Layout Optimization For KFC In Singapore

Layout and Analysis

Identify one typical fast-food franchise that operates in Singapore. Describe and explain the type of layout that the fast-food used. How does it support the company performance objectives? Do different franchises (e.g., McDonald, Burger King or Wendy’s have different types of layout? Why? Draw a flowchart (process map) for each of the process and explain ways in which the franchise might be improved?

Although the global fast food market is highly saturated, KFC can be considered as one of the most popular brand in the world (Kfc.com.sg, 2015). KFC was founded by Colonel Harland Saunders in 1930s and by 1960 it opened more than 600 outlets across US (Kfc.com.sg, 2015). However, the first store of KFC in Singapore was opened in 1977.By 1996 the number of stores increased to 60 and currently about 85 franchised stores operate under the flagship of KFC in Singapore. The innovative offers innovative items to the customers.  The organization aims offering healthy foods to customers while maintaining a friendly environment in its restaurants. Large variety of products and unique recipes enhances the popularity of KFC products. Although KFC is one of the major fast food chains in global market, it is known to the customers for its items in chicken segment.  Core values of KFC include offering the best product to customer. Offering items prepared from chicken enhances the acceptability of KFC to people of all communities. However, management of the organization also focuses on using fresh ingredients, herbs and different spices for making the products more attractive to customers. Although the organization purchases raw materials from local suppliers, these materials are used only after meeting the quality standards set by KFC management. However, the management also uses computerized cooking processes for maintaining quality of dishes. (Refer to Appendix 1 and 2)

Franchises of KFC are present all over the world. However, management of the organization     focuses on implementation of process layouts. According to Choi & Sheel (2012) implementation of facility management layout strategies not only increases availability of stores but it also increases the chances of getting skilled work force.

Smooth flow of process is important for reducing service delivery time (Baudel & Broeksema, 2012). Dwivedi & Chheda (2012) opined that use of process layout is beneficial for increasing flexibility of handing various processes. However, implementation of facility layout strategy enables KFC management to execute their operational activities in uninterrupted manner.

Although the management focuses on increasing production, it is also important to keep the environment of floor clean. As stated by DiPietro et al. (2013) the tasks of cleaning floor can be difficult if complexity in operating processes increases. Use of facility management techniques enables that the tasks of processing of raw material and delivering finished products are conducted at two separate ends of store. Thus the flow of process becomes easy and predictable. It also makes the tasks related to store cleaning easier.

Hazard reduction and improvement in product quality: According to Elmedulan & Apat (2014) layout of an organization are often influenced by the nature of products served. Kenkmann & Hooper (2012) also suggested that availability of product and nature of services offered by an organization are determined by infrastructure of a store. As KFC handling of raw material, fished product and containers is important for improving quality of products. Restaurant management requires ensuring safety for staffs.  Use of facility layout not only makes the restaurants attractive but also provides the employees with occupational safety (Zhang et al., 2013).

Descriptions

Lower operating cost and easy expansion of stores: Moon & Song (2012) stated that use of facility layout reduces the cost of running a store.  As most of the stores of KFC uses facility layout model, management requires investing less to run these stores. Kim & Shin (2014) stated that environment is one of the most important factors for retaining visitors in a restaurant.  Use of facility infrastructure enables the management to keep these restaurants clean. It indicates that the layouts of stores play an important role in increasing profitability of KFC.

Efficient utilization of employees: Environment of a restaurant impacts on the efficiency of employees (Kim et al., 2013).  Quality of services provided in a restaurant influences loyalty of customers (Kim & Shin, 2014). However, using process layout strategies ensure that management of KFC can utilize efficient employees and thus the management can offer customers with products and services of high quality.

McDonald’s one of the competitors of KFC in Singapore, also follows facility layout strategies   for outlets. The organization develops process oriented layout designs to make the process of handling products more flexible. McDonalds is redesigning their outlets and the new outlets will content three different types of dining space. The organization also focuses on designing of outlets in environment friendly manner. However, Burger King another major fast food chain in Singapore uses self ordering Kiosks to make the delivery and payment collection process more efficient. On other hand Wendy’s, management focuses on increasing the availability of stores.

