Subway-- Operations Management

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The Subway sandwich chain is the largest restaurant operation in the world, as determined by the number of locations. Subway has been gaining on other fast-food restaurants such as McDonald's for years. It’s smaller format costs less to open and operate than other chain restaurants and lets it squeeze into heavily trafficked locations places such as McDonald's might bypass. In its clarity, simplicity, and achievability, the Subway restaurants have one of the best mission statements in the U.S. restaurant industry. The Subway mission statement is to “delight every customer so they want to tell their friends—with great value through fresh, delicious, made-to-order sandwiches, and an exceptional experience.” Rarely are mission statements this forthright. Subway restaurants also have a larger vision, which is to “be the number one Quick Service Restaurant (QSR) franchise in the world, while delivering fresh, delicious sandwiches and an exceptional experience. Subway is, after all, a franchise operation, and has in all, nearly 34,000 restaurants throughout the world. Even though Subway has been international for some time now, franchisees and employees still strive to achieve the company’s mission. They also strive to make the Subway vision a reality, further defined by the Subway core values of family, teamwork, and opportunity. Another key part of the Subway vision is innovation. Innovation has been one of the keys to Subway’s success. In 2008, the chain scored a huge hit with its introduction of the “$5 foot-long.” Incorporating Subways into a lot of Walmart’s was also a very successful idea for Subway. New ideas are also essential to the workings of the company’s supply chain and use of operations management. Subway restaurants are best known for their commitment to providing fresh ingredients and healthier food alternatives to customers. Behind the scenes they have been working diligently to improve the sustainability of their products, as well as their operations. When you walk into a Subway, you may notice that the store runs like a well-oiled machine. This is no accident. It is a carefully crafted concept that is laid out for all Subway franchise owners, managers, and employees. Because the store runs like a well-oiled machine, during heavy volume times they apply one-piece flow—using a team instead of individuals. Team members will assemble parts of the sandwich passing it from one to another along the serving line. Each person performs a specified task in a specific sequence. The sandwich area is laid out in the form of an assembly line from taking your order to paying for your order. There are signs with pictures along the assembly process to support the customer’s order. All of the ingredients used to make the sandwich is displayed on the line through clear, viewing panels. This concept is an element of a visual factory. Subway is a great example of this. I feel that Subway shows one of the best examples of forecasting, and many other food companies should follow suit. The process of predicting the future, underlines the basis of all business decisions at Subway mostly to do with personnel, production, and most importantly, inventory. It is vital to make sure that you have the upcoming inventory absolutely matched as close as possible to demand. The forecast for demand can lead to the price on the menu, depending on how many customers like a certain sandwich or even new products that may come in with new, seasonal promotions. The price of certain items on the menu may be due to new items, favorite items, or just simply a change in the economy. The actual demand for a sandwich has to be used, as well as a forecast of store sales around us in the same region. We have to be able to place a predicted demand on the data that we do know. The trick is to not place the price higher than your competitor and not necessarily lower either, as this may lead to lower or no revenue. If a business...
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