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Mini Case Analysis: JAM’S RESTAURANT

TOMS5302 Operation Management

Nazir Nadi: 102287571

Ijeoma Ekechukwu: 101288735

Rajesh Augustian: 101286393

Feb. 18, 2023

N.I.R
TOMS 5302 V
Ottawa, ON

VP of Operations
Jam’s Restaurant

Dear Vice President of Operations,

We would like to perform the case analysis and submit a managerial report to you on JAM’s Restaurant
as the organization is working towards reducing its quality costs and improving its reputation and
customer feedback. The following report will provide you with a summary of the various quality costs
analyzed by our team and include recommendations for your organization’s improved operational
management functions.

Best Regards,

……………. ………………… ……………….

Nazir Nadi Ijeoma Ekechukwu Rajesh Augustian

Student ID:101287571 Student ID:101288735 Student ID:101286393

Executive summary

The Authentic Mexican Restaurant provides a wide variety of Mexican dishes, all prepared and
presented in the traditional style. Located in a well-established New England business sector, it is
on the outskirts of a major metropolitan metropolis. The restaurant's decor is a nod to Mexico,
with bright colors and intricate patterns. Jose's restaurants provide authentic Mexican food and
have live music for guests, however the space is too tight to accommodate the restaurant's
extensive menu, which has a wide variety of dishes prepared in the traditional style. Twenty-
three different main dishes are available, all of which are constructed using eight different stocks
and a wide range of additional components. It's a tight squeeze for diners, and there's no free
parking in the lot. You won't mind the wait for the delicious Mexican cuisine and lively Mexican
music. Usually, service is quick, but on Friday and Saturday evenings, delays of up to 45 minutes
are common due to the lack of a dedicated waiting room and the restricted interior space. The
fact that reservations cannot be made in advance is a further snag. After placing an order, a meal
is often ready to be served within 12 minutes. Last-minute cooking takes up a significant chunk
of that time. During peak hours on Friday and Saturday evenings, polls found that the vast
majority of diners were pleased with their meals. Of those who dined there, 67 thought it was
worth the price, while just 16 thought it was too expensive. Most customers are dissatisfied with
the length of time it takes for their meal to arrive at the table, according to polls.
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1- The EVALUATIONS

The key to running a successful eatery is providing customers with clean, comfortable, and
pleasant surroundings and serving delicious, freshly prepared meals. Create delighted diners who
will return for more and brag about their enjoyable experience to their friends. Maintaining a
strict adherence to time constraints is crucial to running a successful company. If Jose's
Authentic Mexican Restaurant doesn't speed up its meal prep and service, it risks losing
customers. If the wait time to get served at a restaurant doesn't get better, business will go
elsewhere. What consumers really care about, however, is the food's quality. If the cuisine isn't
up to par, the whole experience won't be satisfying for the paying consumer. These issues have
combined to cause a decline in patronage at Jose's Authentic Mexican Restaurant. When diners
are unhappy, business across the establishment declines, and the restaurant may even close.
There is a lack of gratuity for Karetski and the other wait staff due of the poor quality of the
cuisine. If a client has a poor eating experience, they are less likely to leave a generous tip and
are therefore less likely to recommend the restaurant to others. Expenses Related to Preventive
Measures Buying in highest quality ingredients and checking them for quality. Evaluative
Expenses If a supplier frequently delivers low-quality parts or materials, switching to a new
source is one way to boost quality. impact the time it takes to get resupplied, Dangers to the
Budget from Within If the incorrect order is given to a client, the restaurant must provide a
complimentary substitute. If it Burns, It Wasn't Your Fault The waiter provides an inaccurate
description of a meal. After eating, the vegetarian learns the truth and argues until she is given
her money back.