Strengths · Hazard  reduction · Reduces  complexity  for moving people and  materials · Maximizes  staff utilization · Optimizes space utilization and  flexibility · Processes can be  supervised easily · Makes the process of communication easy	Weakness · Flow time of products is higher · Process planning  is  complex
Opportunities Processes can be modified easily. Thus KFC management can easily add new services or also can implement innovation.	Threats · Requirement of skilled worker is high · Increased complexity in planning

Table 1: SWOT of Process layout in KFC

Reduction in workplace hazard and   better utilization of employees: Use of   process layout    reduces work place hazards (Baudel & Broeksema, 2012). As the comforts of staffs are emphasized in KFC layout strategies, quality of services provided by staffs also improves. Bottlenecks in processes reduce as the process handling becomes flexible.

Ease of moving people and materials: KFC restaurant layouts include functional grouping of various processes. Use of process layout provides staffs with the opportunity of using multiple routes for moving materials. Thus the handling of raw material   becomes easier in KFC restaurants.

Optimized space utilization: Use of facility layout strategies enables the management of KFC to utilize the   available spaces of a restaurant efficiently. Requirement for equipments reduces due to use of process layout. The stores which use process layout also include several departments for doing tasks. It optimizes utilization of available space.

Use of   process layout can increase the complexity of production (Zhang et al.,2013). Complex production system can be considered as one of the weaknesses of KFC. Baudel & Broeksema, (2012) suggested that employee turnover in hospitality sector can be increased   due to work pressure. Although use of facility layout enables KFC management to provide employees with safe and comfortable environment, the kitchens and store rooms can be improved. As process layout infrastructure is used in stores employees require to move too much and it makes their job tiresome. Use of process layout can affect the employee retention policies of KFC.

Reasons for Choosing KFC Layouts

As the number of health conscious customers is increasing, the demand for healthy products is also increasing (Zhang et al., 2013). Management of the organization can increase number of stores in residential areas to implement above-mentioned business strategies efficiently. However, management of the organization can bring innovation into their existing menus according to the food habits of local people. As    use of facility layout  enable  management to expand stores easily, KFC  stores may  contain  different  dining spaces for  different  group  of customers in future.

In case of large stores efficiency of material handling may reduce due to long movements. If the variety of processes increases in KFC, complexity in process planning will also increase. Unavailability of skilled worker can reduce the effectiveness of store layout.

	KFC (Functional layout)	McDonald’s (Product layout)	Burger King (Position Layout)	Remarks
Manpower	Skilled workforce is used as automated processes are less used.	Highly skilled  workforce  is not required	Staffs  can  do various tasks	KFC’s  approach is more effective
Cleanliness	Floor  can be kept clean easily  as different  processes are grouped together	Automatic system is used for material handling. Thus  floor  remains clean	Cleaning  floor can be difficult as  equipments are not moved	Both  KFC’s and Mc Donald’s approaches are effective
Accuracy of cashier	Accuracy of cashier  is high	Accuracy of  cashier is high  as operations are automated	Accuracy of cashier is high as the  flow of process is simple	Accuracy of cashier  is high in all  cases
Seating arrangement	Seating arrangements  of customers  are  different according  to their  requirement	Maximum  number of seats can be arranged	Seating arrangements are  fixed and less flexible	KFC’s approach is more effective

Table 1: Comparison matrix of fast food chains in Singapore

Analysis on the comparison matrix indicates that KFC and its   competitors McDonald’s and Burger King use different lay out for designing their stores. As stared by Baudel & Broeksema, (2012) use of process layout enables an organization to utilize its work force efficiently. As KFC management uses process layout, it can create groups of staffs according to their roles. Thus the performance of whole team improves. In case of McDonald’s layout management focuses on using automation for conducting various activities. As a result the requirement of recruiting skilled employees reduces. However Kim & Shin (2014) opined that lack of skilled employees can affect the customer satisfaction level of customers. In case   of Burger King’s layout a single staff can be used   for doing several tasks. However in such layouts, expertise of an employee is not utilized properly. 

Both the restaurants of KFC and Mc Donald’s can be kept clean. In case of McDonald’s use of automated process keeps the floor lean. In KFC tasks of different category are conducted at different places and it reduces the complexity of floor cleaning. Floor cleaning is difficult for position layout as equipments are not moved (Zhang et al., 2013). In all the discussed layouts products are delivered using predefined path and thus accuracy of cashier is high in all cases.  Use of process layout enables KFC management to arranging seats according to the category of customers. Flexible seating arrangement not only increases customer satisfaction level but also improves efficiency of teams.  In case of other restaurants, seating arrangement is less flexible. Kenkmann & Hooper (2012) opined that use of process layout may not be suitable for large processes as path of product flow becomes complex. Although use of process layout is currently effective for conducting   daily activities, its effectiveness may   reduce in future due to changes in product development techniques.

