Abstract
Chick-Fil-A, Inc is one of the major fast-food restaurants in the United States. The company has registered impressive growth over the past several decades and has not considered spreading its operations beyond North America. The firm currently faces numerous challenges in the market, top of which include competition, changing tastes and preferences in the market, disruptive technologies, and the growing need to have healthy foods in the restaurants. Operations management concepts are considered critical in enabling the company to overcome market challenges. The paper identifies various concepts such as supply chain management, sales and operation planning, capacity planning strategies, six sigma, supplier management, quality function deployment, value stream, trends in operations, and customer value as the main factors that this firm should consider to various challenges the market. Each of these concepts seeks to address various aspects of operations management within the firm. If implemented properly, they can help this company to achieve success in this industry.
Background
Chick-Fil-A, Inc is a fast-food restaurant founded on May 23, 1946, in Atlanta, Georgia by Truett Cathy (Turner, 2015). It was initially known as Dwarf House, but the name was changed to Chick-Fil-A, Inc in 1967 (Bullard, 2018). The company experienced rapid growth in the 1960s and 1970s because of the strategies that were employed by its top management unit. Currently, this family-owned business has over 2,200 branches across the United States, with average annual revenue of USD 8 billion (Miller, 2017). The success is attributed to the ability of this fast-food restaurant to embrace emerging trends and best practices in the market to enable it to meet the needs of its customers in the best way possible. However, the fast-food industry has been facing serious challenges in the recent past that this firm has had to deal with in its normal operations. Stiff competition is one of the greatest challenges that Chick-Fil-A, Inc is facing in the market (Levy, 2016).
The emergence of new restaurants and the expansion of the rival firms have created numerous options for customers whenever they want to purchase products in this industry. The changing tastes and preferences of customers, increasing costs of operation, and the need to embrace a healthy diet are some of the issues that firms in the industry have to manage. As Miller (2015) observes, the ability to achieve success in such a highly competitive environment depends on the operations management strategies that a firm employs. It is necessary to find ways of lowering the cost of production by improving efficiency at every stage to achieve the desired goals. In this paper, the researcher will look at how this restaurant can use various concepts of operations management to achieve success in the current competitive market.
Research Aim and Objectives
Operations management is becoming increasingly important to firms in managing challenges in the market. Hill and Hill (2018) explain that when competition becomes stiff, efficiency in operation becomes the most important defining factor of success. In this study, the aim is to investigate how Chick-Fil-A, Inc can use various concepts of operations management to improve its efficiency, lower cost of production, increase profitability, and enhance its sustainability in the market. The objectives of the study that should be realized include the following:
- To identify and discuss the main challenges that Chick-Fill-A, Inc faces in the market;
- To identify and discuss various operational concepts and strategies that can help the firm overcome the market challenges;
- To apply the concepts to the firm in a practical manner.
Operations Management
Operations management has become one of the critical areas of management that define the ability of a firm to achieve success. Lee and Tang (2018) define operations management as “the administration of business practices to create the highest level of efficiency possible within an organization,” (p. 998). It involves all activities done to transform raw materials into goods and services with the aim of generating profitability for a firm. In the past, many large multinational corporations enjoyed a monopoly in the market, and they had the liberty of setting terms of business. Sometimes their terms unfairly benefitted them at the expense of the customers. Some of them set terms that were unfair to the employees. They knew that their workers could not easily switch from one job to another. However, that is no longer possible because workers can easily move from one employer to another as long as they have the needed skills and experience. The bible says, “Do not defraud or rob your neighbor. Do not hold back the wages of a hired worker overnight” (Leviticus 19:13, New International Version). This bible verse is more relevant to business entities now than it ever was in the past.
