Fresh Lunch Case Debrief

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 Fresh Lunch: Case Analysis
1. What do you think are the key issues faced by Fresh-Lunch?

2. What are the underlying reasons for these issues?

3. What advice would you give Sophia and how would you prioritise potential
improvements?

Fresh Lunch: The process

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General Debrief comments:

Summary of the challenges faced by the operation

• Queues and shortage of ingredients leading to unhappy customers, lost
revenue and lost profits.
• What is the operation set up to do? (4V and PO)
• Is the layout appropriate, or is it contributing to capacity losses?
• Part-time contracts for staff
• Opening hours between 11am and 3.30pm
• Risk of drowning in data. What data are important here?
• Queues: Assembly queue: Generally moves well. No major bottlenecks. The
“waiting to be served” queue is the big one.
• Considerable waste is generated.
• Consultants act as “mystery shoppers” to conduct the analysis

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 Demand patterns 1:

What do you see here in respect of Variation in Demand?

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 Demand patterns 2:

What do you see here in respect of Variation in Demand?

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 Question 1 & 2: Challenges: Focus areas:
Variation in Demand.

It is important analyse the data in detail. Look for trends, patterns, ‘one-offs’
that can drive the performance of the operation:

• Total demand varies a lot but follows a noticeable and repeatable ‘seasonal’ pattern
over any normal working week: If Wednesday is a ‘normal daty’, then Tuesday and
Thursday are quiet days (c75% of normal) and Monday and Friday are busy days
(c125% of normal).
• There is a 1% increase in overall demand from week 1 to week 2 and from week 2 to
week 3. So, a slight upward trend.
• The two chicken dishes account for around 35% of daily demand. (Med. Chicken =
25% +/-2% and Chinese Chicken = 10% +/-2%). They are both VERY STABLE a
proportion of the total daily sales, even when the total sales are quite changeable for
different days of the week. (ie the seasonality mentioned above).
• Thai salmon is a consistent seller, approx. 17% (+/-2%) of daily sales.
• Salmon and meat combined account for c50% of all dishes sold.

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Question 1 & 2: Challenges: Focus areas:
Variation in Demand - continued
• The flank steak accounts for c5% of total sales on Monday, 10% on Tuesday-Thursday
and 15% on Friday.
• Persian Lamb accounts for 15% of total sales on Monday, 20% on Tuesday-Thursday
and 25% on Friday.
• Increased popularity of meat is explained because these are seen as more
celebratory dishes, or “once a week” specials and many people like to have them on
a Friday in anticipation of the weekend.
• Conversely after eating a lot over the weekend, many customers prefer more healthy
options on a Monday. The trend for grilled vegetables is c28% of sales on Monday,
18% on Tuesday-Thursday and only 8% on Friday.

Key critical point: At initial glance sales data sets like these tend to look messy and
random, but in reality there are some quite predictable demand patterns here.

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Question 2: Challenges: Focus areas:
Critique the current approach to capacity….

• At present it is relatively fixed and does not account for the changes in demand
across the week and the changes in underlying demand for the different meals.

• The different meals will have different ingredients and are also likely to take different
amounts of time to prepare and serve.

• Differing ingredients means that Inventory is important here as well.

• There may be some flex in staff hours available? However this may not be ideal for
the staff, so there is a trade-off to consider here.

• The physical size of the operation is fixed.

• There may be opportunities to change the layout to provide better flow?

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Question 2: Challenges: Focus areas:
What are the consequences of the mismatch between demand and capacity?
• See some of the customer feedback comments.
• Look at the daily queueing trend… What could be happening behind the numbers?

• There could be Queue ‘reneging’ – Customers leaving the queue as the wait is too
long.
• Queue ‘balking’ – Customers deciding not to join the queue at all.
• Negative feedback, just based on the size of the queue.

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Question 3. Debrief. Advice. Consider the following:
• Use of Incentives to try and effectively ‘manage demand’
• Incentives to pre-order (ie discounts, loyalty programmes) so as to iprove the
demand estimate.
• Incentives to eat later: Attempt to smooth demand.
• Incentives to buy food at ‘home time’ to take away for dinner: Create new
demand to utilise spare capacity.

• Donate left-overs to charity: Create new demand to utilise spare capacity .

• Introduction of Technology / Apps: Better estimate demand while creating a

platform to offer incentives / build loyalty.

• Partner with another restaurant to share demand ar peak times: Change demand
while better using overall capacity.

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 Question 3. Debrief. Advice. Consider the following:
• Use store space (physical capacity) for a completely different reason over the
weekend. (e.g., rent the kitchen to train new chefs, or run cooking classes)

• Use the app to ‘nudge’ customers to another restaurant if it is really busy.

• Forecast the side dishes: Sofia needs more data to inform her decision making.

• Extended opening to increase capacity utilisation. Ie Breakfast, evening. Recognise

that this changes the volume-variety position and has cost, staff, storage
considerations.

• Look at the product mix: Should variety be reduced? Think of some pro’s and cons of
this?

• Make a daily ‘chef’s special’, which can be partially pre-prepared. Speed as a

performance objective? Use the daily product data to select these specials.

• Similarly offer specials to promote (smoother) demand. Ie “FISH FRIDAY’ or ‘MEAT

MONDAY.

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 Question 3. Debrief. Advice. Consider the following:

• Test price elasticity effects using vouchers for certain meals.

• Similarly use dynamic pricing, to change the prices of meals across the day, to
encourage demand out of high-demand (hence higher price) time periods. This is
similar to peak and off-peak rail travel for example.

• Extend the demand pattern analysis, to include weather effect and significant event
effect. E.g., how does demand change if it is very hot, very cold? What is the link to
food waste here?

• Collect longer term data to understand effects of winter and summer on sales. (ie
Hot food vs cold food..

Key critical point: You should see that there are a lot of considerations and trade-
offs in play here and this is typical across many types of operation. There will
always be a natural tendency to offer ‘more choice to increase business’ from a
marketing view and operations need to both cope with and challenge that view.

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 Question 3: Layout considerations:
• Reverse the flow of the assembly area so that the till is at the other end of the line?
• Include the fridge into the main flow?
• Relocate the eating area upstairs? The upstairs area is rarely used by the staff.
• This will also free up space for a larger assembly area.

Kitchen Area

App
Assembly bench (longer) order Stairs to Stairs to
pick up? 1st floor basement
eating

Fridge (drinks and sweets)

area

?
Original Cashier

Typical customer pathway

Proposal
Constraints:
• Probably cannot move the kitchen space and assembly needs to be near there.
• Be careful with risk of a secondary queue due to online ordering / pickup.
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Question 3: Layout considerations: part 2
• Can I widen the entrance onto the street?

Kitchen Area

Assembly bench (longer)

Stairs to Stairs to
1st floor basement
eating

Fridge (drinks and sweets)

area

App
order
pick up?

Cashier

Original
Typical customer pathway

Proposal 2

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Question 3: Layout considerations: Other ideas??

Original

Proposal ???

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Finally the case can also be useful as a demonstration
of good consulting practice.

• Pro-bono consulting work is often a part of building credibility in a given sector, prior
to getting paid work.

• Data-spec: Make sure the consulting team are clear on what data they need from a
client to examine a given problem.

• The importance of physical observation, (Gemba: Go, look, see). Spend time on site
‘in the problem’ to observe directly.

• Whilst there, ensure you talk to the right people, especially the front line staff.

• Collect customer feedback, but recognise that it may need to be filtered to get the
priority messages.

• If possible, also be there to test the solution.

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