External clients: Taste: The food's taste, texture, and general appeal should all be considered
when determining quality. Service: The staff's responsiveness, friendliness, and promptness should
be considered indicators of quality. Ambience: The comfort and cleanliness of the restaurant should
be used as a gauge of quality.
Internal clients: Consistency: The meal need to be cooked consistently to ensure quality.
Preparation: The food's quality should be determined by how well and safely it was prepared.
Presentation: How appetizingly the meal is presented should determine its quality.
Explanation:
Customers from the Outside: Taste: The quality of the meal should be judged based on how it tastes,
how it feels in your mouth, and how much fun it is to eat altogether. When determining the overall
quality of a restaurant, outside consumers place a significant emphasis on the cuisine's flavor. Both
the aromas and tastes of the dish should be enjoyable, and the consistency need to be suitable for the
kind of meal being served. In addition, the whole experience of eating the meal has to be one that is
pleasurable. It is essential for patrons to leave the restaurant with the impression that the money spent
on the meal and the time spent there was well spent.
Service: The quality of the service should be determined by how quickly it is provided, how
kind the personnel is, and how attentive they are. It is expected that the service at the restaurant
would be speedy and effective. In addition, the employees should have a pleasant demeanor and be
sensitive to the requirements of the clients. When engaging with clients, the wait staff have to display
courtesy as well as understanding of the menu items. The customer should have the impression that
their requirements have been satisfied, and that the personnel has been helpful and flexible.
Atmosphere: The quality of the atmosphere should be determined by how comfortable and
clean the restaurant is. The ambiance of a restaurant has a significant role in the quality of the
experience as a whole. It is important that guests feel welcome and at ease at the restaurant. In
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addition to that, the restaurant has to be tidy and well-maintained at all times. It is important that the
restaurant has a nice aroma, and all of the furnishings should be in excellent shape. The restaurant
should provide a relaxed and secure environment for its guests.
Customers Within the Organization: The quality of the meal should be dependent on the fact
that it is cooked in the same manner each and every time. When it comes to one's internal consumers,
consistency is of the utmost importance. Every meal, regardless of who is responsible for cooking it,
should adhere to the same high level. Customers should have the same experience every time they
order the food, and that includes having the same experience with the flavor, the texture, and the
presentation of the dish.
Preparation: The quality of the meal should be dependent on whether or not it was prepared
correctly and in a safe manner. The food need to be prepared in accordance with the criteria and
procedures for food safety that have been established by the restaurant. Customers on the inside of
the company have to have full faith that the food may be consumed without risk and that it is
prepared appropriately.
Presentation: One should judge the quality of the meal based on how aesthetically pleasing it
is presented. The way in which the food is presented is a significant component of the overall quality.
It is important that the food be presented in an appetizing manner on the dish and that it be
aesthetically pleasing. Because of this, we will be able to guarantee that the dish's internal consumers
are pleased with the presentation as a whole.

Question 2. The preventive costs from Ivan’s perspective will be costs incurred to buy good
quality food ingredients. As per this assumption, he could say that the latest items delivered are
causing these operational issues for the restaurant. Also, the cook being unsure might mean extra
efforts are made to ensure the enjoyability of the food and this results in appraisal costs. And the
matter not being dealt with by the management before it is transferred to the customers means
internal failure costs.

From the management’s perspective, the cost is external failure costs. This is mainly
because the issue has been never brought to management’s attention and dealt with before it
resulted in negative customer feedback. However, if it becomes known to the management team,
it becomes an internal failure cost and this will lead to preventive and appraisal costs. The
management must incur prevention costs such as the cost of quality planning, quality control and
all costs associated with them. Another important aspect is appraisal cost. The management must
incur costs due to testing, and ensuring the enjoyability of the food, efficiency of the service and
affordability among other factors.

Question 3: The pareto explanation on the customer satisfaction chart identifies areas for JAM’s
restaurant to focus on first in the process improvement plan. Focusing on the 3 elements:
promptness of seating, Service of your waiter, Price of dinner that are physical evidence in a
service blueprint, constitutes a major percentage of customer satisfaction ratings. Getting these
factors right will positively impact customer ratings and enable JAM’s to improve perceived
quality of service. The more efficient and streamlined the service delivery process. The better the
perceived value stream offered by JAM’s to customers’.

The fishbone diagram identifies all process challenges or hindrances that ought to be tackled for
process improvement. Focusing on 4 areas: staff, suppliers/vendors , location and service, JAM
is expected to remove as many hindrances as possible to enable them to create more dining value
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to customers. JAM needs to increase revenue by improving process efficiency in dining services
experience, implement measures to check product quality, reduce ingredients defects, delay in
food processing and service upsets, decrease service time by reducing waiting time or speeding
up seating time and lastly, automate the experience by offering reservations to delay seating
time.

