The Operations Management Strategy Of Hard Rock and roll Cafe Business Essay

Operations management (OM) are activities that relate to the creation of goods and services through the transformation of inputs to outputs. This essay is to critically measure the OM strategy of Hard Rock and roll Cafe (HRC) about the ten major required OM decisions of functions managers, explained in the Principles of Operations Management - Heizer and Render, Pearson Global Eighth Release.

Design of goods and services: The merchandise design may make reference to the improvement of the existing products or to the development of new products. The product design strategies need to adjust to the product life pattern for minimizing the costs and maximizing the profits. The rules of innovation will need to be systematically applied in product design techniques for business success. The designed products have to meet the following requirements: response to the customers' needs in term of quality, size, shade and layout, the designed items should be workable and profitable when they are put into development.

In its 39 years of existence, HRC is continuing to grow from a modest London pub to a global power, taking care of 129 cafes, 12 hotels/casinos, live music locations, and huge twelve-monthly Rockfest concert in 40 different countries, offering 100, 000 meals each day. The writer thinks that product design is contributing to this impressive success report of HRC. Once we can see from the case materials, HRC always detects for reliable suppliers for quality products and promptly services, the products at HRC have been being designed with its typical red color and create value by means of good food and entertainment. All of the products are designed, tested before putting them into development; the production will only be processed if the elements are available from trained suppliers.

From its website and circumstance materials, we see that HRC has designed different selections for different restaurants; additionally it is updating the menu from its typical American foods to higher quality products. These are key success factors to the food and beverage business, because the people' style differs.

HRC applies the product principle in it product design, the customers come to HRC not only because of its cafe' quality, but a dining event not duplicated somewhere else on the globe, with a lot of different experience, including its style, its entertainment, its service' attitude, its valuable memorabilia' bits, its friendly atmosphere, all these smartly designed products are being viewed at HRC for its differentiation. The core value of HRC is "Love all - Serve all" has been designed and put on all staffs, who are providing warmest reception and thoughtful service to all customers.

Managing quality: For just about any business that gets the franchise and products business, the management quality is key success factor; the customers choose the business right or goods because of the widely recognised quality of the product/service. The success franchise account of HRC with around 70 franchised restaurants all over the world and 48% of a typical cafe's sales from merchandise confirms the quality of its good and service.

From the situation materials, we see that HRC is putting the quality management of its food and service on its top concerns, HRC is improving their food and service to support the changing preferences through its studies on regular basis, if customers do not give the highest credit score to its food and service, HRC considers its business as a failure.

Food safe practices and cleanliness are also key success factors for business in drink and food, in its 39 years of living, HRC is offering more than 100, 000 foods each day, but there is certainly any reported food poisoning circumstance related to HRC. I were very impressed with the enthusiastic and healthy staffs, the red colour and the sanitation when I seen HRC in HCMC in 2009 2009, all these feature are seen as a requirements of product quality of HRC.

Process and capacity design: An activity strategy is an organization's approach to transforming resources into goods and services. The aim of a process strategy is to build a production process that meets the client requirements and product requirements within cost and other managerial constraint. The process determined will have a permanent influence on efficiency and success of creation, as well as on cost and quality of the products produced.

In case of HRC, the business is using the procedure concentrate, because food would be produced with low-volume and high-variety to meet up with the requirements of food security and of customer' taste. From the circumstance materials, we see that the procedure and capacity method alongside the Microsoft Job planning and managing tool operated in HRC are allowing the organisation to serve more than 100, 000 enthusiastic followers in big situations such as Hard Rock Live Concerts, Annual Rockfests, despite having surprised circumstances.

We note that HRC also uses its forecast results to its process and capacity design, it uses long-range forecasting in setting a capacity plan, intermediate-term forecasting for locking in deals for leather and goods, and short-term sales forecasts in placing your order foods. The forecast system in HRC works successfully and helps the cafe professionals to effectively operate the business, including employee scheduling, bonus environment and menu planning.

Location strategy: Along with the fast globalization of business and the federal government phone calls and preferential to international direct assets, and agreed upon free trade agreements, internet marketers have a whole lot of choice for location with their business. The decision on location of business will need to take accounts of PESTLE (political, economic, social, technical, legal and environment) research as well as recruiting, wages, currency policies, recycleables, real estate. The aim of location strategy is to increase the advantage of location to the company.

From the situation materials, we see that HRC places much serious work into its location analysis, for example, HRC spent 3 years of progress for prep its restaurant in Moscow. HRC uses Hard Rock' Standard Market Statement for just offshore sites with specific analysis of developments in demographic, visitor market, of vehicles, restaurants and nightclubs, political risks, market and of HRC comparable market analysis, currency, sociable norms and possibility of brand development. It also uses the break in the action even analysis to select the investment' options for its facility. The primary value of HRC with "Ensure the permanent expansion and success of the organisation", has been strictly respected in it location strategy, for any location decision, HRC requests for at least 10-15 year commitment.

