THE PROJECT REPORT about OPERATION MANAGEMENT COMPANY THE COFFEE HOUSE

THE PROJECT REPORT About OPERATION MANAGEMENT COMPANY: THE COFFEE HOUSE ● Lecturer: Ph.D Tran Cong Thanh ● Name group: Group ● Project name: The operation management of The Coffee house Ha Noi, June 9, 2021 GROUP1 - THE COFFEE HOUSE ASSIGNMENT EVALUATION No Task Task distribution ● Create powerpoint slide ● Make outline and brainstorm ideas All group members % of contribution ● Executive summary ● What is the operation management of the coffee house? ● Operation management objective Vương Duy Việt (Team member) Vũ Thành Trung (Team leader) 100% 100% ● Action management issues ● Conclusion Nguyễn Ngọc Hương Mai 100% (Team member) ● Inventory management Ngô Việt Trường 100% (Team member) GROUP1 - THE COFFEE HOUSE Table of Contents Executive summary I II What is the operation management of the coffee house? The input The process The output III Operation management objective Coffee quality Time IV Inventory management Definition Step for the coffee house to manage inventory Recommendation 10 V Action management issues 10 Supply chain management of The Coffee House 10 Total quality management 11 Just in time (JIT) 13 Forecasting 15 VII Reference 17 APPENDIX 18 LINK POWERPOINT: https://drive.google.com/drive/u/0/folders/1LLfHwHfPjKzh8qfcqMYhKWSnaYUgFz va 19 GROUP1 - THE COFFEE HOUSE I Executive summary Operations management is a field of management concerned with the design and control of production processes and the redesign of business operations in the production of goods or services Related to the management of the entire production system is the process of converting inputs (in the form of raw materials, labor and energy) into outputs (in the form of goods and/or services), as an asset or providing a product or service Product manufacturing, quality control, and service creation This report, our group wants to analyze the operation management of The Coffee house by using the knowledge we have studied in the subject: Operations management GROUP1 - THE COFFEE HOUSE II What is the operation management of the coffee house? ● Analysis of The Coffee House Operations There are three main steps of the sales management structure in the coffee house: input, process and output The input The input of the Coffee house includes customers and the ingredients for making drinks and food The ingredients must be strictly controlled to choose high quality, providing the best beverage experience for customers In the coffee house, from the first stores, they have started a partnership with Cau Dat Farm to grow coffee according to our own standards Through a strict roasting process under the hands of leading coffee experts in Vietnam, coffee beans with uniform quality, rich aroma and the inherent balanced taste of Cau Dat coffee beans will be brought to all stores on The Coffee House system to serve the customers The customer comes to the Coffee house to enjoy the drinks and food Moreover, this is the place that they can connect to their friend, college or another relationship GROUP1 - THE COFFEE HOUSE The process The process of serving drinks and food at The Coffee House includes making coffee for customers and customer’s care when they wait for their drinks " Before - In - After " Customers with a need to use store drinks will be welcomed by the employees, who are instructed to choose suitable beverages for the taste After receiving the customer's drink, the employee will have the duty to make the right drink the guest asks for and bring that drink to the table to enjoy it If the customer has any other requirements, the staff at the store will come to service so that the guests' experience is always good The employees will instruct customers to enter the cashier's counter to order the drinks, the cashier will guide the guests to choose the beverages according to the customer's needs, based on the menu placed immediately, and the small menu is placed on the menu table In addition to some exceptional cases at the store, when new beverages, seasonal drinks, combo, different promotions At the cashier's shop, will they need to ask whether they want to try that drink? Not only that, but the stores have snacks like salty cakes If combined with the guest's drinks, it adds to guests' meals Payment will occur after the order is completed, at the Coffee house's payments including cash, online banking, card, momo Since the coffee house uses both mobile apps GROUP1 - THE COFFEE HOUSE on both IOS & Android platforms in which the customer's information will be stored and other offers membership, the cashier also needs to ask customers to help customers with the shopping The payment is complete; the employee will give his client the invoice and some table based on the ordinal number on the invoice and not forget to the customer who used his service After ordering and paying, customers will be instructed to sit and wait for their drinks Customers will be served water and enjoy the music In addition to the invoices that the cashier gave customers, there would be a copy of the employee bill that would keep sending the bartender From here, the bartender would sort the bill in order and start making things The implementation of the drink must comply with the formula and complete within a given time for each invoice, except when there are too many drinks at the time, the cashier will have to ask for a client's permission to produce later (from 10 to 15 minutes) After the bartender completes his part, he will send a drink for his staff to the rest From here on, the staff will finish the drink following what has been specified from the top of (with a hot drink such as coffee, chocolate, mathe