Firms find it difficult for retaining highly talented workers. Competitors do not hesitate to poach top-notch employees who deliver the best results when assigned complex tasks. It means that when a worker notices that its current employer is stealing from him, he or she can easily move to another firm where the interest can be met more effectively. Operating in a market where employees and customers are very demanding can be challenging. It requires the management to find ways of lowering the cost to meet the demands of different stakeholders while at the same time make attractive profits for continued growth. According to Bachrach, Bendoly, and Wezel (2015), operations management is viewed as a solution to these challenges. A firm must find a way of improving efficiency in its productions to achieve success in the market. Various concepts have emerged to help improve efficiency in the normal operations of a firm. It is necessary to look at each of these concepts and their relevance to the organization selected for the study.
Supply Chain Management
Supply chain management is a detailed process that starts with acquiring raw materials from the point of origin, managing work-in-process inventory, and finally delivering the finished products to customers. Rangarajan, Sharma, Paesbrugghe, and Boute (2018) argue that it involves designing, planning, executing, controlling, and monitoring various operational activities with the view of creating value. It entails using the human resource to transform raw materials into high-quality products needed by customers in the market. Firms that embrace this concept understand how to eliminate waste of materials during the production process. As Schwarz, Hall, and Shibli (2015) observe, one of the factors that cause inflation in the cost of production is the uncontrolled waste. Perishable raw materials must be delivered at the right time and in the right quality to the production plant to minimize cases of waste. The bible says that “poor is he who works with a negligent hand, but the hand of the diligent makes rich” (Proverbs 10:4, New International Version). The concept and the verse show that God expects us to work hard and be diligent to achieve success in life. Negligence during the process of production can lead to the generation of a significant amount of waste, which affects a firm’s profitability.
At Chick-Fil-A, Inc, supply chain management can be of great benefit when it is applied in the right manner. Most of the raw materials and final products of this company are highly perishable. Using supply chain management, this firm will know when and how to access the needed materials to avoid waste. In order to implement this concept successfully in this company, the management will need to identify and form a close relationship with reliable suppliers. Through that close relationship and constant communication, the suppliers will know when to deliver specific products in specific quantities depending on the demand in the market. The goal is to ensure that there is a consistent flow of the needed products and at a rate that meets the market demand.
Sales and Operations Planning
Sales and operations planning is a customer-centric management approach that focuses on making products available in the market at all times. The concept emphasizes the need to have close coordination between the sales department and operations unit within a firm. It seeks to manage the demand volatility by ensuring that more products are availed when the demand goes up and scaled-down when the demand decreases. It requires diligent planning and close corporation of the involved officers within the firm. The bible says that “The plan of the diligent lead to profit as surely as haste leads to poverty” (Proverbs 21:5, New International Version). As shown in the verse, God expects people to take time when making decisions and understand issues at hand to avoid making costly mistakes. It magnifies God’s plan when he created man and gave him the ability to make independent decisions and to protect other creations. Profits can only be realized when the management unit understands and properly plans to meet the needs of its customers in the most effective way possible.
The concept can be applied at Chick-Fil-A, Inc to enhance its operations in the market. The demand for various products offered by the company often fluctuates depending on various factors. For instance, there is always a boom during major holidays. On a daily basis, some products are on-demand in the morning hours while others are needed during lunch hour or in the evening. Using sales and operations planning, the sales manager can work closely with the production manager to ensure that each product is available at the needed time and in the right quality and quantity. A proper channel of communication is needed to ensure that there is a successful implementation of the concept. Any miscommunication and wrong assumptions can lead to serious consequences that may affect the firm. When implemented effectively, this strategy will ensure that customers are offered the best services possible at the right time whenever they visit the restaurant. It can help the firm to create a pool of loyal customers in the market.
Capacity Planning Strategies
Capacity planning is another concept that has become popular in the modern business environment. Khanna (2015) defines capacity planning as “the process of determining the production capacity needed by an organization to meet changing demands for its products,” (p. 41). Underproduction leads to a state where a firm is unable to meet customers’ demands. When customers are constantly disappointed by the firm because of the inability to offer the right products at the right time, then it may lose its loyal customers. On the other hand, overproduction may lead to cases where some products have to be disposed of or sold at significantly low prices, affecting a firm’s profitability.
