Synopsis of the Case
At the ‘Jose Authentic Mexican Restaurant’ the changing of situation is the cause for concern for the management and requires in depth considerations. It’s a small busy restaurant apparently counted on for delivering good satisfactory services but now in recent days falling a bit to stand up to the expectations. The restaurant is an authentic Mexican restaurant representing all the true Mexican restaurant traditions along with Mexican and some of the Spanish touches in them. The restaurant’s success lies in some of the competitive advantages like its uniqueness, the location, low cost employees like struggling students, and their inner strengths like the inter-employee relationship, the customer-employee relationship, the relationship with the suppliers, etc. And it counts its success in customer satisfaction which is the core point of concentration for any business. But in recent days the fall of customer satisfaction has become a cause for real concern for both the management and for the employees which has been resulted from some substantial reasons like inconsistent quality of supplies, discontented employees, inconsistency of services regarding time and attention. Both the management and the employees are concerned about the declining customer satisfaction in recent days and both parties are pondering over the situation from their very own positions as the management decided to take some initiatives to improve their services to obtain maximum customer satisfaction and also the employees individually thinking about their roles to chip in in overcoming the recent fall off and to retain and improve the quality of services.
Major Issues Discussed
A few strategic issues have been focused here:
Quality Issues:
The very own intrinsic characteristic of the restaurant for which it used to succeed in gaining customer satisfaction, and now some areas particularly supply system where they are experiencing some defects or flaws in operation and thus variances in providing the customers with optimal services for which their customer service acquisition is on a point of bother.
Costs of Poor Quality:
The issues where the internal management processes in the restaurant are failing to deliver and so facing the risk of losing customer satisfaction resulting possible loss in business, and so now have to spend in relation to retain and improve the over all quality of the services in the restaurant to enjoy competitive advantage and to meet customers’ needs and wants and thus ultimate customer satisfaction. The costs will be both of conformance, like prevention costs and appraisal costs, and also non-conformance costs, like internal failure cost and external failure costs.
Quality Management:
The core point of all concentration for the restaurant is quality management, and it has to be dealt with taking three important issues like quality control, quality assurance and quality improvement into account. Here for the restaurant the issue of quality refers both to the products, that is food, and also service that they provide the customer with. So the management process will be all inclusive and it will cover all from the supply of goods and till the very end like the after sales services.
Supply Issues:
Supply issue is crucial here in the case of this restaurant. The restaurant is facing a kind of risk for the poor and inconsistent quality of supply, for without good and consistent quality of supply of goods they cannot provide the customers with quality food and in reasonable time. And also the issue can be stretched as far as to say foods prepared from poor quality of supply goods can be unhealthy and unsafe for the customers.
Answers to the Questions:
Q. How should quality be defined at this restaurant?
When we talk about quality, degrees of excellence, capacity, skill, accomplishment, status, standing, positive or negative logics, distinctive features, overall control, those sort of ideas occur to our mind. According to Bergman and Klefsjo (1994) “the quality of a product (article or service) is its ability to satisfy the needs and expectations of the customers”*1. And as ISO 8402/ISO 9000 suggest, “quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs”*1. At Jose’s restaurant the quality of the services are mainly based on its authenticity, its excellent unique features that represent true Mexican theme and style, its capacity of offering broad range of Mexican foods being a 58 seats small restaurant and they offer 23 main entries in their menu which are assembled from only 8 basic stocks and a variety of ingredients, the employees are skilful where they know their individual roles and the order of actions in the way of performing their roles to deliver optimal performance in the reasonably minimum time, the accomplishment of the environment including the set of the furnitures and the background music which would give the customers the flair of True Mexico even in a mature business district on the edge of a large metropolitan area in a place like New England. Here, apart from the recent days the quality of service at this restaurant could be said acceptable on the basis that this restaurant had been well able to satisfy the needs and expectations of the customers for which it is usually busy and too busy on particularly Fridays and Saturdays, even the customers would not mind standing outside and wait until their party is called inside. This restaurant used to be counted on for the consistent good quality foods in reasonably consistent time and for its adherence to its set traditions, its unique culture, theme and style.
Different Gurus of quality defined quality in their very own ways. We can define the existing quality at the Jose’s restaurant under the light of their conceptions of quality.
