Competition in the Restaurant Industry

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Table of Contents

1.0 Introduction1

2.0 Literature Review1

3.0 Back Ground of La Tante Royal3

3.1 Nature of Competition3

3.2 Basis of source decision4

3.3 The role of suppliers4

3.4 Eliminating waste and reducing cost4

3.5 Just in time5

3.6 Supplier development5

3.7 Data interchange and interaction5

4.0 Conclusion and recommendation6

References7

1.0 Introduction

Competition in the restaurant industry is very competitive. Restaurants compete torwards offering customers real value for money. Every customer wants the best quality of food he or she offers money for and at the lowest price possible. With all food joints with this tough competition in mind, it is very important for them to understand what their customers want. La Tante Royale understands the fact that its customers want value for money but would not compromise on quality. Although lean thinking was developed by the motor industry it is equally applicable to sectors such as utilities, services and retail. The 'lean' concept is applicable to all types of purchasing organisation irrespective of size. La Tante Royal uses lean management approach to reduce cost, waste and maximize its asset in order to gain competitive advantage through delivering value at reasonable price.

2.0 Literature Review

With a true just in time Lean operation, materials flow ‘like water’ from the supplier through the production process and onto the customer with little, if any, stock of raw materials in warehouses, with no buffer stocks of materials and part-finished goods between stages of the manufacturing process, and no output stock of finished goods.

This just in time approach requires that materials arrive from dedicated suppliers to production at the right stage of the process just when required, and when the production process is completed that the finished product is shipped directly to the next stage in the supply chain.

With no spare or safety stock in the system, there is no room for error. Scheduling of activities and resource has to be exact, communication with suppliers must be precise, and suppliers need to be reliable. Materials have to arrive on time, in the correct quantity and meet specification. The plant has to be maintained so that there is no downtime. Workers have to be well-trained so as not to make mistakes; there is no allowance for waste, mistakes, and idle time.

Finally, the finished product has to be delivered to specification (quality and quantity) on time. A lean approach reduces the number of supervisors and quality inspectors. The workers are trained to know the production standards required and are authorised to take corrective action; in short, they become their own inspectors/supervisors. Maintenance of plant is planned to be preventative and to minimise downtime. As a result, the equipment becomes more reliable and each worker develops pride of ‘ownership’ of ‘their’ plant and equipment.

Until recently, supply chains were understood primarily in terms of planning demand forecasts, upstream collaboration with suppliers and planning and scheduling resources to meet demand. Cost reduction is often the key driver for Lean, but it is also about speed of delivery and quality of products and service to the customer. Note that the customer need not be the end user, but the next stage in the supply chain.

The competition for gaining and retaining customers and market share is between supply chains rather than against a competing brand. Each stage of a supply chain therefore has to be lean with four interrelated key characteristics or objectives; elimination of waste, smooth operation flow, high level of efficiency and quality assurance. An efficient lean supply chain integrates upstream operations with suppliers, integrates downstream activities with customers, uses two-way continuous communication and information exchange.

To be competitive and profitable, a lean...
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