coffee houses will be left with a long spoon and a paper pipe that is placed) side, which a paper pipe will accompany When it has finished, the staff will arrange a drink again and put it on the tray simultaneously, arranging the proper invoices for that drink and ready to go The staff will go to every corner to find suitable tables for the drinks and deliver them to the guests When the delivery has been done, the employee won't forget to say, " enjoy your meal " to customers From here, customers will use their drinks if any problems occur such as drinks, space, etc Customers can call their employees directly to help if they are uncomfortable, and the customer can still resubmit their experience at the store through an existing app After each app transaction appears a review table for the customer at several stars from - 5, depending on the customer satisfaction level after making the evaluation table, it will directly be sent to the store manager if there are a low number of issues or issues that have complained It's best to make customers experience when using the store at best GROUP1 - THE COFFEE HOUSE The output After enjoying the service and quality of the coffee, customers will have the assessment of the products that determine their brand loyalty At The Coffee house, they have designed an app for the customers to respond to their feelings or not be satisfied about the products or staff Get feedback on the spot, if there is a problem, they will handle it immediately, avoiding a crisis For example, the writer once wrote a review through the app about the coffee cup with some powder on the bottom, less than minutes later the manager came and asked for permission to make a new cup Moreover, when customers order online: for every 10,000 VND, they will get point and 50 points corresponding to 500,000 VND, you will receive a drink of their choice Customers have voluntarily updated their information and they have more motivation to come to The Coffee House and get the promotion III Operation management objective Coffee quality To achieve success today, the last seven years The Coffee House continuously pursued actual coffee value, "non-season." It's like a religion, in a belief and grit aspect Do the right thing; it may not see the short term immediately, but in the long run, you will surely reap the sweet because it is the right way to go The coffee house recognizes that Vietnam ranks second in export but is raw coffee, used as raw materials for extracting components such as caffeine We also have high-quality coffee but no brand and hidden source That proves that Vietnam can grow good coffee but depends on buyers, world markets It’s time to build a reputation for high-quality Vietnamese coffee The coffee house began the journey of self-producing, providing raw materials, and giving natural coffee to the customers From the farm at its land bridge: production according to modern processes to improve the value of Robusta and arabica of Vietnam Conservation of typical, yellow cat of local and imported varieties of coffee from Costa Rica Testing preparation methods from the world's famous coffee countries with future goals will bring Vietnamese coffee abroad with a new mentality "From farm to cup" – “từ nông trại đến ly cà phê” is the whole process from the time the enterprise incubation, the harvest control, the preparation, and roasting in the counter GROUP1 - THE COFFEE HOUSE Behind the journey a drop of coffee was carried to the customer's hand, the collective effort of many people To enjoy a cup of coffee usually only takes 30 minutes, but to take care of the coffee tree that yields fruit takes three years And it takes two more years to get the best quality coffee The coffee house silently incubates the first coffee trees from three years ago, as soon as the dream of "THE COFFEE HOUSE" is hatching, and it will undoubtedly need more "three years" such as this exciting journey Time While quality is what customers focus on the most, preparing a drink will affect the customer's mood to enjoy the drink Customers not require drinks to be served perfunctorily, but they not want to wait too long for their drinks Beverages are required to meet the expected – 10 minute maximum wait time When managing such a professional and reputable brewing process, the baristas will not spend too much time making drinks and cause trouble to customers IV Inventory management Definition Inventory management includes aspects such as controlling and overseeing purchases — from suppliers as well as customers — maintaining the storage of stock, controlling the amount of product for sale, and order fulfillment Step for the coffee house to manage inventory ● Step 1: Statistics of numbers This is one of the key factors influencing the budget THE COFFEE HOUSE will take measures to limit fluctuations in the supply of food in its warehouse This is also the most likely stage of the loss THC used to get this job done Make a list of: Raw material: is a raw material that is sold or kept for production in the future, sent for processing and bought on the way home: sugar ice, coffee beans, math coffee house, ice cream Finished product: is the finished product after the product process.Such as :cakes, bread, etc ● Step 2: Use the treatment system GROUP1 - THE COFFEE HOUSE If you want to manage in detail and accurately the import and export situation of raw materials, The coffee house uses the software The recipe declaration of the software products will take up a lot of time at the coffee house, Include the goods declaration, raw materials list, then set quantity for each item With a list of about 100 product it will take about an afternoon to sell You need to