2ndAssestment >>> KFC Operations Management Amalia Nurhidayati - 29323119 General Management 17 S
Table of Content
1.Background
ThebackgroundofKFC
2. Problem Statement
IdentifythecurrentproblemofKFCoperationas
3. Strategic Capacity Management
helpsKFCtoforecastdemandandensurethatithasthe rightamountofcapacitytomeetthatdemand.This includesensuringthatKFChasenoughstaff,equipment,
4. Process Design & Analysis Service
Processes
KFCcanuseprocessanalysistomonitortheperformanceofits kitchenoperationsandensurethattheyarealignedwithits strategiccapacitygoals.
5. Waiting Line- Simulation
KFCusewaitinganalysistomonitortheperformanceofitskitchen operationsandensurethattheyarealignedwithitsstrategiccapacity goals. KFCcusewaitinganalysistotracktheaveragewaittimefor customers.Thisinformationthenbeusedtomakeadjustmentstothe kitchenprocessasneeded.
Theoverallsummaryandreccomendation
BACKGROUND
This section contains of :
Company history
Company strategy
Mission & Value
SWOT analysis KFC
KFC supply chain
Problem statement
KFC
KentuckyFriedChicken(KFC)isagloballyrenownedfast-foodre wasfoundedbyColonelHarlandSanders,whobegansellingfried Corbin,Kentucky,USA,duringtheGreatDepression.Overtheyear mostrecognizablefast-foodchainsintheworld.
HistoryofKFC:
smallr chisebusiness.
omingahousehold
Company Strategy KFC Company Strategy
Delicious Fried Chicken Focus
KFC'smaingoalistoprovidethe tastiestfriedchickenusingtheir secretrecipeanduniqueherbs andspices.
Fast and Consistent Service
KFCfocusesonmakingsurethey serveyouquicklyandthatyou alwaysgetthesamegreattaste everytimeyouvisit,nomatter whereyouare.
Growing Everywhere and Caring
They'reopeningmoreKFCrestaurantsall overtheworld,adaptingtheirfoodto matchlocalflavors,andthey'realso tryingtobemoreeco-friendlyandgive backtocommunities.
KFC'smissionistoservegreattasting,high-qualityfriedchickento
satisfytheircustomers'cravings,ensuringajoyfulandfulfillingdining experienceeverytime.
Mission Value
Quality First
KFCiscommittedtodeliveringtop-notch,deliciousfood madewiththefinestingredientsandcookedtoperfection.
Customer Satisfaction
MakingcustomershappyisatthecoreofwhatKFCdoes. Theystrivetoprovideexcellentserviceanddelightfulmeals.
Integrity
Honesty,ethics,andtransparencyarefundamentaltoKFC'soperations,both withinthecompanyandinitsrelationshipswithcustomersandpartners.
SWOT ANALYSIS KFC
Strength
Strongbrandidentityrenownedforiconicfriedchicken andsecretblendof11herbsandspices.
Wideglobalpresencewithavastnetworkoffranchised andcompany-ownedrestaurants.
Menuinnovation,offeringdiversechickenoptionsand adaptingtolocaltastes.
Opportunities
Expandingintonewmarkets
Developingnewmenuitems
Improvingcustomerservice
Reducingtheenvironmentalimpactofoperations
Weaknesses
Unhealthyfoodoptions
Longwaittimesinsomerestaurants
Negativeperceptionofanimalwelfarepractices
Perceivedhealthconcernsrelatedtothefriedandfastfoodimage
Threats
Competitionfromotherfastfoodrestaurants
Risingfoodcosts
Healthconcerns
Economicrecession
KFC Supply Chain
Stage
Sourcing
Processing
Distribution
Activity
KFCsourcesitsingredientsfromavarietyofsuppliersaroundthe world.Someofthekeyingredientsincludechicken,potatoes,flour,and spices.
KeyPlayers
Poultrysuppliers,potato farmers,flourmillers,spice companies
KFC'singredientsareprocessedatavarietyoffacilities,including chickenprocessingplants,potatoprocessingplants,andflourmills.