While discussing quality Walter A. Shewhart (1891-1967) emphasised more on reliability of the equipments and the variations issues than anything else. In his research on quality he found randomness and recognised variability are existent in all kinds of manufacturing processes. And so according to him to improve quality those randomness and variability should be reduced to an optimal level in all manufacturing processes. At Jose the customer satisfaction level was acceptable and satisfactory when the supply standard used to be good and when the variation in delivering customer service was at a reasonably minimum level. But it started to create a bit of problem and started to lose the quality of their service only when the supply was not of an acceptable standard and there appeared some unacceptable variance in terms of delivering consistent services.
W. Edwards Deming (1900-1993) known as the father of quality, and all his life he contributed his services in improving quality. He set 14 points principles which he believes are the foundations of achieving optimal quality improvement, and in achieving this optimal quality improvement he emphasised most on the role of the management in an organization. In his research on quality he found only 15% of poor quality is because of the employees and the major 85% of poor quality is because of the inefficiency and ineffectiveness of the management system and processes in an organization. At Jose restaurant the waiters can serve their best if they are given good quality foods to serve the customers, and the chef can make good quality food if he is provided with good quality supplies. And it has to be the management system for the restaurant to make sure the supplies are of acceptable quality and on time. And also it is the management system at this restaurant that has to make sure the other issues are being efficiently dealt with- like the seat management, waiting and reservation issues, and the pick times have to be considered as well to ensure consistent satisfactory quality services.
Joseph M. Juran (1904-*) known as the architect of quality, defines quality on the basis of fitness for use rather than submission to specifications. In his conception of quality the core point of his attention was customers’ needs, and so he is more concerned with quality planning, quality control and quality improvement, rather than following set standards of quality. Under the light of Juran’s conception of quality the management in Jose’s restaurant needs to plan and re-plan their processes as they are clearly failing to meet the consistency level of quality. The restaurant is busy and good but the bar of standard of the quality of their services is much below their actual potentials.
According to Dr. Genichi Taguchi (1924-*) design is the most important aspect in the management system of an organization as he says 80% of all defects are because of poor design of processes. Here in Jose’s restaurant’s case we too can see that the main source of poor quality in services resulted from bad quality of supplies and this is the design in management process which is responsible for this.
Armand V. Feigenbaum is more interested in working environment, and while referring to quality he seems to suggest that an organization has to focus on quality development more than anything else. And, to add with, the degree of commitment and motivation of the employees is crucial to ensure a sound and profitable working environment. At Jose’s restaurant the quality of environment is good and bad at the same time, as the atmosphere is more or less unique, but its being small and incapability to serve more customers due to insufficient number of seats, particularly on Fridays and Saturdays, and waiting facilities for the customers are almost disregarded. But taking the example of Karetski who is a member of the staff we get the impression that the employees are more or less committed and motivated from their part to offer the possible best quickest service. Having said that the example of the cook’s being irritated and impatient in recent time gives us the impression of the opposite extreme.
Philip B. Crosby (1926-2001) is rather traditional in his way of approaching quality issues. He also focused mainly on customers’ needs and defines quality as the total submission to standards expected by the customers and also standards set by the organization itself. At Jose’s restaurant we get the impression that a few standards of quality are met by the management while a few are not. Even the survey conducted by the management clearly says that the customers are more or less happy with the services and they enjoy coming to this restaurant expecting quality foods and overall satisfactory services. But they are not happy when they have to wait for longer time and they do not have a reasonable arrangement to wait around the restaurant and no arrangement for reservations earlier either, which of course demeans the overall quality of the management.
Q. What are the restaurant’s costs of poor quality?
Cost of quality is an important issue as growth and return is crucial for any commercial organization. This cost relates to the expenses to cover for efforts delivered for quality assertion and also in cases deficiencies. Jose’s restaurant is now facing some problems with quality issues and is likely to be paying for their inability to maintain a satisfactory and consistent level of quality of services. In the case of Jose’s restaurant the poor quality of services arises from inefficient and ineffective management system.
There are four major costs of quality and Jose’s restaurant has to pay for all these four costs of poor quality as they are failing to meet the customers’ needs, facing an alarming fall off of customer satisfaction, and over all for their defective management processes.