input raw materials every day in the software with the recipe available: Net balance = Beginning Stock + Import - Export ● Step 3: Check inventory regularly to minimize errors Warehouse management is not easy, there will be a lot of problems around import and export you have no control, such as the employee forgot Do not enter the receipt of goods into the software, the staff enter the warehouse wrong number, sales staff did not enter the software, sold the wrong product, the formula was much wrong This makes the data on the software skewed with reality and only inventory that you know Recommendation The solution for inventory management is that the company should apply the FIFO Method (First In – First Out), this is an important principle in inventory management First in - First out means that the items you first entered need to be used first, which is especially necessary if you are selling perishable products Therefore, firms make sure that products are not left in stock too long Materials imported first will be processed first, material imported later will be processed later So the quality of the drink will be guaranteed V Action management issues Supply chain management of The Coffee House First of all, The Coffee House has their own supplier which is Cau Dat farm There, they provide the finest and aromatic Arabica coffee beans in Vietnam The Coffee House also has producers which bring packages and cups Under the control of the management team, the quality of these products is guaranteed The beans after harvest will be roasted, grinded and stored in cold storage In every store, the manager of the store orders the use of term-type orders filled which include coffee beans, milk, takeaway cups, straws, etc, ordering volume = demand – inventory 10 GROUP1 - THE COFFEE HOUSE Secondly, about the inventory file, everyday before work, the manager must check and calculate the inventory of raw materials Suppliers will deliver materials to each store Thirdly, it is about distribution planning, staff in the store receive and prepare orders to serve customers at the table The Coffee House also takes orders via the app, then the staff prepares, packs and ships the drink to the customer Finally, about customer service, THE COFFEE HOUSE welcomes any questions, comments, feedback and looks forward to receiving your information Those comments help them strive to provide the best customer experience possible Customers can leave comments on their fanpage or customers can review on the app THE COFFEEHOUSE and they will try to reply to you as soon as possible ● Issues There are a large number of issues in supply chain management but I will share some main issues which affected a lot The first one is cost pressure Labour costs continue to rise and a lack of local materials The cost of preserving raw materials is also high The product that comes to customers must be the freshest Secondly, there is a decline in the profit of stores Determining the areas that supply chains are impacted by controlling by local policies This led to disruptions and bottlenecks due to strict inspection on food safety ● Recommendation Communication and collaboration between supply chain control teams, building business operations, purchasing, logistics, etc are essential to reducing individual work and risk throughout the chain They are taking advantage of the latest developments in automation to increase productivity and reduce costs, improve storage capacity and consolidate manufacturing and distribution operations, and maximize service levels, system flexibility and operational resilience Firms should try to simplify and improve the supply chain to increase efficiency and profitability Total quality management The total quality management that the coffee house wants to focus on is the quality of the Vietnamese coffee Customers experience the best cup of coffee “People define good coffee as bitter and smooth For the past years, our regular customers say that the coffee is as watery as tea I travel to many parts of the world, but I have found that they not add additives like coffee in Vietnam, that brings me down 11 GROUP1 - THE COFFEE HOUSE compared to the world The cultural things are preserved, and what makes us set back should change My coffee culture is coffee filter, not marinade coffee” - The CEO of the coffee house said The Coffee House Blend is a unique blend of coffee at The Coffee House chain The principle is always put on top to ensure pure taste is sent to customers The coffee beans are strictly selected from the ripe fruit of the latest season, are harvested entirely by hand, reaching the ripe fruit rate accounting for more than 95% of the harvest The roasting and blending recipe of Arabica and Robusta beans of The Coffee House creates a balanced overall bitter, sweet and sour taste, helping coffee to be bold and fragrant The Coffee House wants to bring the best service to the customer In term of Staff, All staff must experience a severe training course to make sure the unique flavor and therefore the quality of nutrition for his or her drink consistent with the group’s standards ● Issues The issue of processing drinks of The Coffee House is that when we receive customer complaints about the quality of the drink, we will have to review all the parts of operation from importing the ingredients to the processing staff and how to preserve the materials Moreover, the attitude of the staff is sometimes unpleasant 12 GROUP1 - THE COFFEE HOUSE ● Recommendation For the drink, The Coffee House ought to verify the quality of products that suppliers have provided When using a machine, every day, we must clean all of the machinery and examine them every two