HRC always select the cities of tourists, for example, the Orlando founded head quarter is a global City, the home of Walt Disney World, with each year around 52 million guests, Moscow is the town of millionaires, Bogota is the centre of artwork, culture in South America, Venice where guests are just a bit bigger than resident individuals, Bangkok, Beijing, Hong Kong and Ho Chi Minh (HCM) City are most visited locations in AsiaThe collection of a particular site within the picked city is also part of location strategy, HRC has located it first cafe in HCM City at 53 Le Duan Streets, this is the street of visitors and business people.

Layout strategy: A higher relevant design strategy will create an organisation's competitiveness priorities in regard to capacity, process, and flexibility, and cost, quality of work life, customer contact, and different image.

From the HRC' case materials and its own website, we see that HRC is the owner of productive kitchen layouts, encouraged personnel, tight program, and the right ingredients at the right place, the shown Hard Rock Worth "Love all - Serve all" at the access, those efficient structure strategies please its customers.

HRC uses its typical red coloring in banner, custom logo, website, restaurant and pub layout, as well as light and sound system, screens, rock and roll and new music, a huge investment in rock and roll 'n' move memorabilia and retail bars, all these layout strategies help customers to differentiate easily HRC with other restaurants and make HRC' brand recognised at 92% as one of the highest in the world. HRC in addition has developed a website for its communication and structure strategy.

Human resources, job design and work measurement: The greatest asset of an business is not its building, its equipment, its inventory or profile receivable. It's the employees. Employing the right person for the right job with reasonable working conditions are tips for success. The aim of a human tool strategy is to manage labour and design job so people are effectively and proficiently utilized. Mutual dedication and shared trust between managers and employees help to establish constructive commercial relations for high productivity and competitive benefit in business. Good staffing plans with appropriate work rules, pay programs, fringe benefits, and working conditions are key success factors of human reference strategy.

From the truth materials of HRC, we think that HRC is rolling out an excellent individual learning resource (HR) strategy, its HR team gives priorities to applicants who have job skills, bright, good attitude, self motivation, who are interested in music, who wish to serve peoples and finally who can express the HRC' experience to customers. The training division provides two days orientation training to all new staff and other follow-up couching classes that help their employees develop both professionally and properly.

The Hard Rock and roll core principles are being unveiled to all new staffs and put on all employees; these ideals encourage the innovation, creativity, self motivation, productivity of all employees. HRC requests their employees to protect the planet and also to practice integrity, integrity and professionalism; these activities ensure the permanent growth and success of HRC.

HRC is building an company' culture where people are able to fully enjoy their work, where in fact the substantial variety and personality are accepted. HRC applies excellent pay and benefits and help in the part-timers with only 19 hours per week. Especially HRC encourages a high level of internal marketing promotions with some 60% of the professionals are promoted from hourly worker ranks. The initial culture and work place at HRC plays a part in the reduced turnover of hourly people and encourage the candidates from potential talents surrounding the world.

However, we do not see obviously from the truth materials what strategies HRC pertains to measure the performance of their employee, the writer believes a results-based performance evaluation system will be a good method and tool to staff' performance monitoring and analyzing at HRC, each staff will continue to work with the supervisor to agree on a list of key results, these results may have both personal results and organizational results that the staff has to achieve within the given time. The results much be SMART (specific, measurable, possible, genuine and with a period bound) and be reviewed and up to date and evaluated, ensuring the productivity and personal development of worker and development of HRC.

Supply chain management: Supply string management is the integration of the activities that procure materials and services, transform them into immediate goods and final products, and deliver them to customers. These activities include purchasing and outsourcing activities. The objective is to create a string of suppliers that focuses on making the most of value to the best customer. Strategies of low cost, rapid response, stable quality and volume are key success factors of supply string management.

For the food-service business in HRC, the management of suppliers is top matter of OM managers, because HRC will need high quality products (chicken, pork, beef, eggs, materials) and change them into fresh and high quality foods and merchandise with appropriate preference to its demanding customers. The food basic safety, and freshness and quick response are main requirements for collection of suppliers. We see clearly from the situation materials that HRC considers the high need for selection of suppliers, the menu items are only put into creation if the substances are available from trained suppliers. When HRC opened in Moscow, it ended 3 years of advance prep of the Russian supply string.

However, we don't have much information from the truth materials about the strategies that HRC pertains to manage supply chain risk, ensuring the food safety in all its restaurants. The author thinks that several procedures that help HRC manage effectively and successfully the supply-chain risk may include the standard and wonder monitoring sessions to suppliers, the third-party audits on supplier process and logistic or the development of few but exceptional suppliers who will provide the least expensive costs and highest quality. Long term collaboration development, vertical integration with suppliers is also good ways of manage supply-chain risk. HRC may want to develop and signal long term relationship agreements with suppliers or producers' groupings, agricultural cooperatives because of its supply chain.