Poultryprocessors,potato processors,flourmillers
KFC'singredientsaredistributedtoitsrestaurantsthroughanetworkof distributioncenters.
Third-partylogistics providers
Warehousing KFC'singredientsarestoredinwarehousesatitsrestaurants. KFCemployees
Preparation
KFC'singredientsarepreparedintomealsatitsrestaurants. KFCemployees
Serving KFCmealsareservedtocustomersatitsrestaurants. KFCemployees
The Problem
KFCCase:AddressingIncreasedDemandKFCComboPackage
KFC'sComboPackagemenuisapopularchoiceforcustomers,butthedemandforthismenu expectedtoincreasesignificantlyoverthenextthreeyears(YoYincrease10%).Combopacka chicken+rice+drinks.Thepriceperpackageis$2.5.
ThisisputtingastrainonKFC'skitchenoperations,andthecompanyisfacinganumberofcha including:
Bottleneckinthekitchenprocess:ThecurrentkitchenprocessforpreparingtheComboPackageisnot efficientenoughtomeettheexpectedincreaseindemand Thisisleadingtolongwaittimesfor
apacitytomeetthe osoinawaythatdoesnot
Strategic Capacity Management
Helps KFC to forecast demand and ensure that it has the right amount of capacity to meet that demand. This includes ensuring that KFC has enough staff and equipment
Determining capacity requirement for increasing demand in the next 3 years
Calculating value of decisions tree to know which one the most valuable decisions
The Problem - Determining the Capacity Requirement
KFChavemenu:Combopackage(chicken,rice,drink).Managementwouldliketodetermine yearlyequipmentandlaborrequirementsforitspackingoperationforthenextthreeyears.
KFCneedstodetermineifithasenoughcapacitytomeetfuturedemand.Thecompany currentlyhasacapacityof130,000Combopackagesperyear,andsalesareexpectedtogrow
boPackage.We e/year
To answer Capacity requirement for the next 3 years :
First, need Forecasting to Predict Sales for Kombo Package KFC with growth 10% YoY
Then, Calculate Equipment and Labor Requirements
WithCapacitylimitAssumption130,000peryear
2chefneededtoprepareCombopackage
1fryercanpackageeacharound100,000Combopackageperyear.
Thesalesisincreasingyear1-3,andthere willbeovercapacityinyear2&3.Sowe needtoaddextralabourandfryertomeet thedemand
Basedontheprojectedsalesgrowth,KFCwillhaveacapacityshortfallinyear2andyear3.Toaddressthisshortfall,KFC
canconsiderhiringmorekitchenstaffandpurchasingadditionalfryers
Using Decision Trees to Evaluate Capacity Alternatives
Basedontheprojectedcapacitycalculation,therewillbeovercapacityinyear2&3.Totackletheissue,thereare3strategy toconsider:Addnewchef,buynewfryer,andaddnewcashier.
KFC,iscurrentlyatapivotalcrossroadsastheownerdeliberatesonhowtomanagetheanticipatedgrowthoverthenext3years.
TheThreeOptionscostassumption:
AddingNewChef
Cost:$43,000
ExpectedOutcome:
StrongGrowth:AnnualReturnsof$150,000
WeakGrowth:AnnualReturnsof$110,000
AddingNewFryer:
CostofImplementation:$15,000
ExpectedOutcome:
StrongGrowth:AnnualReturnsof$90,000
WeakGrowth:AnnualReturnsof$60,000
Addnewcashier:
Cost:$25.000
ExpectedOutcome:
StrongGrowth:AnnualReturnsof$120,000
WeakGrowth:AnnualReturnsof$105,000
ProbabilityofStrongGrowthduetoincreasedpopulationfromthenewelectronicsfirm:55%~0.55
ProbabilityofWeakGrowth:45%~0.45
Operatingcostsforalloptionsareequal.
Waitingformorethanoneyearcouldleadtocompetitionmovingin,makingexpansioninfeasible.