weeks If something goes wrong, we must maintenance to ensure the food's quality The process of labor recruitment is carried out strictly and fairly and training must be conducted regularly To improve workers' sense of responsibility, they are forced to be punished if they are wrong Just in time (JIT) ● Definition: Strategy to increase efficiency and decrease waste by receiving goods only as they need them for the production process, reducing inventory costs In the F & B chain , it means to produce right after receiving orders ● Matter of F&B chain: The speed at which goods are delivered to clients is a major factor of customer satisfaction and competitiveness The more quickly a product is cycled, the more profit the brand earns Suppliers of material sources require technological investment and employees to maintain, they must always contain large amounts of ingredients and be ready to deliver at time If suppliers excess or little than actual need, there will be waste or slowdown in process causing great loss in money Customers require fresh and healthy drinks, suppliers can cause some products to become unqualified to be used, an accident related to food poison can damage the image of the brand heavily ● Objective of JIT as solution: Customizing products as needed, improving the features of the products, and improving satisfaction Control the delivering rate, make it easier to estimate the amount of ingredients needed to be stored, decrease the amount of waste in both material technology, and humans to operate the storage Keep the quality of products, from the beginning to the end as packing and serve to buyers, to avoid any accidents that can happen in the process Shortening the time of supply leads to faster product cycles, helps firms to gain more revenue, and allows them to spend extra stocks on other activities (HR training, technology ) ● Implementation of JIT in beverage chains: 13 GROUP1 - THE COFFEE HOUSE There is a recipe for each kind of drink, bartenders will receive orders and use raw material to drinks When the material in storage is not full enough, it is a signal to fill the storage Staff will not orders if the number of materials does not reach the quality This also helps the storage process, as it provides average sales each day , the forecast will be much easier , so that waste of material and other resources are minimal ● Benefits of JIT: Sufficient reduction of warehouse expenses: Companies using JIT can reduce their storage expenses and costs associated with warehouse management (its rent, upkeep, stores etc.) Saving money: JIT users can save money spent on extra stock that is lying on the shelves waiting for an order to come Inventory levels are relatively low, so is the risk of having extra stock This also means a benefit for the customer - as the lowered operational costs may bring a drop in end prices, which brings more demand and more market share Time is money: JIT implies that the amount of time needed for supply chain turnover is small The quicker retailer or manufacturer ships the order to an end customer, the better And logically, the quicker he gets the components or goods from a supplier, the better JIT strategy helps to quickly adapt and react to customer demand change, increasing the sales of top-demand bestsellers while lowering the production or supply of unwanted goods Drawbacks of JIT: Domino effects: If a consistent and stable supply chain is broken, the damage is terrible If any problem occurs - either a force majeure, human-caused issue, even a time gap - the result is considerable for each player Schedules are tough, and any delay or shift can again damage the supply chain triggering a domino effect ● Recommendation: Invest more money in HR training: This method allows firms to minimize the number of employees, but those staff must cooperate well to make the chain work If a problem arises for any cause, it will quickly break down all parts of the supply chain So that each staff must communicate and coordinate effectively to figure out suitable solutions As a solution, more investment in HR management will be needed to keep the process working well, specially training employees to multi-tasking will enable them to work as a team and solve problems quickly 14 GROUP1 - THE COFFEE HOUSE False forecast and resource supply matter: As the information is from store to store, using sophisticated inventory analytics and tools is highly recommended, to keep the reports in time and exactly, thus replacing calculations by humans with computer AI, is a good way to figure out customer trends and sales numbers Forecasting ● Demand The Coffee House has over 100 stores across Vietnam that serve over 40,000 customers a day As the behavior changes due to customer taste, THE COFFEE HOUSE must update the new trend The Coffee House should use a quantitative approach to improve the quality of products which will satisfy customer’s desires in real time ● Issues Stiff competition: Because of the huge demand for coffee- even in social situations, it is not uncommon to find a coffee shop in every corner There are many choices such as Starbuck, Highland, Customer service: Customer service has a huge influence on customer loyalty and retention Provide training for your staff on how to relate with customers and good teamwork to ensure fast deliveries Managing employees: Human capital is usually the trickiest resource to manage in operating Take the time to intimate your employees on the objectives of the business so that they can work towards the same goals The goal of THE COFFEE HOUSE is to improve the quality of the product to enable them to deliver happiness to the customer They still maintain their