Operational Management In Fast Food Service Industry: A Strategic Analysis

Concept of Operations Management

Discuss about the Scope of Operations Management.

The competence level of every organization to generate profit and develop sustainability in this competitive globalized market revolves around its level of skill and ability to execute its operational performance in effective manner (Seuring, 2013). Though the term Operations Management has undergone a significant industrial revolution in recent times, it is identified as an effective approach for executing various resources within an organization (Lovelock & Patterson, 2015). Operations Management is further identified as a systematic approach which aims to address critical areas of issues vital to the developmental process which tends to alter some inputs into output which are constructive and can further attain greater amount of revenues for the organization. As the principle situation for a business enterprise is to attain a combination of supply and demand, obtaining excess rate of supply or surplus capacity results to be wasteful or costly. While operations function has been considered to be accountable for producing products or delivering services, such a systematic approach necessitates the support and input from other areas of the organization (Dahlgaard et al., 2013). It has been observed that operations has been responsible for dependable on the production of goods and products and further providing the services offered by the organization.

Hence, the efficient approach of operations management has been identified as a management system of processes which create goods or product services. It is further to note that operations and supply chains have been intrinsically associated and no significant business enterprises have their existence without the both (Christopher, 2016). A supply chain is identified as a sequence of organizations comprising of facilities, functions and business operations which are associated with the production and service delivery (Mellor, Hao & Zhang, 2014). The report evaluates on the operational management function of fast food service industry and further illustrating their association to process of decision-making and value chain. In addition to this, the paper will explicitly evaluate the theoretical aspects and methodologies integrated in the decision-making in operations process planning and further intend to assess the role of operation management in the strategic management of organizations pertaining in fast food sector of Australia as well as the supply chain procedures of the organizations.

It is important to observe that the extent of operations of management constitutes an array of people who are engaged in the process of product and service design along with excellence improvement of the organizations’ product and service range (Seuring, 2013). Operation management primarily incorporates several interrelated activities such as forecasting, capacity evaluation, managing inventories and further strategizing areas to locate facilities and services (Osborne, Radnor & Nasi, 2013). The operations functions primarily comprises of all actions which are directly associated in goods and service delivery thus has its significance in both manufacturing operations such as goods-oriented and in areas dealing with food handling and retailing as service-oriented (Christopher, 2016). As fast food delivery sectors continue to sustain, several business enterprises have been compelled to establish advanced and unique technologies and mechanisms in order to integrate operational facilities and marketing efforts within the business activities (Hungry Jacks, 2018). Consumers in this globalized era have been showing higher degree of inclination and preferences towards convenience of food being delivered in accordance to their expediency and ease (Carroll & Buchholtz, 2014).

Fast Food Service Industry in Australia

Thus it has been critical for fast food service sectors of Australia as well as other nations to ensure that these business enterprises attain or surpass the vital demands associated with their significant marketing initiatives (Osborne, Radnor & Nasi, 2013). However, such approaches are only effective if marketing and operations system have successfully incorporated which further tends to condense the delivery estimated time and expectancy of the companies (Lee, Kao & Yang, 2014). Furthermore, the adoption of this approach has been identified to be constructively been integrated with the level of development of general performance with a greater degree of operational efficiency along with improved financial outcomes (Bon & Mustafa, 2013). It has been observed that such constructive and effective association tends to elevate the growth of manufacturing sector when managers utilize a reward system that is based on the operation management outcomes (Hill, 2017).

 It has been noted that several fast food delivery enterprises in Australia have developed the knowledge and awareness of executing complex strategic approaches of evaluating the importance of integrating procedures of receiving telephone orders and efficiently delivering orders on the estimated time (Osborne, Radnor & Nasi, 2013). The first challenge identified by leading fast food chains has been related to the logistic services whereby the food ordered must be delivered to its consumers within the estimated timeframe (Christopher, 2016) . As their marketing communications signify, the delivery window utilized by global fast food chains generally determine from 30 to 45 minutes. It is important to note that the more critical the estimated delivery time is generated; companies tend to encounter greater degree of challenge. Thus, the primary purpose of a fast food delivery service relies on the provision of a broad range of consumer services without the significance of offline services (Lovelock & Patterson, 2015). This not only raises an area of consumer convenience and ease, but further poses areas of operational challenge for the organizations (Hill, 2017). As operational functions primarily incorporates certain consistent activities associated to forecasting, competence planning, assuring quality services, such systematic approach of airline industry reveal a propensity to comprise airplanes, airport facilities along with maintenance services that tend to expand over a vast range of territory (Christopher, 2016).

