Question

Setting up issues for a fictional retail chain of coffee shops.

How do you deal with issues such as?

Customer demand and process capacity relationships

How production is planned, from customer demand to production schedules

Quality Management issues

Product delivery issues

Collaboration and coordination issues

The interfaces of the process with both the external and internal customers

Waiting line issues and related staffing decisions

Answer 1

At the beginning its better to be cautious about the bottom line of the whole business due to high barriers of entry in such an industry. It would be advisable to carry out a market research first, thereby understand the sentiment of the customers and gauge the demand intensity. Once a good sample size of potential customers are surveyed and the whole demand forecast is done with precision the important activity of setting up process capacity can be started. There is absolutely zero sense in starting to set up process capacity without actually having the sense of the market demand and characteristics.

After the demand forecast and market research there will be some insights of the ground reality regarding production capacity requirements. Also market has to be segmented into various categories according to their economic and consumer behavior (frequency of buying). Products which have best selling potential according to the market characteristics and economic situations should be prioritized. For consumers having repeated buying behaviors should be arranged membership benefits of coupons, packages and like. Priority order should be best on optimization of resources with minimal waste. Mapping of products with consumer segments and targeting them with fast production should be prioritized.

At no times should the quality control measures be lightened while chasing more and more top line business. Quality management issues are bound to arise during the initial years of the company due to number pressure, but one has to bear in mind that there is no option to compromise on quality levels in food /hospitality sector largely due to its profound implications and legality issues.

A solid team of cross departmental employees as well as dedicated food engineers should be appointed to maintain the quality control measures at all point of time.

Initial years there will be capacity constraints faced by the company wherein the product rollout is facing serious complications due to unexpected demand swings and capacity constraints. These should be dealt with proper planning and allocation of skilled manpower to maintain track the bottlenecks if any.

Market tie-ups with important players who can support and nurture the ambitions of fast growth. Motivated marketing personnel’s should be hired and groomed to enforce the affinity programs with aligned partners. Logistics, marketing, delivery partners should be selected carefully and good relation should be maintained with all of them to foster seamless operations

There will be corporate clients and retail clients who will served by the internal customers or the employees/managers of the company. Even the stakeholders, shareholders etc are all internal customers.

Internal customer’s perspective and interest should be taken care of at all times because negative emotions among them will eventually impact the external customers or endpoint customers. Hence a positive vibe and attitude have to maintain among the internal customers by ensuring a proper interface of process.

The link and flow of activity between the external and internal customers should be linear and it should be unidirectional. The process would start with internal customers making sure all production, packing, distribution is done properly thereby maintaining a strong relationship with the external customers.

Operations should be smartly handled to avoid any long lines and to reduce waiting time among the customers. Customer satisfaction is inversely proportional with the waiting time for the product and hence it should be maintained at a minimum with proper planning. The average number of customers in a day and hour should be taken into account (with buffer) and then appropriate employee/staffs should be appointed for them. The customer to be served and employee to serve them ratio should always be rational and realistic to avoid negligence and burnout and ensure efficiency .

Lines should be strategically maintained with multiple counters and employees dedicated in a order of demand.