First Jose’s restaurant will have to face a cost concerning control, that is, prevention costs, as they would try to prevent defects before they even happen. They would think about spending on redesigning their internal and over all management processes where they would have special attention to supply chain and deliverance of performances. They would spend in planning to ascertain a expected level of quality. They have already conducted a survey, they may think about spending even more in conducting more surveys and getting more statistics. They may also think about redesigning their offers in terms of foods that would be simpler and would take shorter time to be prepared and other facilities like hassle free satisfactory waiting space and may be also prior reservation facilities. They may also think about investing in getting their staff efficient and effective training to get the best performance out of them. Last but not the least, they have to make a better mutual understanding and conformance with the suppliers to make sure the suppliers are supplying goods of best quality and with a very high level of consistency. So Jose’s restaurant has to invest time, effort and money in all these areas to prevent defect before it happens.
Then Jose’s restaurant will have to face another cost regarding control, and that is appraisal costs. As we already know the management conducted a survey, and both the management and the staff are spending much in thinking things through and through. Sometimes they are spending time and efforts in inspecting the purchased goods from the suppliers, then other times they are inspecting, testing, and continuously checking other areas of services. They also have to spend money in things like inspection setup, testing measures, quality audits, etc.
As, in recent times, Jose restaurant is failing to stand up to the expectation, so their costs of failure of control is more worthwhile to be discussed. First we can focus on their internal failure costs. Say for example, because of poor quality of supplies, the food preparation is hampered. The quality of the food is not of best quality, which will dissuade the customer to come back to the restaurant ever again, and also, in cases, it takes extra time to prepare the food, like, which would take 12 minutes in an average now takes 20 minutes or so. So, mathematically, while with satisfactory supplies of goods they can serve 5 customers in an hour, but because of poor quality supplies they can serve only 3 customers in the same amount of time. And less customers means less profit, loss in business. They may also have to think about spending in increasing the space for the restaurant for they can accommodate more customers, and expectedly they can provide the waiting customers a decent place to wait in.
Jose’s restaurant will have to face another cost of failure of control, that is external. External control failures include complaints, services, liabilities, recalls and most importantly reputation, particularly in case of Jose’s restaurant. Here the dissatisfaction of the customers is the main issue in focus. A restaurant business is a relationship business and it heavily relies on customer satisfaction. And a dissatisfied customer would not like to come to the restaurant ever again. And from this dissatisfied customer’s feedback about the restaurant other people would feel indifferent to come and to be served in this restaurant. In recent days. the way customers are getting more or less dissatisfied with the services and with other facilities, Jose’s restaurant will have to pay handy for the loss now and more in the long run as well.
However the aspiration for higher quality will ask for higher costs anyway. And it is more or less the same for each and every commercial organization. Jose’s restaurant has to face all these costs of poor quality and they will have to act promptly to the situation, else they will have to face even greater losses, as making, retaining and holding good reputation of satisfactory services for a restaurant business is a big thing.
Q. Use some of the tools for improving quality to assess the situation at José’s.
As I already discussed, Jose’s restaurant facing problems with quality issues and now has to pay costs for poor quality in the restaurant. Now, in this part I will pay attention to quality improvement issues and will try to analyse and relate some of the tools for improving quality to assess the existent and potential situations at Jose’s restaurant.
