Operations Management Op Place of Operations Manager New

New Product Simplified model (think of Apple or Sony) Idea for new product starts

Operations should match Strategy • Useful to compare Benihana and Rue de L'espoir •

Benihana’s Costs • • • Labor 10% Food 30% Advertising 10% Management 4% Rent

Important Issues • Scheduling--Chef controls how fast meal is eaten • Street Bar 60

Important Issues • Manufacturing Process--simple, hand tools, low waste • Inventory--only a few expensive

Important Issues • Coordination--typical restaurant have several people, waiter, bus boy, wine steward •

Production Technology • Single project Batch Assembly Line Continuous Process “Ordinary”restaurant is single project,

Inventory • Trade off: Ordering costs vs. Carrying costs For a car, ordering costs

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Operations Management • • Op

Place of Operations Manager

New Product Simplified model (think of Apple or Sony) Idea for new product starts in • Marketing, then • R & D, then • Engineering, then (designs product) • Operations, then (designs process) • Production

Operations should match Strategy • Useful to compare Benihana and Rue de L'espoir • How do you make money in the restaurant business? Turnover--get people in and get them out so place can be used several times in an evening • Revenue (Expenses) Profit

Costs for typical service restaurant

Benihana’s Costs • • • Labor 10% Food 30% Advertising 10% Management 4% Rent 5% (37%) (43%) (1. 25%) (4%) (6. 75%) • 22% back of house space--typically 30%

Important Issues • Scheduling--Chef controls how fast meal is eaten • Street Bar 60 seats Restaurant 120 seats 22. 5 min 45 min Does time in bar make sense? Street

Important Issues • Manufacturing Process--simple, hand tools, low waste • Inventory--only a few expensive things, can predict. (Apple is same way) • Quality Control--customer does, continous • Factory Layout--reduce wasted space. Chef does not have to walk far

Store Layout

Important Issues • Coordination--typical restaurant have several people, waiter, bus boy, wine steward • Training--simple (What do trainees do for 3 -6 months) • Job Design--appreciation from customers, chance to grow • Logistics--simple supply chain

Production Technology • Single project Batch Assembly Line Continuous Process “Ordinary”restaurant is single project, Mc. Donalds is assembly line, Benihana is batch Efficiency vs. Flexibility • For an Assembly Line: Bottlenecks, Balanced Line • Make or Buy?

Inventory • Trade off: Ordering costs vs. Carrying costs For a car, ordering costs are high--buy many at once. For fresh meat carrying costs are high buy a little. • Obsolescence--risk of a big inventory, stifles introduction of new product • Just-in-time--order when supply is low • Small inventories desired (Apple again)