1. 2. 3.Calculating Value of Decisions Tree
Fromtheassumptionof3options,wedeterminethedatatothetable.Andcalculatevalue$for3yearsofeachoptions. theobjectiveofcalculatingthevalueofadecisiontreeforaddingachef,addinganewfryer,oraddingacashieristo determinewhichoptionwouldhavethegreatestpositiveimpactonthecompany 'sprofitability
Alternative Revenue years Cost Value (revenue in 3 year - cost) Add chef, strong growth $150,000 3 $40,000 $410,000 Add chef, weak growth $110,000 3 $40,000 $290,000 Add new fryer, strong growth $90,000 3 $15,000 $255,000 Add new fryer, weak growth $60,000 3 $15,000 $165,000 Add cashier, strong growth $120,000 3 $25,000 $335,000 Add cashier, weak growth $105,000 3 $25,000 $290,000
Decision Tree Analysis
Revenue-Addchef=$410,000
Revenue-addchef=$290,000
Revenue-Addnewfryer=$255,000
Revenue-Addnewfryer=$165,000
Revenue-AddCashier=$335,000
Revenue-AddCashier=$290,000
KFCStore
Addchef Stronggrowth Stronggrowth Stronggrowth 55%~0.55 55%~0.55 55%~0.55 45%~0.45 45%~0.45 45%~0.45 Weakgrowth Weakgrowth Weakgrowth Add NewFryer Addcashier $356,000 $214,500 $314,750
Decision Tree Analysis Diagram Explanation
Wehave3optionstoaccomodatesalesgrowthfor3years:Addnewchef,addnewfryer,addnewcashier
Addingachefisthemostlikelyoptiontoleadtoasignificantincreaseinrevenue,withanexpectedvalueof $356,000.Thisisthehighestexpectedvalueofthethreeoptionsthatleadtobestoptionforfuture.
Thismeansthatthereisa55%chancethataddingachefwillleadtoanincreaseinrevenueof$410,000anda 45%chancethatitwillleadtoweakgrowthof$290.000.Theexpectedvalueof$356,000issumofstrong& weakgrowthaftermultiplyby%probability
Thedecisiontreeshowsthataddingachefisthemostlikelyoptiontoleadtoasignificantincreaseinrevenue, witha55%chanceofincreasingrevenueby$410,000.Addinganewfryeristhesecondmostlikelyoptionto leadtoasignificantincreaseinrevenue,witha55%chanceofincreasingrevenueby$255.000.
Option ExpectedValue Addachef $356,000 Addanewfryer $214,500 Addacashier $335,000
Conclusion Strategic Capacity Management
KFC can use strategic capacity management to forecast demand and ensure that it has enough staff and equipment on hand to meet customer demand. Steps involved in strategic capacity management :
Forecast demand. KFC demand for next 3 years increased 10% YoY
Assess current capacity. = KFC in year 2 & 3 will going to be over capacity
Develop plans to address capacity gaps. = To tackle the issues, we will choose add new chef for year 1-3
Positive impacts of Strategic capacity management
Improve profitability can help to reduce costs and increase revenue.
Improve customer satisfaction
By ensuring that the company has the capacity to meet customer demand
Gain a competitive advantage can help companies to gain a competitive advantage over their rivals.
Process Analysis
TheobjectiveofprocessanalysisforKFCistoidentifyand improvetheefficiencyandeffectivenessofitsbusiness processes.Wedeterminetheprocessofkitchenformaking 1kombopackagechicken.Herearethecontent:
Theflowchartprocess+stepsofactivities
Throughput
BalancingbottlenecksfromChefAtoChefBbyadding
newfryerandnewchef
ProductProcessMatrix
Break-evendemandforinvestmentnewfryerandnew chef
KFC
KomboPackage
Flowchart of kitchen proccess at KFC (for 1 Kombo Package chicken)
Executed by 2 chef
Executed by 1 person food preparator
Executed by 1 cashier
Theobjectiveoftheprocessistotakeanorderfromacustomeranddeliverthefriedchicken tothe customerquickly.Theproccessexecutedby2chef,1foodpreparator,1cashier.Thecurrent processtook 33.5minutesfor12kombopackage.Theflowchartcanbeusedtoanalyzetheperformanceofthe orderingandfulfillmentprocessandtoidentifypotentialbottlenecks.
