2014

Helio Chitamba

Vaal University of Technology

10/9/2014

Operations Management Practice Final report

1

Introduction

Operations management is discipline that is necessary and used in 40% of all jobs, according

to (Heizer and Render). In the last few weeks I had the golden opportunity to work side by

side with a manager, and for three weeks I was able to shadow him, he was my mentor. In

this report I will cover all aspects of my training, discuss in depth about how the company

operates and some techniques I used to improve their operations in the work place.

Company overview

MCafe is a pub & lounge located in vanderbijlpark. MCafe has been satisfying local

customers for almost 12 years now, they serve a range of beverages and an exquisite menu of

homemade food. To remain competitive MCafe brings customers affordable prices with

excellent promotional activities and pushes the boundaries in undercutting their competitors’

prices in terms of beverages and lastly they strive to be as organised as they can be to run a

smooth business and with immediate efficiency.

Day 1 at the job

When I arrived at MCafe, I was firstly introduced to the owner and senior manager of MCafe

Mr Gilbert, we sat down for some time discussing my practical project and how we would go

about achieving both our goals. He soon briefly discussed with me matters related to the

operations and activities that occur in their daily routines and in his business. Mr Gilbert

easily explained how decision making is done through a chain of command, that all big

situations are dealt with and resolved by him, thus placing his management team with day to

day issues to resolve, the floor managers have ownership and responsibility over their jobs

and make sure employees follow through and deliver good services. It also came to my

attention that MCafe has undergone some major changes over the years, first is that they

successfully managed to secure a contract with Heineken beer, and opened the only Heineken

lounge in the Vaal Triangle area. As soon as our conversation was complete Mr Gilbert

redirected me to one of his floor managers Mr Francois to provide me with orientation.

Mr Francois took the time to take me on a Behind the scenes orientation tour at MCafe. I was

taken to the kitchen, where all the food is prepared with utmost care for hygiene, the women

working in the kitchen had gloves and aprons and cooking hats to prevent pieces of hair from

falling while they cooked, it was almost as if they were working in a laboratory, everything is

measured and controlled to preserve the good taste in their food. I was also shown the storage

room, this is where they keep their expensive bottled drinks and most of the stock. I was also

shown the industrial generator at the back of the site, which comes in quite handy when the

lights go out in the city which happens quite often.

Finally I was shown how the Draft keg cans are operated and taught that the quality of

service is what makes MCafe stay ahead of their competitors and thus making this their

uniqueness.

2

Roles and Responsibilities

MCafe is made up of two sections the MCafe lounge and the Heineken Lounge, I was

orientated in both sections, I was given the privilege to work side by side with Mr Matt the

second floor manager at MCafe, Matt’s job is to make sure that inventory is checked as soon

as he starts his shift and that all bar stock reflects what is written on the sheet at all times, he

is also responsible for the employees in such a way that he must supervise and ensure that

they are performing their duties as conformed. Overall Mr Matt oversees that everything is in

the right place and working accordingly. My roles are:

To improve methods used in inventory control

To improve capacity planning to better utilize their space

Learn and understand their service processes

Learn to take in stock count

Do any other activities required of me

Images from: www.google.com/barstocktipsandtrade/image

3

Mcafe

Behind the bar

A few days ago I was given the privilege to work with a floor manager at a local pub near the

campus. As soon as I immersed into the world of providing good services and effectively

performing operations while being productive, they were a lot of dos and don’ts I started to

notice. Some of which I will talk about.

Bar stock

Bar stock is inspected and counted for manually, because there are two managers and they

have different shifts every time one’s shift ends it is his duty to perform a stock count, the

accurate data is then written by hand on a bar stock sheet like the one below:

Image from: www.google.com/barstocktipsandtrade/image

4

I was also able to observe some of the techniques they use to measure the amount of shots

and litres of alcohol in whiskey bottles and Draft keg cans, they use a measuring board for the

cocktail bottles and hot drinks, e.g. martini and cognac etc. the measuring board which is an

effective equipment helps the barman know how many shots are still left for him to serve

before the bottles will need replacement, this reduces the time it takes to go to the store room

and get a new bottle while serving customers, also helps management keep a close eye on

how many shots are sold.as for the beer bottles in the fridge are counted by the manager of

that particular shift and is written down on a bar stock sheet.