First of all, I would like to relate and analyze the situation at Jose’s restaurant under the light of the business philosophy of Total Quality Management as it adds value to the product or service for any organization and gives the organization substantial competitive advantage. According to this philosophy the actual quality of an organization relies on the participation and commitment of both individual employee and the whole management collectively from the very outset of designing the organizational processes till the very end of after sales services, and the responsibilities towards quality issues at every stage are same and crucial for both the employees individually and for the over all management personnel. To improve the level of quality at Jose restaurant all the employees and the management will have to be submitted and committed in the first place. They have to mark their very own contribution both individually and collectively to the improvement of quality, so the level of commitment and motivation is important. Here, in this case, we have come to know that the supplier is not supplying quality goods consistently, without which the cook can not prepare quality foods, and so the restaurant staffs are failing to provide the customers with best services and failing to gain desired customers’ satisfaction. So the suppliers will have to be maximally consistent in supplying quality goods consistently and they will have to realize their commitment showing required respect for the contracted services or whatever, the cook will have to try his level best to prepare possible best quality foods with whatever resources he gets, and the waiting staffs will have to carry out the rest of the serving responsibilities. The management will have to design plans and processes from the very beginning that really work and deliver in business situations and cause minimal errors, and they will also have to continually check and audit those plans and processes and their applications for if and when there will be any need for changes or adjustments. At Jose’s restaurant it is pretty evident to notice that the supply chain is a note of failure in the system for the restaurant, so it needs to be dealt with. However, the diagram below shows how the philosophy of Total Quality Management works in an organization:
In this case customer satisfaction is of course the core of all concentration. Then in the second phase it comes to employee involvement and continuous improvement. So to ensure the possible best quality within the restaurant all the management personnel and all the other staffs including the suppliers, the cooks, the receptionist, and of course the waiting staffs, all of them will have to involve themselves in the whole process being utmost committed and motivated. And there will be a need for continuous improvement to meet the needs and wants of the customers and thus to get the competitive advantage. So the management at the Jose’s restaurant has to operate their business redirecting their ways and paying heed to some important issues like- the management should not be hierarchical and should consult with the other staffs about everything big or small, all the members of the staffs should be given equal opportunities to make decisions and to take initiatives if and when necessary in all stages of the processes, the staff members will have to be efficiently and effectively trained to know and to actualize the mission and the business philosophy of this particular restaurant, the communication between the staff members and the management and also the communication with the suppliers will have to be a lot smoother and more accessible, the commitment and total submission to quality have to be actualized by actions and way of doing things is such a way that the customers can see, feel and appreciate them, the management bodies will have to set good examples of leadership and will have to ensure a very high level of sense of belonging among all the staffs, etc. Only in the third phase they will consider issues like process design, purchasing, benchmarking, problem-solving, and service and product design. They also have to have clear knowledge of compliance to specifications, ensured value for the product and services they are offering to the customers, the continuous checks and re-checks on whether their products and services can meet the expectations of the customers, over all support from the part of the restaur111ant management and the staffs, and importantly they will have to make a good positive psychological impression about their restaurant in the mind of the customers for they feel like coming back to the restaurant over and over again and also recommend this restaurant to other people as well. In all cases the management will have to ensure involvement from the other staffs, and they will have to keep pushing the bar of standard of quality higher and higher continuously.
Kaoru Ishikawa, another guru of quality, holds making scientific and technical statistics and pondering over issues with problems and issues with the probable solutions of those problems are most important when it comes to retain quality and further improvement of that retained quality. So, in his suggested process, collecting and presenting good dependable data is important in the first place, for it will allow the think-tank to analyze and prioritize the areas of defects and to define and determine the processes and procedures to be undertaken further analyzing cause-and-effect issues from those collected and presented data, as this process can be used as a useful tool for finding, comparing, contrasting, differentiating, sorting out, documenting the various causes of quality variances. At Jose’s restaurant the management already conducted a survey on apparently 83 people on a Friday and then Saturday during the evening meal time and collected some data. Now all they have to do is to present those data in a systematic process using preferably Pareto chart and diagram, or using any other tool to analyze those data communicating with the staffs and sharing thoughts and views with them to denote the areas of defects and to prioritise the areas to work on to retain and improve the over all quality of the restaurant’s offers and services.
They can also adopt the Six Sigma strategy which is a business management strategy that seeks to improve the quality of process output. In a simplified way of putting it, the six sigma improvement model functions the following way:
Using this process they can denote and then eliminate all possible errors or defects and thus effectively minimize variances in implementing processes and thus delivering optimal quality services. While following the methodology of six sigma as a tool to improve the quality of the over all service in the restaurant the management will have to first plan their strategy and then they will have to implement that strategy within the restaurant. And once the strategy is implemented they will have to check and re-check, and if necessary make frequent audits whether the undertaken strategy is delivering expected outputs meaning if it is working in its way ahead to improve the over all quality of the services in the restaurant.
Conclusion
In fine, it can be well said that Jose used to be well successful in providing the customers with good services, somewhat because of some competitive advantages his restaurant is privileged with and for its uniqueness and such, but when they are falling from their standard to gain optimal customer satisfaction they are thinking it through and taking initiatives to act to the situation promptly.