Steps of activities
Aftervisualizetheflowchart,wedeterminethestepofactivities.Itshowsthecycletimeofeachactivities,starttimeandfinish,theworker whoresponsibletothetask.Weknowthattheoveralltimetofinishtheprocessis33.5minutes,andthetotalchickenfrom1batchis1dozen ~12pcsKombopackage(chicken,rice,drink)
9
No Activity Cycle time Start time (minutes) Finish time (minutes) Worker Notes 1 Accepting order in monitor 2 minutes 0 2 Chef A 2 take the chicken from refrigerator and cooling 2.5 minutes/3 dozen 2 4.5 Chef A 3 refrigerator = 3 dozen/2.5 min
Put the chicken into the fryer & set temperature 1 minutes 4.5 5.5 Chef B 4 Frying the chicken 15 minutes/dozen 5.5 20.5 Chef B 1 fryer = 1 dozen/15 min 5 Remove the chicken from the fryer 2 minutes/dozen 20.5 22.5 Chef B 6 Put the chicken + rice into the packaging 4 minutes 22.5 26.5 Food preparator 7 Check the quality of food 1 minutes 26.5 27.5 Food preparator
Prepare drink by cashier 5 minutes 27.5 32.5 Cashier
3
8
Give the fried chicken + drink to the customer 1 minutes 32.5 33.5 Cashier
How many orders can fill up in 8 hours?
Thisshowsinformationaboutcycletime,totalproduction.Wecalculatethetotalproductionfor8hours(1daywork).
1 Accepting order in
2 take the chicken from refrigerator and cooling
3 Put the chicken into the fryer & set temperature
4 Frying the chicken
5 Remove the chicken from the fryer
6 Put the chicken + rice into the packaging
7 Check the
8 Prepare drink by cashier
9
refrigerator = 3 dozen/5 min
Chef B
- 1 fryer = 1 dozen/15 min
Chef B
Food preparator
Food preparator
FirstBatchintotaltimeweneed=33.5minutes~1dozen
Cycletime2ndbatchandsoon=16minutes(putchickenintofryerandfryingthechicken)
8hours=480minutes
Sointotal#dozenwecanmake=(480-33.5)/16min+1dozen=29dozenchicken
**thefirstbatchneedtopreheatthechickenand2ndbatch=justaddadditional16minutes
No Activity Cycletime(minutes) Worker Notes
monitor 2
A
Chef
2.5
3
Chef A
1
15
2
4
1
quality of food
5
Cashier
1 Cashier Total 33.5 minutes 8HOURS 29dozen
Give the fried chicken + drink to the customer
Capacity Calculation
Can produce Fried Chicken
Value = 29 doz/day x $2.5 (price/chicken) = 348 pcs x $2.5 = $870/day ~ $26.100/month
How much of time for Chef A and Chef B to fill each orders?
WewanttoknoweachCheftaketimepereachorder,anditshowsthatinbalancetimework
CHEFA
take
4.5minutes
CHEFB
3minutes
ChefAneedtimetoacceptingorder(2min)+takeoutfromrefrigerator(2.5min)=4.5minutes
ChefBneedtimetoputchickenintothefryer(1min) +removethechickenfromthefryer(3min)= 3minutes
time/each
time/each order No Activity Cycletime (minutes) Worker 1 Accepting order in monitor 2 Chef A 2 take the chicken from refrigerator and cooling 2.5 Chef A 3 Put the chicken into the fryer & set temperature 1 Chef B 4 Frying the chicken 15 -
Remove the chicken from the fryer 2 Chef B
order take
5
We relized that there’s bottleneck (inbalance) from take chicken from refrigerator to put the chicken into fryer. Below show the closeup bottleneck process :
Current layout
Takethechickenfrom refrigerator
Cycletime:
Putthechickenintothefryer andFriedthechicken
Cycletime:
Raw Chicken cooked fried chicken (WIP)
ChefA=40dozen/hour have3refrigerators=3 dozenchicken 3dozen/4.5minutes
1chef=20dozen/hour
have1fryer=1dozen chicken
1dozen/3minutes
ChefA
3Refrigerators 1Fryer
There’s inbalance process from refrigerator to fryer
Capacity=1chef/3dozen/4.5minutes
ChefB
Capacity=1chef/dozen/3minutes
Inbalanceprocessfrom3refrigeratorto1fryer,alsothere’sinbalancecapacityfromChefA(40dozen/hour)toChefB(20dozen/hour)
>> >>
How to balance the process from refrigerator to fryer?