HRC could also conduct value chain research of its major string (chicken breast, eggs) from producer-trader-wholesaler-retailer-consumer to recognize the opportunities for value chain upgrade and improvement, and to ensure the cost and competitive benefit of the organisation.

Inventory materials requirements planning, and simply with time (JIT): inventory is one of the most expensive assets of many companies, representing just as much as 50% of total invested capital. A good inventory management helps the company to reduce costs and take care of efficiently the production. The objective of inventory management is to affect a balance between inventory investment and customer support. The firms must carefully control critical items, keep correct records, matter inventory regularly, and steer clear of theft and harm.

For food and drink service business in HRC, the inventory is very important to make sure that all the meals and refreshments and goods do not surpass the expiry time frame, HRC always have available fresh substances, foods, refreshments and products to provide its customers on time. HRC is investing a huge amount ($40 million) to its memorabilia' bits and most are the unique & most expensive pieces on the planet such as: Clapton's sterling silver suit from 1969, Sting's Fender Accuracy Bass used in the 2001, guitar worn and utilized by Guns N' Roses' electric guitar from early 90s, Madonna's bustier from 1990, guitar owned by Making love Pistols' guitarist Glen Matlock from 1970s, and harpsichord utilized by The Beatles from 1967. It really is for certain that HRC must carefully control these valuable parts, keep accurate files, count up inventory regularly, keeping away from theft and destruction for its exhibition' goal.

Intermediate and short-term scheduling: Good arranging means lower costs and faster and much more dependable delivery. For HRC' businesses, both capacity planning, twelve-monthly scheduling and short-term scheduling are very important. HRC' OM managers have to be sure that they will have in a position and available staffs to serve its customers on time for daily businesses and important periodical happenings. HRC' OM managers have developed proper schedules, ensuring the effective and reliable management and the turnover of employees. HRC takes into consideration of sales, priorities, short-term sales trends, annual sales forecasts, arriving big events close by the restaurant and seasonality to build up its schedules. HRC managers also look at the seniority of employees in filling the daily plan; this is very importance, because seniors have experience, the more senior the employees are, a lot more they produce earnings.

Maintenance: Quality and control are secrets to success. HRC has a whole lot of instruments and furniture because of its businesses, especially HRC has many priciest bits of memorabilia and needs to have a proper maintenance of the valuable portions. HRC also does indeed regular menu review and customer' review to update and improve its foods and beverages.

Other Sources:

Heizer and Render, Ideas of Functions Management - Pearson Global Eighth Edition, web page 56, 57, 83, 222, 346, 452, 453, 616

Assignment question 2. Discuss the OM troubles and opportunities for HRC when considering an development of its business into Hanoi.

PESTLE (political, economic, social, technical, legal and environment) and other related business permitting factors research.

PESTLE'elements

Challenges

Opportunities

Political

Vietnam is a combined economy (private, international and state-controlled companies) and authorities still plays a large role in planning and governing;

Many countries do not understand the market current economic climate for Vietnam yet;

Vietnam has a very good political steadiness and Hanoi is the City for Peace recognized by UNESCO;

There is good attitude and strong aids from administration and areas to foreign purchases;

Economic

The inflation is quite high (12%), but manageable;

Poverty is declining (from 22% in 2005 to 9, 45% in 2010 2010);

High stable rate of financial growth (7-8% each year);

Social

Vietnamese love avenue foods and beverages;

Young peoples become more vibrant and love stylish restaurants and cafes;

Visitors is increasing within the last ten yr and annually around 4 million site visitors in Hanoi

Technical

Power shortage is now very current with increasing demand;

Internet is widely accessible and sensible price;

Legal

The implementation of Laws is a genuine challenge due to poor quality of human source and corruption issues (116/178 ranked countries);

Strict guidelines to bar and nightclub'business (close time is 11:30 PM);

Available Enterprise Legislations, Investment Law and other global and regional contracts (WTO, ASEAN, APEC);

Environment

Traffic jam is a problem in Hanoi;

Hanoi has 1000 years with a lot of investment to infrastructure for travel and leisure development;

Human resources

Vietnam killed labor force for service's industry is low;

Around 1 million new entrants to labor market every year;

Wages

Wages in food-service business is not appealing to young talents;

Values of HRC may be appealing to Vietnamese young abilities;

Currency policies

The management of exchange rate is not adaptable;

The low value of Dong compare to Euro and USD is good to transfer goods;

Raw materials

Climate change influences to agricultural production;

Foods safeness is a significant issue due to uncontrollable development processes;

Vietnam can be an agricultural country, 60% labours work in agriculture, forestry and aquaculture;

Rice, aquatic products, caffeine, vegetables, cashew nuts, pepper and tea are major exported components of Vietnam

Real estate

High fluctuation of price in recent years;

Supply'source is increasing, but price is high due to high price of constructions, materials and interest rate.