Question 4:

The survey was conducted during evening mealtime on last Friday and Saturday; hence, it does
not include all of JAM's customers. Survey records for Sunday, Monday, Tuesday, Wednesday,
and Thursday were not included in the report provided; only records for Friday and Saturday
surveys were given. Friday and Saturday evenings are usually busy days for restaurants; hence,
customers must have experienced more wait time than they would have if they usually came in
on Sundays to Thursdays.

Additionally, the survey should have asked JAM's customers what they wanted from their dining
experience. Questions on how service can be improved in areas they felt JAMs had shortcomings
Yes, the survey is a feedback mechanism; however, asking customers to define what quality
means to them will ensure customer expectations are met with actual service delivery aimed at
closing service gap deficiencies to support higher customer satisfaction.

Question 5: Part A and B

Cost Element Amount QualityCostCategory

1 Incoming test and inspection 7500 Appraisal cost

2 Scrap 35,000 Internal failure

3 Quality Training 0 Prevention

4 Inspection 25,000 appraisal

5 Test 5,000 appraisal

6 Adjustment cost of complaints 21,250 external

7 Quality audits 2,500 appraisal

8 Maintenance of tools and dies 9,200 prevention

9 Quality control administration 5,000 prevention

10 Laboratory testing 1,250 appraisal

11 Design of quality assurance equipment 1,250 prevention

12 Material testing and inspection 1,250 appraisal

13 Rework 70,000 Internal failure

14 Quality problem solving by product 11,250 prevention

15 Inspection equipment calibration 2,500 appraisal

16 Writing procedures and instructions 2,500 prevention

17 Laboratory services 2,500 appraisal

18 Rework due to vendor faults 17,500 Internal failure

19 Correcting imperfections 6,250 Internal failure

20 Setup for test and inspection 10,750 appraisal

21 Formal complaints to vendors 10,000 external

22 Total Cost 234200

Quality Cost Category Total Amount Quality Cost percentage

1 Prevention 29200 12.46%

2 Appraisal 45000 19.21%

3 Internal failure 128750 54.97%

4 External failure 31250 13.34%

b) What implications does this data suggest to JAM’s restaurant managers?

The data shows that internal failure contributes to the most quality cost for the business. The
management must take measures to prevent internal failures and this needs to be done by
reassessing the prevention costs and strategies in place to prevent further quality costs. There
seems to be a lack of clear communication between the employees and the management as the
cook has been complaining about poor food quality affecting the service time and food quality.
When we observe the amount spent on various cost categories, it is clear that low prevention and
appraisal costs lead to high internal and external failure costs. Additionally, external failure costs
largely affect the organization’s reputation so this must be given careful consideration by the
management.

Concluding Statements and Recommendations

When it comes to the issues with service that have been occurring at Jose's Authentic Mexican
Restaurant, the best course of action to take would be to have the managers handle the service
system, have the waitstaff do their jobs, have the cook do his work, and on days when there is a
high volume of customers, hire an additional part-time cook to assist with the food preparations.
Additionally, find a different supplier who can provide what is required and cultivate a working
relationship with them. This aim is attainable given that we are not starting from scratch but
rather putting in a system that is more efficient while maintaining the control and maintenance
that are already in place. In order to resolve this issue, one has to choose a supplier that can be
relied on and trusted, as well as increase the number of employees. They will have little trouble
completing this task in a short amount of time. This is a reasonable expectation since they use
strategies that have passed the test of time, such as adopting a standardised approach to
management and putting a focus on hiring for available positions with suitably qualified
candidates. In addition, when the restaurant is very busy, we bring in temporary help to reduce
the strain on our head chef, who is ultimately responsible for the restaurant's unique flavour and
ambience. We have no doubt that this is a realistic alternative after seeing how well-established
businesses cope with circumstances that are comparable to that. As a consequence of this, the
dining restaurant should cater to the demands and requirements of its customer base while also
going above and beyond for them.