If we add 1 fryer, the capacity will balance
CapacityofChefAandChefBarenotbalanceiftherejust1fryer,butifweadd1morefryertotheprocess,thecapacityofChefA andChefBwillBalance.ChefBcapacityincreasedduetothejobdescthatcorrespondswiththenumberofthefryer(Putthe chickenintothefryer&settemperature,revomethechicken)
Before
3dozen/4.5minutes
Rateperhours=40dozen/hour
ChefB
ChefA +
1dozen/3minutes
Rateperhours=20dozen/hour
If we add 1 fryer
After
ChefA
3dozen/4.5minutes
Rateperhours=40dozen/hour
ChefB
2dozen/3minutes
Rateperhours=40dozen/hour
Ifweadd1fryerthecapacityproductionfromChefAtoChefBwillbalance.ChefAwillproduce40dozenchicken/hour,andafter addingnewfryertheChefBwillproduce40dozenchicken/hourtoo
If we add 1 new Chef, the capacity will balance
CapacityofChefAandChefBinadayarenotbalance.Ifwehire1newchef,thecapacityperdaywillbalance.ChefCwillhelpChefBtofriedthe chicken.thetotalcapacity/dayofChefA=320;ChefB+ChefC=320(balance)
After Layout
Takethechickenfrom refrigerator
Putthechickenintothe frierandFriedthe chicken
Cycletime: 1chef=20dozen/hour
Raw Chicken cooked fried chicken (WIP)
Cycletime:
ChefA=40dozen/hour 1hour/40dozen
Takechickenfromrefrigerator=
Produce40dozen/hourx8hourworkindayx1chef=320capacity/day
Fryingthechicken=
Produce20dozen/hourx8hourworkindayx2chef=320capacity/day
Thecapacitiesareroughlyequals
Currentsituation:
totaldozenthatchefAproduceinamonth=320x12=3.840dozen
totaldozenthatchefBproduceinamonth=160x12=1920dozen
totaldozenthatchefCproduceinamonth =1600x12=1920dozen
Sothetotalof3chefs=7680capacity
Ifweadd1chef,thetotalproductionwillincrease100%
Add new 1 Chef C
Putthechickenintothe frierandFriedthe chicken
Cycletime: 1chef=20dozen/hour 1/2hour=40dozen
Chef A Chef B+
Product–Process Matrix
Theproduct-processmatrix,alsoknownastheoperations processmatrix,helpsinunderstandingtherelationshipbetween thetypeofproductbeingproducedandthetypeofproduction processused.
InthecaseofKFC,afast-foodrestaurant,themostsuitable representationontheproduct-processmatrixwouldbethe "AssemblyLine"approach.
KFCoperatesusinganassemblylineapproach,characterizedby acontinuousflowofstandardizedfooditemsbeingprepared, cooked,andassembledinasequentialorder.
Explanation:
Differentcomponentsofameal(chicken,drink,friesetc.)arepreparedatdifferentstations,eachspecializinginaspecifictask (frying,grilling,etc.).
Theitemsmovedowntheline,andeachstationaddsspecificelementstotheorder,suchasfryingchicken,preparingsidedishes, andassemblingthefinalmeal.
Thisapproachallowsforahighvolumeofstandardizedproductstobeproducedefficientlyandquicklytomeetcustomerdemand.
The"AssemblyLine"approachisthemostsuitableforKFCgiventhestandardizednatureoftheirmenuitemsandthehighdemand forfastfood.Itensuresefficiency,consistency,andspeedindeliveringtheirsignatureproductstocustomers.