Companies manufacturing sectors such as PowerSki, initiate to perform similar essential functions in order to transform resources into finished or refined goods.Furthermore, to execute such functions in globalized, manufacturers must significantly endeavour to develop the level of operational efficiency (Belekoukias, Garza-Reyes & Kumar, 2014). The manufacturing industry thus requires refurbishing their production procedures to emphasize on the quality and to sustain material and labour expenditures and eliminate all costs which have been incompetent to increase the value of the finished products. The systematic approach of operations management can be grouped as follows:

• Production planning- During this planning procedure, the role of operations management is to ascertain the methods applied for the production of goods, location of production and the approaches through which such manufacturing facilities will effectively be executed.
• Production control- It is important to note that once the production process is executed, operation management persistently aim to schedule as well as regulate the activities that formulate such processes. Furthermore, they must solicit and show responsiveness to the evaluation process and amend the required changes and alterations. At this stage, the role of operation management is dependent on raw material purchase along with the handling of inventories (Juan Ding et al., 2014).
• Quality control- At the final stage, such systematic approach shows direct integration in the efforts to guarantee that goods are produced in accordance to specification and quality standards are maintained.

Decision Making in Process Planning

It has been posited by Golicic & Smith, (2013) that value chain integration decisions must be executed in terms of the value chain decision hierarchy which primarily deals with Strategic, Tactical and Operational levels. Furthermore, assimilation at the tactical level is implemented through the means of various forms of associations like ownerships, mutual endeavours, long term purchase which can further be attained by integration, invasions, mergers and other forms of acquisition. Tactical and operation involvements important for value chain integration resulting to the development and value of the value chain process (Lovelock & Patterson, 2015). Furthermore, erroneous decision making processes based on the form of relationships between associates could develop critical interruptions and will rapidly erode the vitality of stakeholder base (Kim, Li & Brymer, 2016).

Hungry Jack’s being one of the prominent fast food delivery companies in Australia and across the world attains a domestic market leadership in Australia and further comprises of multi-location diversified product profile (Garcia Martinez et al., 2014). The company being one of the prominent players of the fast food service industry comprises a revenue rate of over 3 billion ASD, and being one of the renowned business enterprises in Australia. The company has been immensely incorporated and further owns and drives sources of the major section of its critical inputs as well as utilities. However, it has its reliance on external associates for provision of products and key mechanisms of production costs. It is important to note that value has developed an understanding whereby it is evaluated by the total returns and income as a reflection of the price an enterprise’s product as well as the number of units it can advertise or use for trading purposes (Juan Ding et al., 2014). Furthermore, it has been noted that a business enterprise tend to attain higher rate of revenues and productivity if the value that has been executed exceeds the amount of expenditure involved in generating the product (Thornton, Lamb & Ball, 2016).

As value chain has been regarded as an activity which elevates the market form and whereby in globalized industry, there has been a significant need for fast food delivery service sectors in order to maximise the importance of every process operated within the business. As value chain management system (VCM) aims to concentrate at significant steps ranging from raw material or suppliers’ use to customers and lastly the end users, the primary goal is dependent on the maximum delivery of value to the end users at the minimum total cost (Velasquez & Hester, 2013). However, this results the supply chain management to develop into a subset of the value chain study whereby the process of value chain notion constitutes varied centre of attention and a broader domain (Thornton, Lamb & Ball, 2016). In the globalized era with high degree of competitive milieu, strategy is no longer identified as a factor of positioning an established set of actions along with the conventional industrial model that is the value chain (Kim, Li & Brymer, 2016). However, it has been observed that prominent business enterprises specifically in the fast food delivery sector tend to reinstate the system of value chain rather than only adding value to it.