Available land legislations and real estate business law;

Real estate market has closely connected to yellow metal and stock market segments.

Operations Management (OM) strategies analysis

OM decisions

Suggested OM decision'strategies to HRC for enlargement of its business into Hanoi

Design of goods and services

The Hanoi'culinary specialties and its own ale are always highly appreciated by guests and resident peoples, HRC will need to review the eating and drinking alcohol culture in Hanoi to design its goods and services.

It is suggested to create two sorts of food/drink products to two sets of customers, including european stylist products to local youths and internet marketers and Hanoi'improved specialties to tourists.

Its entertainment, its service'attitude, memorabilia'displays and enthusiastic atmosphere and the main value of "Love all - Help all"will need to be strengthened.

Managing quality

Food security is a significant issue in Vietnam, especially in Hanoi and HCM city, corresponding to the official announcement of WHO in 2007, there are annually 8 thousand reported food poisoning situations in Vietnam, the truth is this figure signifies only 1% of the full total, this is basically because of the use of uncontrollable pesticide in agriculture.

The local dealers are able to provide fresh and cheap local raw agricultural products for competitive benefit, but they are not sure of long term agreement based businesses yet, HRC will need to carefully manage the quality of local products, steering clear of food poisoning issues.

The implementation of laws and regulations on quality management and control continues to be weakened, counterfeit and imitation are wide-spread in Vietnam. Special anti-imitation methods to its products with high technology will need to be followed in design of goods. Goods is only exhibited and bought from at approved retail bars.

Process and capacity design

HRC will need to adopt process target to its process and capacity'design, almost all of active peoples in Hanoi have lunches in cafe-fast food, employee and menu planning lunch time is vital.

Vietnamese organizations and individuals usually plan impromptu functions or people to rejoice an organisation'and personal occasions, such as new 12 months, women day, labour day, birthday, new carin pubs, cafe with colleagues and friends. Peoples are not sure of pre-booking methods and HRC should be pro-active in doing consistent surveys and forecast of prospective customers for process and capacity'design.

Location Strategy

HRC should evidently identify its targeted customers for the selection of a particular site within Hanoi. Actually, Hanoi is the owner of 3. 324, 92 kilometres†, but it will be enlarged to 13. 436 km2 in 2020 (typically to South-West and North-West).

If HRC will aim for visitors, a niche site in Old One fourth is a good place, If HRC would like to serve young skills and entrepreneurs, a site in the South-West, where living the rich peoples, and seeking the national stadium, countrywide conference centres, is better.

Real property market in Hanoi doesn't work with market rules, credited to speculation and problem, the marketing price is much higher than the true price. HRC may choose to use the respite even examination to its investment'decisions of center.

Layout strategy

HRC will need to improve their designed designs that help customers to differentiate easily HRC with other famous cafe bands in Vietnam.

Human Resource

According to the ILO and Basic Division of Vocational Training in Vietnam, there are around 1 million new entrants into labour market every year in Vietnam, however they are not well trained to service-business, working willpower and to entrepreneurship, because vocational trained in Vietnam isn't prioritizing these subject matter in training curricula.

In addition to orientation training and follow up training of HRC'business principles and procedures to its employees, HRC will need to provide training on self-discipline and entrepreneurship to employees and prepare them working productively in enterprise.

Supply string management

Currently, many international organisations such as Care and attention international, World Perspective, ADB, WB, UN businessesare assisting the rural poor to create safe agricultural products for better market involvement through the helps to the creation and procedure of farmer's groupings, agricultural cooperatives, and rural companies. It's advocated to HRC to cooperate with these organisations to develop and manage the local suppliers; this will help HRC in a single hand approaching the actual customers from these organisations, and in the other side, adding to poverty decrease and communal responsibility in Vietnam for support from Federal.

One other strategy is to develop vertical cooperation with few but exceptional local suppliers and also to perform regular and delight appointments and third-party audits to manage the supply string hazards such as food safety.

Inventory and JIT

Vietnamese are not familiar with long waiting amount of time in restaurants; the quick service is key success factor that HRC should consider for its services.

Short term scheduling

As mentioned previously, HRC will need to well schedule its employees for lunch'time and to have available employees for impromptu parties. Forecast of sales and regular research are good practices to Short term scheduling.

Maintenance

Hanoi has a very damp environment, the maintenance of its furniture and memorabilia'pieces are extremely important to avoid destruction.

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