Break even analysis
Afterwecalculatecapacityafterweadd1newchefand1newfryer.WewanttoknowaboutBreak-evendemand oftheseinvestment.Theobjectiveisto determinetheminimumnumberofunitsthatmustbesoldinordertocoverallcostsandmakenoprofitorloss.ThisinformationcanbeusedtohelpKFCmake decisionsaboutpricing,marketing,andproduction.
Tocreateabreak-evendemandassumptionfortheoptionofKFCaddnewchefandaddnewfryerweneedtomakesomeassumptionsaboutthefixedand variablecostsassociatedwitheachoption.
Basedontheassumptionsabove,thebreak-evendemandforKFCtoadd1newchefis6.667unitsperyear,whilethebreak-evendemandforKFCto add1newfryeris3.333unitsperyear.Thismeansthataddinganewchefismoreexpensivethanaddinganewfryer.But,thebenefitsofaddingachef outweighthebenefitsofaddingafryer.AchefcanhelpKFCtoincreasedemand(chefcanpreparevarietyoffoodandcanalsocookfooditemsto order),improvecustomersatisfaction,andincreaseflexibility(achefcancreatenewmenuitems,preparefoodforspecialeventsetc)
$10.000 $2.5-$1 $5.000 $2.5-$1 = = = =
Break-even demandadd1chef Break-even demandadd1fryer Assumption Calculation Break-even Demand 6.667units 3.333units
Conclusion Proccess Analysis
Identifying and eliminating bottlenecks. Bottlenecks are the steps in the process that take the longest. By identifying and eliminating bottlenecks, KFC can reduce the cycle time and improve throughput.
Thetotalprocess1stbatchrequired33.5minutes
Throughput=29dozenchicken/8hour~ 348pcsKomboPackagein8hour
There’sbottleneckfromtakechickenfromrefrigeratortoputintothefryer.Tobalancetheprocess,weneedtoadd1
chefandadd1fryer,thetotalcapacity/daywillincrease100%
theproduct-processmatrixofKFCwouldbethe"AssemblyLine"
FromtheBreakevendemand.add1newchef=BEP6.667unitsperyear.add1newfryer=BEP3.333unitsperyear.Add chefismoreexpensive,butthedemandwillincreaseduetoproductivityincrease,improvesatisficationandhelpnew jobdesk.
HerearesomespecificexamplesofhowKFCcanuseprocessanalysistoimproveitsbusiness:
Reducethetimeittakestofulfillcustomerordersbyaddingnewchef
Improvethequalityoffood.Thiscanbedonebyimplementingaqualitycontrolprocessthatensuresthatallfoodis preparedtothesamehighstandards.
Reducefoodwaste.Thiscanbedonebyimprovingtheaccuracyofinventoryforecastsandbyusingfreshingredients.
Improvecustomersatisfaction.Thiscanbedonebyprovidingbettercustomerserviceandbyimprovingthequalityof food.
Waiting Line Simulation
KFCusewaitinganalysistomonitortheperformanceofitskitchen operationsandensurethattheyarealignedwithitsstrategiccapacity goals. KFCcusewaitinganalysistotracktheaveragewaittimefor customers.Thisinformationthenbeusedtomakeadjustmentstothe kitchenprocessasneeded.
ThroughprocessanalysisatKFC,we'vedeterminedthattheadditionof1chef effectivelybalancesthedailymenuproductioncapacityandtime.
Inourwaitinglineanalysis,weaimtoquantifytheeffectsofthecurrentsituation(no addchef)versusthenewscenario(with1extrachef) intermsofcustomerwaiting timesandorderprocessingattherestaurant.
howfoodordersflowthroughthekitchen,Averagewaitingtimeforcustomers, Averagequeuelength,Probabilityofacustomerhavingtowaitinline.
Inthissectionyou’llfind:
1.
CalculatingWaitingLinecurrentsituation
2.
CalculationWaitingLineafteradd1newchef
3.
Comparingcurrentvsnewscenario
4.
Conclusion
WaitingLineAnalysis-KFC-Singlechannel-SinglePhase
Waitinglineanalysisisamathematicaltechniqueusedtoanalyzeandmodelqueuingsystems.Itcanbeusedtounderstandhow customersflowthroughasystem,identifybottlenecks,andimprovetheefficiencyofthesystem.