values to retain the customer which are Sincere, Caring, Creative and Brave ● Management Automate inventory ordering by using a technological system which is POS system A POS enables you to keep track of all your inventory, preventing losses from theft and errors made when taking orders from customers It also helps baristas and chefs work on orders swiftly and efficiently Customer service receives feedback from buyers about the quality of their drinks, what customers want, which seasonal drinks they like so THE COFFEE HOUSE will develop a suitable menu for each season based on customer needs 15 GROUP1 - THE COFFEE HOUSE ● Recommendation Developed a new type of snack and offered it to customers on the house after purchasing beverages such as: Peanuts, chips, etc In the coffee market, there are very few cafes that offer free snacks to customers after they order drinks This service will make a difference for The Coffee House The prices of these snacks are very affordable but can imprint on customers' minds a new way of serving Because many customers will feel short when only drinking one cup of coffee These snacks will not affect the sales of other cakes in The Coffee House because: snacks will not only make customers full but also snacks will mainly be salty Makes The Coffee House will lead cafe market in terms of this service Opening a souvenir shop at the store not only helps the restaurant increase revenue but also enhances the brand awareness of the coffee house to customers VI Conclusion Through this report, the managers can understand clearly the system in The Coffee House And with above suggestions, a ground will be put forward for The Coffee House to have next strategies in the future In general, The Coffee House has achieved proudly results in the process of building the brand Service in this coffee shop is highly appreciated in private cafe industries in Hanoi Thanks to this report The Coffee House will find out the best solutions to reduce the cost as low as possible and to provide the best value to the customer 16 GROUP1 - THE COFFEE HOUSE VII Reference The Coffee house, About the coffee house, available at [view at May20, 2021] Brands VietNam, Team mAPP, The advantage of The Coffee house when they use app, available at [view at May20, 2021] Tapchicongthuong, Supply chain of The Coffee House: https://tapchicongthuong.vn/bai-viet/mo-hinh-kinh-doanh-cua-chuoi-cua-hang-caphe-the-coffee-house-68402 [view at June1,2021] The coffee house, Hanh trinh tu nong trai toi ly ca phe, available at [view at June1,2021] The coffee house, Quality of coffee https://www.thecoffeehouse.com/pages/hat-caphe-the-coffee-house [view at June 1,2021] 17 GROUP1 - THE COFFEE HOUSE APPENDIX GROUP WORK –EVALUATION Assignment Topic Assessment activity The Operation Management of The Coffee house Group Presentation and report What proportion of the group work did you contribute, in % terms? GROUP No Full Name Class ID Contribution rate Vũ Thành Trung IB2018B 18071258 25% Ngô Việt Trường IB2018B 18071259 25% Nguyễn Ngọc Hương Mai IB2018B 18071157 25% Vương Duy Việt IB2018B 18071267 25% What was your key learning from this activity, both in relation to the topic covered as well as the group activity itself? The subject helps our team gain experience and knowledge about the operation management We understand how to analyze and better understand the process in the operation management in a company We can apply what we've learned about this subject to real-life circumstances like The Coffee house and it helps us to remember longer Furthermore, we also realize that there are a number of outstanding issues affecting the operation management, negatively affecting productivity as well as profits We also feel lucky to be able to act as the people who make suggestions to solve the business problems In addition, this is also an opportunity for us to work as a team, listen and share ideas, discuss problems and come up with solutions to improve the quality of reports as well as create good results for the team 18 GROUP1 - THE COFFEE HOUSE Do you have comments on the task, process or group dynamics (e.g that would help us to improve and develop the task for next year)? My team has no idea about the mission nor the motivation But if there is an actual business tour, it would be perfect! Please state how you used the group feedback to develop your group report In order to be more effective when working as a team during this covid season, we have set up a facebook group where we can chat At the beginning, we called a video on messenger to discuss the ideas that should be included in the report, all parts of the report we discussed together to clarify on the content, then the team leader would divide the tasks equally Every week, we would discuss difficulties such as not finding information or how to present it into the assignment During the process, we openly share our thoughts with the teammates so that other members can offer feedback and help us improve our part LINK POWERPOINT: https://drive.google.com/drive/u/0/folders/1LLfHwHfPjKzh8qfcqMYhKWSnaYUgFz va 19 GROUP1 - THE COFFEE HOUSE ... HOUSE II What is the operation management of the coffee house? ● Analysis of The Coffee House Operations There are three main steps of the sales management structure in the coffee house: input,... reduce the cost as low as possible and to provide the best value to the customer 16 GROUP1 - THE COFFEE HOUSE VII Reference The Coffee house, About the coffee house, available at ... creation This report, our group wants to analyze the operation management of The Coffee house by using the knowledge we have studied in the subject: Operations management GROUP1 - THE COFFEE HOUSE II