The restaurant should embrace this concept to enhance its profitability in the market. It must understand the magnitude of the demand in the market and how it can meet it using resources available in the firm. Planning is critical at this stage. The bible says, “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?” (Luke 14:28, New International Version). The verse reiterates the need for us to plan every action that we take to get the blessings of the Lord. It is the responsibility of the management to start by determining if the resources available for the firm are capable of meeting the demand. The production department, working closely with the procurement department, should ensure that what is needed by the sales unit is provided in the right quantities. Most of the products offered in fast food restaurants are highly perishable. It means that if there is an overproduction, the remaining products will have to be disposed of, leading to waste. On the other hand, if customers do not find what they need, they will go to rival firms for the same products, leading to lost revenues. Implementing this concept will benefit the company by eliminating unnecessary costs and lost revenues.
Six-Sigma
Six-sigma is a concept that focuses on removing defects in operational activities, from manufacturing to the stage where products are delivered to customers (Starr & Gupta, 2017). It is a continuous process of identifying and eliminating causes of defects and minimizing variability in business processes. As Lee and Tang (2018) observe, consistency is critical for a firm. When a client is offered a high-quality product in the market, he or she should get the same or even better ones in subsequent visits. However, when the value offered keeps fluctuating, customers will be concerned. They will doubt the ability of the firm to deliver the quality of products desired. Six Sigma emphasizes the need to reduce process cycle time, reduce costs, lower the level of pollution, enhance customer satisfaction, and increase a firm’s profits (Lee & Tang, 2018). These benefits can only be realized if the firm maintains efficiency in its production processes.
When implementing this concept, the management of Chick-Fil-A, Inc needs to promote perfection. The bible says, “Therefore you are to be perfect, as your heavenly Father is perfect” (Matthew 5:48, New International Version). Achieving the perfection of the heavenly Father may not be easy, but the bible expects us to try and be good in all that we do in life. At this company, the management should develop mechanisms of detecting and eliminating defects at every stage of operation. The quality assurance department should be responsible for the task of promoting consistency, standardization, and fighting defects. Customers should be assured of the consistent delivery of high-quality products. If implemented appropriately, the concept will help this firm to have superior products that meet or exceed expectations in the market. The food industry is sensitive, and when customers doubt the ability of a company to deliver the right quality they expect, they are likely to shift their loyalty to other companies.
Supplier Management
According to Starr and Gupta (2017), supplier management is becoming an important concept in the modern business environment, especially when the specific raw material is rare or expensive. When dealing with powerful suppliers who can sway the price and availability of a given raw material, Kumar (2017) explains that developing a close relationship is crucial. The procurement department will need to ensure that a positive relationship between the supplier and the firm is maintained. In such cases, the firm will need to convince the suppliers that the firm offers the best deal in the market. Lee and Tang (2018) also argue that the supplier should be made to believe that its success depends on the success of the firm. The business deals made between the two should, therefore, be based on mutual benefit even when the supplier has the power to set terms of sale.
The management of this restaurant needs to apply this concept to overcome market challenges such as stiff competition and changing customers’ tastes and preferences. In order to ensure that it is successfully implemented, the procurement officer will need to make a proper consultation with various stakeholders to select the most reliable suppliers. Proper counsel will also be needed to define the nature of the relationship that should be developed between the firm and the selected suppliers. The bible says, “Plans fail for lack of counsel, but with many advisers, they succeed” (Proverbs 15:22, New International Version). God expects us to involve people around us and to get proper advice when developing plains. It allows one to gain new knowledge that can improve the decisions made in such processes. When the firm implements this concept, it will have a steady flow of raw materials needed for the normal operations of this company.