InthecontextofKFCkitchenproduction,waitinglineanalysiscanbeusedtounderstandhowfoodordersflowthroughthekitchen, identifywherebottlenecksoccur,andimprovetheefficiencyofthekitchenoperation.
Asinglechannel-singlephasewaitinglinesystemisaqueuingsystemwherethereisonlyoneserver(thekitchen)andonephaseof service(preparingthefood).
Themodelcanbeusedtocalculatethefollowingmetrics:
Theaveragewaitingtimeforcustomers
Theaveragequeuelength
Theprobabilityofacustomerhavingtowaitinline
Theprobabilityofacustomerhavingtowaitlongerthanacertainamountoftime
Model Layout Service Phase Source Population Arrival Pattern Queue Discipline Service Pattern Permissiblequeue length 1 Singlechannel Single Infinite Poisson FCFS Exponential Unlimited
WaitingLineAnalysis-KFC-Singlechannel-SinglePhase
ExampleCalculationCurrent
Question:HowcanKFCimprovetheefficiencyofitskitchenoperationsandreducethewaitingtimeforcustomers?calculate
Averagewaitingtimeforcustomers,Averagequeuelength, Probabilityofacustomerhavingtowaitinline
Assumptioncurrent(2chef)
Thearrivalrateofcustomersis30customersperhour.
Averagenumberofunitswaitinginthequeue
=4customers
Theservicerateofthekitchenis45ordersperhour.
Thenumberofcustomersinthesystemis30
Theaveragewaitingtimeforcustomersinsystem
Averagetimeaunitspendsinthesystem
= = hour
=2customersinthesystemonaverage =4minutesaverage waitingtimeinsystem
waitingtimeinthesystem
Averagetimeaunitspendswaitinginthequeue
hour
=2.67minutesaverage waitingtime
Utilizationfactorforthesystem
30/45=67%thekitchenarebusy
Probabilityof0unitsinthesystem
=0.33probabilitythereare0customersin thesystem
30
45-30
45-30 1
1 15
#1
=
CurrentSituation
n
WaitingLineAnalysis-KFC-Singlechannel-SinglePhase
ExampleCalculationCurrent
Afterthat,wecalculateprobabilitykcustomersinthesystemtogetfoodfromthekitchen
Assumptioncurrent
Thearrivalrateofcustomersis 30customersperhour.
Theservicerateofthekitchenis 45ordersperhour.
Thenumberofcustomersin thesystemis30
Probabilityofmorethan0unitsinthesystem,wherenis
thenumberofunitsinthesystem
Impliesthatthereisa 19.75%chancethatmore than3customersarein thesystem
Wesawthattheprobabilityof0customerwaitnginfrontis66%,andprobability3customerwaitinqueuesystemis19.75%
n
#2
CurrentSituation
Afterwecalculatethecurrentsituation,weneedtoknowaboutwaitinganalysissaferweadd1newchef,thedifferencein servicerate=70ordersperhour(increase55%)
AssumptionNewscenario(3chef)
Thearrivalrateofcustomersis30customersperhour.
Theservicerateofthekitchenis70ordersperhour.
Averagenumberofunitswaitinginthequeue
=0.32~0customers
Thenumberofcustomersinthesystemis30
Theaveragewaitingtimeforcustomersinsystem
=1customersinthesystemonaverage
Averagetimeaunitspendsinthesystem
= hour
Averagetimeaunitspendswaitinginthequeue
waitingtimeinthesystem =
=1.5minutesaverage waitingtimeinsystem
=0.64minutesaverage waitingtime
Utilizationfactorforthesystem
30/70=43%thekitchenarebusy
Probabilityof0unitsinthesystem
=0.57probabilitythereare0customersin thesystem
30
70-30 1
70-30 1
40
n
ComparecurrentsituationVSnewscenario(Addnewchef)
Thisisthetablesummaryofcomparisonbetweencurrentvsadd1chef.Ifweadd1chef,there’spositiveimpactthat
Averagewaitingtimeinsystemdecreased(from4minutesto1.5min)->sothatthecustomercanimmediatelygetafood.