During my recommendation stage I will suggest that they use a computer software to

automatically count the beers in the fridge through scanning, in such a manner that every

time a beer is scanned and sold it automatically reflects on the database of bar stock, this

system should be shared upstream to suppliers and manufacturers, this way there is a

continuous flow of goods being delivered to Mcafe at all times, their supplier will know

exactly what needs to be replaced in stock and what dates to deliver.

Another interesting is the keg can, the bar counter is supported or hosts 6 to 10 counter

fridges and the draft glasses are kept cold in this fridges at all times, they are kept in a

controlled temperature to keep the glasses almost frosty cold. This is done to ensure that

customers draft is always served chilled and sweating cold. The keg cans use a pressure pipe

that pushes the draft all the way up to the draft tap on top of the counter, an inspection device

looks like an electronic stopwatch, this device is used to control how many litres are still in

the keg cans.

Photo taken by: Helio Chitamba date 08/10/2014

5

Drinking glasses

There are different glasses for different kinds of drinks served, this are some of the glasses

used at the bar.

Images from: www.google.com/barstocktipsandtrade/image

Shot glasses

Types of shot glasses

Different types of shot glasses and what they are used for.

The shaker, definitely interesting, used to shake drinks and cocktails, unfortunately no

juggling of bottles is allowed by management, for sake of not breaking bottles but I will

recommend some ways to avoid bottle breaks while performing juggling.

6

Coffee machines

They have two coffee/expresso making machines including, a coffee bean crusher, there are

also different coffee mugs and the expresso and coffee are served differently:

Process flow for Making Coffee

No

Yes

No Yes

START Add water to

pot

Place coffee

pot onto

coffee

maker

Pour water

into coffee

maker

Filter into

coffee

basket

Measure

coffee into

filter

Plugged

in?

Taste

ok?

Plug in

Turn on

Start over END

7

Process flow of food

No Yes

START Food

delivered from

local stores,

e.g. SPAR

Food is immediately

refrigerated for conservation

Taken to

kitchen

Customer

makes an

order

Food is

marinated

Food is

prepared and

cooked

Food is given to

waiter attending

the client

Satisfied

?

Food is served

to customer

Return to

kitchen END

8

Process flow for Drinks

Yes No

No Yes

Start Drinks

delivered by

multiple

suppliers

Manager inspects the #

beers ordered

Stored in

storage

room

Placed in

the fridges

Keg cans are

attached to

pressure tubes

Draft glasses

are placed in

counter fridges

Customer asks

for a beer

Do you want

it with a

glass?

Get glass from

counter fridge END

9

Policies and regulations

In this sections we see the rules and ways of proper conduct. It is a basic overlook on

discipline and guidance of fulltime employees, this polices help them know their parameters

and all those unwanted work behaviours such as horseplay.

Below are some of the everyday rules applicable at MCafe and some of the reasons why this

rules are vital to the effective running of their business.

Rule #1

do not use a glass (or plastic) cup to get ice from a storage bin.

Reason • An unwashed hand reaching closely into the ice will contaminate the ice.

• Cups that are not washed properly can also carry contaminating agents to the ice.

• Glass cups can chip. The chips will not always be visibly detectable and could end up in a

customer’s drink.

Tip • Use ice scoops, always.

Rule #2

do not use the same towel to wipe off the bar and to clean glassware.

Reason • Food contact surfaces must be sanitized, not just wiped to look clean. bacterias will be

spread around rather than killed, which can potentially affect the next customer.

• Multi-use towels pick up smells and spread them around, creating an unpleasant seating

area for customers.

• Improperly sanitized bar tops can pass off bacteria to menu covers, silverware and

serviettes.

Tip

• Keep a bucket with a sanitizing solution behind the bar.

• Have a designated set of towels for wiping the bar only.

10

Rule #3

do not stack glassware directly on the bar.

Reason

• Storage mats protect glasses from getting chipped.

• Surfaces used for dining and drinking should never be used for overall storage. This creates

a potential for cross-contamination for the stored objects. Also, storage areas are often left

unchecked during sanitizing wipe downs.

• Glass racks and clean shelves provide safe areas without the risk of busy bartenders, servers

or clumsy customers knocking over and breaking glasses into ice bins or other preparation

and serving areas.

