Subway Case Study

1 January 2017

By collecting all the informations, I am writing a report on how the branch can overcome the operational issues on quality and capacity management relating to Operations Management theories. II. ABOUT SUBWAY: Subway is one of the renowned restaurant in the world. Subway brand continues to be the global leader of providing nutritious quality food and delicious sandwiches which everyone love to eat. Moreover, the mixture of fresh ingredients, a very good customer service and a dash of innovation that makes the customers to enjoy the food in the restaurant and also makes them to feel like home when they have the food.

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Subway started the business in 1965 in Bridgeport, Connecticut by Fred DeLuca partnered with Peter Buck. They set a target amoung themselves that they will open 32 stores in 10 years. Fred soon learned about the basic functionalities of operating the business as well as the significance of providing high quality food. Not only that he learned how to provide excellent customer service, keeping the operating costs low and finding great locations for an exemplary experience. These lessons has led them successful in the business and it stands as the foundation to continue the business across the world.

Their commitment and dedication sinked well to expand the business all over the world. Now Subway have 36,048 restaurants in 98 countries across the globe. Subway Mission Statement: The main intention of subway is to delight and make the customers feel about their food and tell the their friends and relatives that they provide nutritious, fresh and delicious food, made-to-order sandwiches and an great experience. The Subway franchise is the world’s largest submarine sandwich franchise and stands as the second largest restaurant franchise of the world. The corporation that owns Subway is Doctor’s Associates Inc. DAI). DAI is the franchisor of the Subway. The below figure (1) illustrates the growth of subway for the past five years. Additionally, the main figure (2) illustrates the growth of Subway from 1965 to 2010. 1) Subway Departments: Subway’s operations are mainly segregated by various departments to run the operations in a highly skilled full and world class manner. The below listed are the few departments of Subway and its process: a) Executive: This team mainly supports company wide operations at Subway’s headquarters in Milford, CT (USA) and supports customer care and business process team. ) Administrative: This department is responsible for employee management and administration tasks and grounds of opening new centers. c) Franchise Brands: This department offers a broadened functions of innovative and promising deals, ideas that will improve the Subway experience for franchisees and the customers. d) Development: This department recruits new franchisees and works closely with potential franchisees to open new Subway restaurant. The team helps in identifying new franchisees and also helps them in real estate planning to start the operations. ) Operations: This department mainly focusses on standards and provide sufficient training and guidance to the franchisees. They even provide operational assitance to the franchisees and field staff. f) Technology: This department is responsible for implementing and maintaining all technical support throughout the company. They provide technology assistance to the franchisees to operate the business more efficiently and effectively. g) Marketing: This department promotes the product commercially and print ads. Research and development team is integrated in this department to test markets the food and responsible for creation and placing ads. ) International: This department support the franchisees to open new franchise outside US and canada. Subway future goal: The goal of subway is to be ranked as the number one ‘Quick Service Restaurant’ at the same time maintaining the freshness and quality of the product and making the customers to gain exceptional experience. In the above paragraphs, the report was described primarily about introduction to Subway, various departments in Subway, activities and future of goal. The reason why I included the acivities of Subway is to add more significance to the topic in particular.

Moving forward, the report will be described about the operations issues of quality and capacity management of the below mentioned branch. The Galaxy Centre Bridge Street Luton Bedfordshire LU1 2NB Tel: 01582 414 618 Opening Hours: Monday to Thursday 10:00 – 00:00am Friday 10. 00 to 03. 00am Saturday 10. 00 am to 4. 00am Sunday 10. 00 – 00. 00am Manager: Abdul Ajees III. QUALITY MANAGEMENT: American Society for Quality defines, “The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs”.

Quality management is the essential part of all business. It is the process of controlling, co-ordinating and improving quality. Assume that if the customers are satisfied there are plenty of chances that the product is of high quality and maintain the standardisation constantly to increase the number of customers. The product with high quality will always lead to success. The customers those who are happy with the product will be constantly visiting to the same shop and also refer to the friends and relatives about the quality product to experience it.

Subway on this particular aspect they inclined to maintain, monitor, control and improve the quality of the product on a ongoing basis. There are few customers who frequently visit to the shop and try varieties of sandwiches they visit each time, report given by the manager. Customers are more fascinated and enjoying the experience to visit to this particular branch and they also bring their friends to enjoy the food. People are more interested in toasted sandwiches and burgers; chicken and bacon ranch are mostly preferrred by the customers. “Quality in a product or service is not what the supplier puts in.

It is what the customer gets out and is willing to pay for” – Peter F. Drucker, American Management Guru 1) Why quality is important? Improved quality will lead to increased profits. The figure (3) illustrated below provides a clear understanding what quality is about based on Gummerson. E (1993). Improved qualityIncrease profits 2) Total Quality Management: I would to like to relate a incident that happened when I was observing in the Subway luton branch. There was few customers standing in the queue and there were two subway artisans who were preparing the sandwiches.