Role of Operational Management in Strategic Management

Essential strategic role of value chian process is noted to reconfigure significant roles and associations among a vital network of buyers-suppliers or distributors to organize the formation of importance by emerging network of players in the market (Garcia Martinez et al., 2014). Thus, a company’s strategic task develops into the persistent reconfiguration as well as integration of its competencies and clientele base (Battistoni et al., 2013). The rate of success of fast food service sector has been immensely dependent on the strength of its weakest supply chain partner. However, only through integrated collaborative linkages through the entire supply chain companies can significantly attain the benefits of cost reduction as well as revenues enhancing behaviours (Juan Ding et al., 2014). Implementation of effective supply chain management in the fast food delivery sector has demonstrated potential valuable approaches of sustaining competitive advantage. Furthermore it serves in developing organizational performance as competition in such a globalized era no longer exists among organizations but has been persistent among a range of supply chains (Epstein, 2018).

The consumer-seller relationship in particular in the fast food service sector in Australia has shifted its focus beyond individual business enterprises in the value chain which delivers value to the segment of end consumers (Jie, Parton & Cox, 2013). A broad range of managers have been initiating endeavours to develop vital collaborative alliances with other business enterprises specifically competitors. However, such strategies generate utmost complexities in the process of implementation as they reveal high degree of inability to succeed. Dabbene, Gay & Tortia, (2014) claim that Hunger Jack’s being one of the prominent market leader in fast food online delivery, has been encountering new competes with both local as well as diverse global enterprises such as Red Rooster and Pizza Hut. These factors have been primarily dependent on product, service speed and quality along with technical expertise and price (Hungry Jacks, 2018). Thus, in order to sustain its competitiveness, Hungry Jack’s  must invest in developing effective digital competence and data analytics to distinguish itself from its toughest competitors in order to attain the increasing rate of desires and expectations of the customer base (Bosona & Gebresenbet, 2013). 

Hungry Jack’s technology preferences in recent times have improved the value which customers derive from the service delivery of the company. There can be witnessed several operating model types which have facilitated the business of Hungry Jack’s to deliver its customer promise of convenience, timely estimated delivery along with high rate of transparency and economical price range (Velasquez & Hester, 2013).

• In-House E-Commerce Ordering Platform- The rate of expediency of the digital or highly advanced ordering procedures has been critical to the customer base of Hungry Jack’s and further is considered to be essential for the long-term success of the company. In 2015, an estimated value of 50% of Hungry Jack’s US sales has been generated from digital orders which have been higher in comparison to its other competitors in the global market (Hungry Jacks, 2018). Furthermore to ensure the rate of sustainability and continual growth of digital orders, certain fast food service delivery companies along with Hungry Jack’s made strategic decision in order to aid in the internal e-commerce ordering domain (Chai, Liu & Ngai, 2013). This distinctive platform enables the modern customer base with an online profile to place orders within minimum timeframe and further enhance its order time as well as overall time. This e-commerce initiative of this industry has proficiently enabled order ETA (estimated time arrival) tracking system and the delivery updates which provide greater degree of transparency (Juan Ding et al., 2014).
• Mobile Applications- In recent times, to sustain a competitive advantageous position in the globalized market, Hungry Jack’s have launched mobile applications for gadgets like smartphones and tablets in order to capture the elevating rate of tech savvy users for seamlessly placing orders on their smartphones (Garcia Martinez et al., 2014). Furthermore, 2014 has witnessed the company to launch other significant platforms to capitalize on the increasing personalization services which further aids the consumers to undergo every vital digital experience (Chai, Liu & Ngai, 2013). Furthermore, by involving system of personalization, Hungry Jack’s, Pizza Hut and Domino’s Pizza has been immensely successful to cater a major proportion of millennials or ‘Gen Z’, further enhancing the product services by establishing higher level of network influence (Velasquez & Hester, 2013).
• Integrated Point-of-Sale Technology System and Vertically Integrated Supply Chain- Finally, fast food enterprises like Domino’s Pizza and Hungry Jack’s have invested considerably in optimizing the level of operational efficiencies in order to decrease the costs or expenditure rate and further enable these organization’s to offer an affordable and economical products to its end purchasers (Thornton, Lamb & Ball, 2016). These companies have further introduced an integrated POS system in order to enhance the coordination system persisting between its franchisees and the corporate unit and further to reduce the error rates which occurs during the execution of business operations (Soroudi & Amraee, 2013). In addition to this, it has been observed that Hungry Jack’s has been vertically integrated dough manufacturing and supply chain systems which aims to improve the quality as well as consistency level of the products and facilitates these organizations to leverage economies of scale in order to focus significantly on store operations and customer services (Garcia Martinez et al., 2014).  