Quality Function Deployment
Quality function development is a customer-centric tool that focuses on transforming the voice of customers into the final products delivered in the market. In the current competitive business environment, firms are keen on meeting and if possible exceeding the expectations of their customers (Robinson, Fallon, Cameron, & Crotts, 2016). It can only be achieved if the company is keen on listening to the feedback from the customers and making an appropriate response. This tool focuses on matrix product planning, customer-centric engineering, and decision matrices. When using it, the guiding principle should be to determine the response of customers towards the products which are already on the market and areas that need to be adjusted to improve their experience. Developed in Japan for engineering companies, this concept has gained popularity in North America, Europe, and many other parts of the world. It has gained relevance beyond engineering firms.
At Chick-Fill-A, Inc, this concept is very relevant in ensuring that the emerging needs of customers are met effectively. When implementing the strategy, the management should develop a mechanism through which customers can provide feedback about the quality of services offered and areas that still need adjustment. The firm should consider their suggestions as instructions that must be followed to achieve the desired level of success. The bible says, “Whoever loves instruction loves knowledge, but he who hates correction is stupid” (Proverbs 12:1, New International Version). God expects us to follow instructions given by people of authority to be successful in life. Customers should be considered people of authority because without them a firm cannot achieve success. The concept will benefit this restaurant by enabling it to understand and respond to the changing trends in the market. It will also create a close relationship between the firm and its customers. As Barnes (2017) observes, customers are always pleased by a firm that listens to their advice and acts upon them.
Value Stream
The concept of value stream mapping is a management approach that focuses on promoting lean production. It analyzes the current state of production, from the initial stage when raw materials are received to the final stage when it is delivered to the market, and designs a future map that should be followed in future operations. The goal is to ensure that the current map used in production activities is less wasteful compared with what was used previously. At every stage, there should be a remarkable improvement in terms of waste reduction. It focuses on the flow of information and materials within a company with the goal of identifying areas of weakness within the firm. Guggilla (2017) explains that this concept has proven to be instrumental in the success of the Toyota Corporation. Waste elimination at the firm has enabled it to lower its cost of production, marking it easy for it to set competitive prices in the market.
The management of Chick-Fil-A, Inc should consider embracing this concept to improve its operations. For this firm to implement this concept successfully, it will need to map its operations. At each stage, the management should identify wastes and their main sources. When developing the next operational map that should guide the firm’s operations, the goal should be to eliminate all sources of waste. In the food industry, it is possible to find ways of reusing leftovers. Animals such as pigs thrive when they are fed with the leftovers. The bible says, “And when they had eaten their fill, he told his disciples, gather up the leftover fragments, that nothing may be lost” (John 6:12, New International Version). It shows that God does not expect us to be wasteful. What one considers a waste may be useful to another person. Other than reducing the material waste in the normal operations of the restaurant, the food remains should be collected and recycled for the benefit of other animals. The initiative will help protect the environment by offering alternative food sources to farm animals.
Trends in Operations
Emerging trends in operations management are redefining the approach that firms are taking to enhance their efficiency in the market. According to Cook and Billig (2017), technology is at the center-stage in defining the new trends in the market. One of the emerging trends that have gained popularity in the modern century is automation. Companies are automating their operations to enhance efficiency when undertaking various activities. For example, it is now possible for a customer to book a hotel without necessarily visiting the offices of the firm. By visiting the website, the bookings can be made. The system will automatically reflect the reservations made by the customer and the transaction will be complete as soon as the payment is made. Automation helps in ensuring that different departments are coordinated in their operations. Performance measurement, employee analytics, and outsourcing are the other emerging trends that companies are embracing (Babbar, Behara, Koufteros, Huo, 2017). Outsourcing is particularly becoming popular among firms where demand for their products fluctuates from time to time.