The odd thing that I noticed was the artisans prepping the sub stood nearly 30 seconds until the sub was toasted. He took that out and added the condiments and served the customer. In order to reduce the cycle time, six sigma parallel event should eventually play a role here, both the process should have continued parallelly by preparing the sandwiches of the first customer and toasting the sub of the next customer. This is turn will reduce the idle time of the artisans and even the customers will feel more excited when their queueing time is reduced.

Although the customers are not infuriated by the service or delay, I feel the situation may become worse even if one customer gets exasperated. Therefore, I am introducing Deming’s 14 total quality management (TQM) principles in this topic to improve the quality, competitiveness and productivity for this particular branch. i. Create constancy of purpose for improving products and services. ii. Adopt the new philosophy. iii. Cease dependence on inspection to achieve quality. iv. End the practice of awarding business on price alone; instead,minimize total cost by working with a single supplier. . Improve constantly and forever every process for planning, production, and service. vi. Institute training on the job. vii. Adopt and institute leadership. viii. Drive out fear. ix. Break down barriers between staff areas. x. Eliminate slogans, exhortations, and targets for the workforce. xi. Eliminate numerical quotas for the workforce and numerical goals for management. xii. Remove barriers that rob people of pride in their work, and eliminate the annual rating or merit system. xiii. Institute a vigorous program of education and self-improvement for everyone. xiv.

Put everybody in the company to work to accomplish the transformation. Looking at the 14 principles of the Deming’s, it clearly defines the improvisation of quality, customer satisfaction and productivity. Thus, by implementing the above principles to this particular branch may result in more productivity and customer satisfaction. Total Quality Management (TQM) is a process to achieve long term success to the company focussing on customer satisfaction. TQM mainly works out when all the members of the branch are participative enough to improve the efficiency of the processes and services. ) Shewhart Cycle or the Deming Cycle: The PDCA cycle is the four stage process originally developed by Walter Shewhart and reintroduced by Edward Deming. Plan, Do, Check and Act are the four stages which identifies the problem that we face and the problems that we are going to solve. By introducing the PDCA cycle for this Subway (Luton branch), it will definitely help in continuous improvements. The cycle basically emphasises on improving programs by making a plan, test the plan, check whether the plan is working and implement the plan if it is successful.

So, in this branch the artisans really need to change the strategy to reduce the cycle time and satify the customers by improving their quality of service. IV. CAPACITY MANAGEMENT: Capacity management is the activity between demand and the supply chain. It is the process or an operation to supply the products to customers when they are in need of. Neck of the moment or bottleneck occurs when there is demand for the product and the capacity seems to be less. The mismatches may be caused due to demand, supply or both. The capacity management and divestiture efforts, coupled with a rigid financial discipline, are having a favorable impact on the performance and will continue” -John Dillon There are basically two components of capacity management, they are: 1) Capacity Constraints: There are many stores or shops operates at below their maximum processing capacity. It may be because there is less demand or thye might have additional capacity to fill the customer needs when they get a bulk order.

But, in the case of Subway restaurant keeping the capacity to the maximum when there is no demand will not be worthful as food items tend to decompose earlier when compared to other items. I observed Subway has maintained the capacity up to the mark on all days by predicting the demands. On Saturday the shop will be opened until 4 AM and the shop ensure there is sufficient capacity on the items for the customers they visit late night. The capacity management on Subway really worked out well and I was astinished to see the management maintaining the stocks for all the customers. ) Planning and controlling capacity: The planning and controlling capacity is the way of setting the effective capacity based on the demand of the customers. This basically means how the shop is going to react when there is a fluctuation in demand. So, pre-planning and analysing how the business moves on week days and week ends and based on the food item sales the capacity is been controlled in order to save excess item when there is no demand. Thus, planning and controlling capacity is playing a vital role in Subway to increase the profit for the business.

The above figure (4) depicts how the process flow on each stages to plan and control the capacity when there is a demand. As per the figure, even Subway works the same way. The manager is responsible for the stock control and checks the stocks periodically and informs to the suppliers before the itmes reaches “bottleneck” stage. The suppliers acts very quick and provides the required items on a timely manner. Capacity management plays vital role in the business. If the planning and controlling is not done on regular intervals productivity of the business is lost, customer satisfaction will go down.

Sometimes, it may look like there is shortage in the capacity, but actually seeing there might be lack of capacity planning process. In other words, “Strategic Capacity Management Process” would be the backbone for the company when it comes to measurement and stock. Apparently, Subway plans and controls capacity especially in this branch and ensures every customers are satisfied with the products and services provided by Subway. Moreover, Subway analyses the situations prior, so that there is maximum capacity for all the customers who visits the store during peek and non-peek hours.

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