Value Chain Integration Decisions

Industrial sector has been implementing certain research (OR) techniques to purchase, substitute as well as reorganize the most significant advantageous policies. However, these techniques have involved certain location and manufacturing size of retail outlets, factories and warehouses and to merge the products and selection of most effective employee base for the companies and the assigned roles (Garcia Martinez et al., 2014). The process of OR has effectively been implemented in several areas of observation and thus has been identified as a proficient mechanism (Soroudi & Amraee, 2013). This further helps to elevate the efficiency level of the management decision making procedures. Comprehensive method of operation research has been utilized in order to develop the awareness and further pose explanations of the phenomena of operation management (Soroudi & Amraee, 2013). Thus such a systematic and comprehensive approach has been useful in certain significant domains.

• In Economy- It has been noted to be significant for every government to execute a systematic planning and strategy for the economic progress of the nation where the company has been operating (Garcia Martinez et al., 2014). Thus, the country must initiate utmost competence level and be prepared to encounter the economic emergency by implementing the operational investigation research which can establish the profit plan. It is further to apply in order to raise the rate of per capita income by using the limited recourses (Juan Ding et al., 2014).
• In corporate house and business- It is important to recognize that certain experiences of the industry implement decision making procedures by developing knowledge from previous experiences of the industry (Juan Ding et al., 2014). Thus application of vital operational techniques to businesses generates appropriate decisions about the proper utilization of limited resources of capital, revenues and other resources of the production.
• In promotion and selling of the product- Operation research techniques aid the marketing executives to execute decision making where organizations will establish their product range, the approaches they would introduce to transport the product at economical rate (Garcia Martinez et al., 2014). Vital OR techniques further helps in the decision making procedures related to the price of the commodity, requirement of stock as per the future demand of the product (Thornton, Lamb & Ball, 2016). Furthermore, the appropriate OR methods can facilitate the organizations to ascertain that there can be an appropriate choice of advertise media as per cost limitation.

In the decision making and planning procedures are implemented to prepare certain alternative solutions of logistics support whereby vital options can be used in order to assess and evaluate certain business outputs. Furthermore, Supply Distribution Module aims to provide tow vital outputs whereby one of them is identified as an indicator of inventory when other inventory elements do not constitute on the Zero level (Garcia Martinez et al., 2014). Supply Distribution Model further can be utilized as a vital support mechanism for planning as well as decision making process in the phase of preparation operations as well as during executing operations. Certain optimization effort gas been identified as a logical outcome of efforts which have been more efficient while spending resources especially in financial areas and working time (Juan Ding et al., 2014).

Conclusion

It can therefore be concluded that with the rise of competitive industrial sector has led to the importance of operation management for fast food business enterprises operating in the fast food industry in Australia. Thus, operation management executions have been immensely relevant for the performance growth of these organizations. This has not only facilitated a distinctive contribution for the diffusion in business clusters by further introducing advanced forms of policies and legislatures. The report explicitly evaluated the critical factors associated to the role of operational management in varying industrial sector by assessing its relationship to the process of decision-making and supply value chain. The paper in addition to this have explored the way effective supply chain management has been facilitating the performance and business operations of some of the prominent organizations in Australia namely Hungry Jack’s, Domino’s Pizza and other fast food delivery organizations.

Supply Chain Procedures in Fast Food Service Industry

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