even though JIT makesuse of the existing business model, it requires the businessprocesses to undergo significant re-engineering regarding serviceprovision and customer relations. As such, the cost implications ofchanging business practices may be high. However, Gopalakrishnan andHaleem point out that restaurants will save money and reduce foodwastage in the long run (Gopalakrishnan and Haleem 189). With JIT arestaurant receives its food while fresh, has to spend less onstorage, and no food is thrown out because it was not served toclients. A problem highlighted by the researchers is the high numberof suppliers which they term as an impedance to the implementation ofJIT (Gopalakrishnan and Haleem 188-189). Little Farm Restaurant likethe other restaurants has a very high number of suppliers. Most ofthem are small local farmers who do not have the capacity to ensure aJIT model.

Koatanee,Babu, and Talari compare JIT with the pull and push systems in usewithin many restaurants. Their research focuses on McDonald’s.Koatanee, Babu, and Talari observe that pull and push systems requirerestaurants to hold inventory and have a lower emphasis on qualitycontrol outlets (Koatanee, Babu, and Talari 18). Little Farm’scurrent system is almost similar to what McDonald`s have. At LittleFarm, the Enterprise Resource Planning is calibrated to handle a pullsystem. Implementing a JIT system will result in system conflict.However, since JIT was initially a manufacturing concept, thenanswers can be found from the same place. In his research, Jha notesthat a hybrid system can be useful in reconciling the positive traitsof the two systems (Jha 2386).

Jhastates that in a model factory, the push/pull model can be used inthe manufacturing operations of a business. The manufacturingoperations can then be divided into a pull system to handle customerorders and a push system based on projected demand. On the otherhand, the JIT system can be used to manage operational processes. Bydividing the tasks, the two different methods do not conflict (Jha2386). As such, reaction times are kept low, and inventory levelsreduce. As seen in the study by Gopalakrishnan and Haleem,maintaining nil stocks in the hotel industry is challenging sincesuch entities interact with a high number of suppliers. Similar towhat Jha suggests, Little Farm can divide some of its orders andprocesses into the JIT system and the push/pull system. Customerorders can be classified as pull, predictable orders as push, whilepreorders, deliveries, and overall processes are handled by JIT.

Methodologyand Analysis

ResearchDesign

Thisresearch made use of a case study approach to identify the changes incustomer perception over time. A case study approach generates aconclusive and multi-dimensional understanding of an individualproblem facing an organization. (Crowe et al. 1). The research madeof questionnaires to accommodate the perceptions of the clients overthe two periods (pre and post-JIT). Additionally, the study made useof existing records to make comparisons over time.

Pilotstudy

Apilot study will be used to determine the suitability of thequestionnaires in addressing the quality issues at Little FarmRestaurant. It will also point out any ambiguities as well as add onany omitted information.

TargetPopulation

Thetest targeted Little Farm Restaurant’s clients and themanagement.Based on the pre-tests, this study assumes a confidencelevel of 90% hence precision of 0.1. The formula to be used inselecting the sample is:

n=N/ (1 + N (e) 2).

n=N/(1.6)

N=88 hence

n=88/1.6

n=55

n-Number of total target population

e-Precision level

Theresultant sample group is: 55

Table1.1 Target Population

Datacollection techniques

Thisstudy will use primary data collected from the administration ofunstructured and structured survey questions.

ResearchFindings and Discussion

Themanagement of Little Fork Restaurant implemented JIT in a number ofareas within their business:

  1. They held negotiations with their suppliers to consolidate and integrate their delivery schedules to avoid repeat deliveries that would have been costly on the suppliers.

  2. Offered once a day round trip pickups for small scale suppliers who lack delivery infrastructure

  3. Partnered with local markets to have produce delivered immediately it arrived at the market

  4. Implemented quality management in the kitchen to assess the causes of delay in processing orders.

  5. Allowed customers to preorder meals so that they can find their meal ready for consumption on arrival.

  6. Meals were halfway prepared on the basis of projected demand and customization of meals was done based on specific customer orders.

Table1.2 Customer and Management Responses

AfterLittle Farm Restaurant had implemented JIT on a partial basis, theyrealized an improvement in almost all the variables under study. Thepercentage of clients who replied that they had experienced delaysreduced from 65 to 44 percent. Furthermore, the amount of time thatit took Little Farm to process customer orders also decreased from anaverage of 10 minutes to an average of 4 minutes. The sameimprovement can be seen in the client`s rating. When customersnoticed that their orders were being processed within a short period,they viewed the restaurant in a favorable manner. As such, theyimproved their customer service rating from an average of sixtypercent to 75 percent. However, one should note that this does notencompass the entire dining experience at Little Farm Restaurant.Rather, it pertains to the customer satisfaction based on improvedorder processing.