Theaveragecustomerinwaitinglineisdecreasedfrom2to1costomer,thisispositiveimpactsotheCustomersaremore likelytobesatisfiedwiththeirexperienceandKFC'sbrandimagewouldbeenhancedasabusinessthatisknownforhaving shortwaittimes.
Probabilityofmorethan0unitsinthesystem,wherenisthe numberofunitsinthesystem
Conclusion Waiting Line
To improve the efficiency of the kitchen and reduce the waiting time for customers, Here are the things they can do :
Adding1chef
Changing thewaythatfoodordersareprepared,suchaspreparingKombopackage(Chicken,rice,drink)inadvance becauseitisfavoritemenu
Implementingaqueuingsystemthatgivesprioritytocustomerswhohaveorderedmorecomplexortime-consumingmenus
Theimpactofadd1newchef:Averagewaitingtimeinsystemdecreased(4minutesto1.5min),averagecustomerinwaitingline isdecreasedfrom2to1cust.
In1day(8hours),KFCcanreduce487minutesofcustomerwaitingtimeinlineperday
Positive impacts of add 1 chef to decrease waiting time
Increased Customer Satisfication
Customers are satisfied with their experience if they don't have to wait a long time in line.
Increased sales
Customers who are satisfied with their experience are more likely to return and make repeat purchases
Employees happiness
Employees are more likely to be happy and productive if they are not constantly rushed and stressed
KFC's brand image
Business that is known for having short wait times.
Overall Conclusion analysis of KFC
Background
KFC'sComboPackagemenuis expectedtoincrease significantlyoverthenextthree years(YoYincrease10%),the impacttoconsiderare:
Capacitymanagementto meetdemand
Bottleneckinthekitchen processanalysis
Waitingtimeimpactto accomodatedemand
Themanagementhasoptionto hirenewcheforbuynewfryer tofulfillthedemand.
Strategic Capacity Management
Proccess Analysis
Wedeterminetheprocessofkitchenfor making1Combopackagechicken.
Afterweknowthedemandof ComboPacakgewillincrease, First,wemakeflowchartandstepof activitiesfromordercamein-fryingthe chicken-packaging-orderclose
then,weanalysisthesales growthfornext3years (increased10%YoY)
KFCinyear2&3willgoingto beovercapacity(106%and 122%utilizationrate)
Totackletheissue,thereare3 strategiestoconsider:Add newchef,buynewfryer,and addnewcashier.
Then,Wecalculatethedecision treetoknowthehighestvalue ofeachoption
Theconclusionis:Addinga chefisisthehighestexpected value,withanexpectedvalue of$356,000.Thisofthethree optionsthatleadtobestoption forfuture.
Thetotalprocess1stbatchrequired33.5 minutes
Throughput=348KomboPackage/8 hour~10.440pcs/month
Thevalue=$26.100/month
There’sbottleneckprocessfromtake chickenfromrefrigeratortoputintothe fryer.Tobalancetheprocess,weneedto add1chefandadd1fryer,thetotal capacity/daywillincrease100%
TheBEPforadd1newchef6.667unitsper year.add1newfryer=BEP3.333unitsper year(Addchefismoreexpensive,butthe demandwillincreaseduetoproductivity increase)
Wechoosetoaddnewcheftobalancing theprocess,Reducethecustomertime, improvequalityoffood
Waiting Line
ThroughprocessanalysisatKFC, we 'vedeterminedthattheaddition of1chefeffectivelybalancesthe production.Then,Weanalyze waitinglineofcurrentsituationvs newscenario(+1chef)intermsof customerwaitingtimesandorder processingattherestaurant.
Theimpactofadd1newchef: Averagewaitingtimeinsystem decreased(4minutesto1.5min), averagecustomerinwaitinglineis decreasedfrom2to1cust.
In1day(8hours),KFCcanreduce 487minutesofcustomerwaiting timeinlineperday thisispositiveimpactsothe
Customersaremorelikelytobe satisfiedwiththeirexperienceand KFC'sbrandimagewouldbe enhancedasabusinessthatis knownforhavingshortwaittimes.
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