Product · Different parts of products are cooked at different places. Parts are assembled after getting an order. · Handling of product becomes easier	Price Operating cost of   running floor is reduced
Place Processes are conducted at different places  according to their category	Promotion · Promotion can be done through interior design

Table 2: 4Ps of facility layout in KFC

Product:  Use of process layout enables staffs to manage raw material and finished product more efficiently and thus it improves quality of products. Use of process layout also enables the organization to categorize the tasks of product development according to their category. It also allows the management to utilize the skills of their staffs. However use of process layout increases the service delivery time of KFC.  Restaurants such as McDonald’s which use product lay out can deliver items within less time. High time for food preparation reduces the effectiveness of KFC store layouts.

Effectiveness of Layout

Price: As the operating costs of stores are low due to use of process layout, KFC can earn huge profit. However, the pricing of items is affected by complex item preparation process. As the production systems of KFC’s competitors are simpler, they sell products at comparative low prices. Use of process layout sometimes restricts KFC to implement competitive pricing stratehies.KFC management often offers some add-on services to make the products attractive. Extension of stores is easier and cost effective due to use of process layout.

Place: Use of process layout enables the management of KFC to conduct the different processes at different places of store. It is also beneficial for arranging sets of customers according to their types. Thus KFC can provide customers with relaxing environment.

 Promotion:  KFC management can implement interior decoration strategies easily due to use of process layout. Locations of KFC stores are highly convenient. Thus the management does not need to conduct any special promotional activities for informing visitors about the location of stores. Innovative designs of restaurants also attract customers.

Figure 1: Facility layout in KFC

Facility layout in KFC:   In KFC the management used process layout for designing restaurants. In these restaurants, the   raw materials are collected at one end. However different parts of a product are cooked by chefs. After a customer places an order, the cooked portions are assembled together and served to customers.

Impact of facility layout on company objectives: Facility layouts of KFC floors are effective for meeting organizational objectives. Operating costs of these floors are less. So using facility layout is beneficial for KFC management to increase their revenues. Use of facility layout is also beneficial for providing customers with flexible seating arrangements. Thus use of process layout is enabling the organization to satisfy its customers.

Although the layouts of KFC franchises in Singapore are effective to attract visitors, competition in the market is increasing. It indicates that management of the organization requires modifying their business strategies   for attiring sustainable growth rate. Some recommendations are made in this assignment for KFC franchises in Singapore.

The management of KFC should   redesign the existing outlets to bring variation in dining spaces. As children and families is one of the most profitable customers groups in KFC, management should focus on creating separate places for children and families. As most of the customers of KFC are young adults and teenagers, the management focuses on providing them with relaxing environment. KFC outlets should contain more flexible chairs so that people of all age become interested to visit here.

In Singapore, most of the KFC stores offer full menu to the customers. Segmenting the customers according to their requirements enhances the loyalty to organization. However, in the case of KFC, designing menu as per the requirements of customer makes the stores profitable. Although the products included in the menu of KFC are tasty enough to attract customers, most of these products are not good for the health of customers. As the customers are becoming more health conscious, unhealthy foods are also affecting business growth of KFC. However KFC management can arrange for separate counters for different product and customer groups

Comparison with Competing Fast-Food Franchises

The management of KFC should emphasize on   adding self-service kiosks in outlets.  Inclusion of Self serving Kiosks will make the service delivery process more efficient.

5. Conclusion:

Analysis of the lay outs of KFC franchises in Singapore indicates that management develops the strategies for its store layouts with focus on ensuring comfort to customers.  Although KFC is one of the most well known fast food brands in global market, growth of this organization is being affected by increased competition. However, the management can focus on modifying the store layouts to attract large number of visitors in KFC restaurants. According to the findings of KFC layout strategy analysis, outlets of this organization can provide customers with self-service opportunities. The stores may contain separate spaces for separate customer groups. Apart from this; the management can increase the number of stores in Singapore to retain customers.

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