Themanagement also experienced a positive outcome from theimplementation of JIT. For instance, the lead time reduced by 10minutes post-JIT implementation from 40 minutes to 30minutes. Thelead time is still not exactly in line with the philosophy of JIT.But, one should understand that restaurants have to handle numeroussuppliers, some of the minor products while others deliver essentialmeal ingredients. Further, consolidation meant that different farmershad to coordinate their various schedules. Having farmers delivertheir produces in different intervals in a day would have translatedinto a higher logistics cost. As such, achieving an almost zero leadtime is going to be difficult for Little Farm Restaurant. The delaysexperienced by Little Farm Restaurant also reduced because farmerswho did not have the capacity to deliver their produces directly tothe hotel were able to make use of the round trips or consolidation.

Graph1.1 Graphical Comparison of Lead Time and Waiting Period againstCustomer ratings

Conclusionsand Recommendations

Thisresearch paper began with the aim of assessing the impact of JITimplementation on the satisfaction levels of customers at Little FarmRestaurant. Data collected from the case study shows that after theimplementation of Just-in-Time, customer satisfaction levels rose.The research had a 100% response rate due to the willingness of therespondents to participate and the brief nature of the questionnaire.Since JIT is a holistic approach to quality improvement, then thisstudy can safely say that JIT. However, this research is notconclusive since other variables within the restaurant could havecontributed to the improvements. Thus, more research is needed tolook into the different JIT quality parameters to determine the exactrelation between JIT and customer satisfaction.

WorkCited

Aradhye,A.S. and S.P. Kallurkar. &quotA Case Study Of Just-In-Time System InService Industry&quot. ProcediaEngineering97 (2014): 2234. Web. 19 Nov. 2016.

Canel,Cem, Drew Rosen, and Elizabeth A. Anderson. &quotJust‐In‐TimeIs Not Just For Manufacturing: A Service Perspective&quot.IndustrialManagement &amp Data Systems100.2 (2000): 51-60. Web.

Crowe,Sarah et al. &quotThe Case Study Approach&quot. BMCMed Res Methodol11.1 (2011): 1. Web. 19 Nov. 2016.

Gopalakrishnan,P. HandbookOf Materials Management.2nd ed. New Delhi: Prentice Hall of India, 2015. Print.

He,Xin and Jack C. Hayya. &quotThe Impact Of Just-In-Time Production OnFood Quality&quot. TotalQuality Management13.5 (2002): 651-670. Web. 17 Nov. 2016.

JavadianKootanaee, Akbar, K. Nagendra Babu, and Hamid Foladi Talari.&quotJust-In-Time Manufacturing System: From Introduction ToImplement&quot. InternationalJournal of Economics, Business and Finance1.2 (2013): 18. Web. 19 Nov. 2016.

Leornard,Kurgat, and Kepha, Ombui. “FactorsAffecting Service Delivery in the Judicial System in Kenya: A Case ofMakadara Law courts”. International Journal of Science and Research(IJSR) 2319-7064 (2013): 79. Web.19 Nov. 2016.

Meyers,Robert A.&nbspComplexSystems in Finance and Econometrics.New York: Springer, 2010. Internet resource.

Ríos-Mercado,Roger Z, and Yasmín A. Ríos-Solís.&nbspJust-in-timeSystems.New York, NY: Springer, 2012. Print.

Sandeep,Phogat, and A. K. Gupta. “A Review on JIT Implementation Aspects inService Sector”. YMCAUniversity of Science &amp Technology (2012):934. Web. 19 Nov. 2016.

Vaibav,Jha. MRP-JIT Integrated Production System.InternationalJournal of Engineering Research and Applications,(2011). Internet resource.

Vasant,Pandian, and Kalaivanthan M.&nbspHandbookof Research on Holistic Optimization Techniques in the Hospitality,Tourism and Travel Industry., 2016 (371-372). Print.

APPENDIX1: QUESTIONNAIRE

QUESTIONNAIRE

Dearsir/madam kindly fill in your answers to this survey’s questions.This research seeks to determine your perception of the customerservice standards at Little Farm Restaurant over the course of theresearch period. Your feedback will be valuable in making yourexperience even better. No personal information will be collected andthe collected information will be kept confidential and generalizedfor the purpose of this research.

Pleaseanswer by placing a tick over the appropriate box or by writing yourown response in the provided space.

SECTIONONE: DINING EXPERIENCE

Haveyou experienced delays?

  • Yes

  • No

Whatwas your approximate waiting period?

  • 5 minutes

  • 15 minutes

  • 10 minutes

  • 20 minutes

How would you rate the customer service level in percent?

Did you receive the meal you were looking for?

  • Yes

  • No

In your own opinion, how can customer service at Little Farm Restaurant be improved?

__

SECTION TWO: LEAD TIMES (FOR MANAGEMENT ONLY)

What is the average lead time for raw materials (approximate)?

  • 20 minutes

  • 30 minutes

  • 40 minutes

  • 50 minutes

  • Over 1 hour

How do you rate the lead time (1-5 with 5 as best and one as worst)?

What is the average frequency of occurrence of delays (per day)?

__

In your own opinion, how can lead times at Little Farm Restaurant be improved?

__

Thank You for your feedback.

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