Chick-Fil-A, Inc can embrace emerging trends to ensure that it embraces the best practices in the market. Outsourcing is one of the most appropriate trends that this firm should embrace to deal with the challenge of fluctuating market demand for its products. When there is a sudden increase in demand in the market, the firm can outsource the services of reputable catering companies in the country to help it serve its extra customers. When implementing this strategy, the management will need to conduct a background check for the individuals hired to offer extra help to ensure that they can deliver the expected results. As Khanna (2015) advises, when introducing a new concept, the firm should understand that the goal of meeting the expectations of customers remains the guiding principle. The bible says that “What has been will be again, what has been done will be done again; there is nothing new under the sun” (Ecclesiastes 1:9, New International Version). It means that although it may seem the needs of customers are changing, the truth is that emerging technologies and new systems are what change the mode of delivery. The goal of a firm should always be to meet these needs in the best way and at the lowest cost possible.
Customer Value
The last concept that is reviewed in this paper is customer value. According to Subramanian et al. (2017), a firm should understand that there are two aspects of customer value. The first one is the value desired. When a customer purchases a given product, there is a need that he or she wants to meet. As such, the customer expects that the value of the product will address the need. The second one is the perceived value. It refers to the value that the customer believes he or she has received from the product (Ozcan & Linhart, 2017). When the perceived value is greater than the desired value, the client’s needs shall be met beyond their expectations. Such a client will be thrilled and is likely to become loyal to the firm. On the other hand, if the perceived value is lower than the desired value, the customer will be dissatisfied with the product. Such a client may be forced to look for alternative products that can meet the original need in a better way. Cook and Billig (2017) explain that one of the problems firms face when dealing with customer value is the varying standards. One product may exceed expectations of a customer while at the same time another may consider it to be of low quality. Understanding each customer segment may be critical in addressing such a challenge.
When implementing this concept at Chick-Fil-A, Inc, the management should start by segmenting the market. Given that this is a fast-food restaurant, it may not be easy to have products for different classes of customers. The segmentation will be done to select the largest and most attractive class of customers so that products can be developed that meet their expectations in the most appropriate way possible. There will be the same measure when defining quality, but it must be one that meets the expectation of the majority. The bible says, “Do not have two differing measures in your house, one large, one small. You must have accurate and honest weights and measures, so that you may live long in the land the Lord your God is giving you” (Deuteronomy 25:13, New International Version). This verse shows that God expects us to be fair to everyone and to treat people with respect regardless of their social background. The same principle should be applied to this fast-food restaurant. Its products should be of very high quality. However, it should avoid trying to target different market segments with different products. As Lee and Tang (2018) observe, the very rich rarely visit fast food stores, hence it is a waste of time and resources for a fast-food restaurant to try and develop products for them. When the perceived value of the firm’s products is greater than the desired value, the number of loyal customers will increase.
Conclusion and Recommendations
Conclusion
Chick-Fil-A, Inc is operating in one of the most competitive industries in the United States. The restaurant has to compete against other well-established brands in the market. The ability to attract and retain loyal customers depends on the quality of the products it offers, convenience, prices, and reliability. It is also critical for this firm to understand the emerging market trends and deliver products that meet customers’ needs in the best way possible. The paper reveals that although this firm has registered impressive success since it was established, it faces numerous challenges that may affect its sustainability. Some of the market forces are so strong that ignoring them may have devastating consequences. Various concepts of operations management can help this firm to overcome most of these challenges. Embracing capacity planning, supply chain management, six sigma, and sales and operations planning are critical in enhancing efficiency and lowering the cost of production. Supplier management, value stream, quality function deployment, customer value, and trends in operation will enable it to deliver high-quality products in line with the changing customer tastes and preferences.
Recommendations
The management of this company should realize that its sustainability depends on the ability to consistently offer quality products at the best prices possible despite the changing trends in the market. The following recommendations should be considered by the firm:
- The firm should maintain a team of highly skilled quality assurance officers responsible for ensuring the customers’ needs are met.
- Regular market research should be maintained to understand emerging market trends and how they can be embraced.
- It is necessary to use new technologies to improve efficiency in operations, lower the cost of operations, and standardize the production process.
- The marketing unit should have a mechanism of getting regular feedback from its customers to understand areas that need to be improved.
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