Tip

• Use bar mats for glasses that are stacked directly on counter tops.

• Utilize glass racks for organizing glassware.

Rule #4

Wash and sanitize cutting boards and knives between uses and items (this includes cutting

boards used for preparing garnishes.)

Reason

• Decrease the risk for a bad batch of fruit to spoil the bunch, contaminated fruit is just as

much of a risk for causing cross-contamination as contaminated meat.

• Specialty garnishes that aren’t of the typical citrus variety are increasing in popularity and

introduce more risk; such garnishments include shrimp, tomatoes, chilies, peppers and

salami.

• Customers with sensitive allergies may experience a reaction from the smallest fragments of

products mixing in with what they consider as a safe and allergy-free order.

Tip

• Use colour coded cutting boards to keep preparation of garnish types separated.

Rule #5

11

Wash all fruit or vegetable garnishes in the kitchen prep area thoroughly before cutting.

Reason

• Remain in a food safe area just as the kitchen staff does when preparing food for menu

items and avoid using the bar sink for washing produce.

• Dirty glasses and splashing water create a possibly contaminated area for scrubbing

produce.

• Customers can sneeze or cough in the direction of your scrubbing (and cutting area.)

Tip

• Designate a time for washing produce in the kitchen prior to a bartender’s shift starting to

prevent overcrowding in prep areas.

Rule#6

Throw out unused garnishes at the end of service and clean and sanitize the garnish holder

every 24 hours.

Reason

• Do your best to keep sticky fingers out, usually bartenders will snatch from the garnish

holder and chances are they are not doing so with freshly washed hands.

• Flies love sugar alcohols and will frequent garnish holders off and on during any given

shift, thus bringing and leaving contaminating bacteria along the way.

• Contaminated trays will carry over bacteria from one night to the next.

Tip

• Post a reminder in the bartender’s closing checklist to discard unused garnishes and sanitize

the holder every night.

Rule #7

Use tongs or toothpicks to handle cut garnishes when creating a cocktail.

Reason

• Although some states may allow bare-hand contact, it is in best practice to use toothpicks or

tongs when handling cocktail garnishes to prevent cross-contamination.

12

• Busy bartenders are often completing three tasks at the same time: speed cleaning a glass in

the sink, pouring drinks and reaching for the proper garnishes.

• Customers are often put off by watching bartenders handle garnishes directly with their bare

hands. Create a safe and inviting atmosphere by taking the time to keep tongs or toothpicks

next to the garnish tray.

Tip

• Keep a well-stocked supply of toothpicks and tongs near the garnish area.

Scheduling

Task Mode Task Name Duration Start Finish Predecessors Resource Names

Manually Scheduled

Week 1 45 hrs Sun 14-11-16

Fri 14-11-21

Manually Scheduled

Day 2 Managing Mcafe

9 hrs Tue 14-11-18

Tue 14-11-18

Manually Scheduled

Stock count 3 hrs Tue 14-11-18

Tue 14-11-18

Manually Scheduled

keeping licensing legislation up to date

3 hrs Tue 14-11-18

Tue 14-11-18

Manually Scheduled

motivating staff 3 hrs Tue 14-11-18

Tue 14-11-18

Manually Scheduled

ensuring beer and wine are in good condition

2 hrs Tue 14-11-18

Tue 14-11-18

Manually Scheduled

Enforcing health and safety rules

2 hrs Tue 14-11-18

Tue 14-11-18

Manually Scheduled

Day 3 Managing Mcafe

8 hrs Wed 14-11-19

Wed 14-11-19

Manually Scheduled

Managing Kitchen staff

2 hrs Wed 14-11-19

Wed 14-11-19

Manually Scheduled

Dealing with difficult customers

2 hrs Wed 14-11-19

Wed 14-11-19

Manually Scheduled

oversee activities related to serving customers

1 hr Wed 14-11-19

Wed 14-11-19

Manually Scheduled

Review financial statements

1 hr Wed 14-11-19

Wed 14-11-19

Manually Scheduled

Day 4 Managing Mcafe

8 hrs Wed 14-11-19

Thu 14-11-20

Manually Scheduled

Day 5 Managing Mcafe

8 hrs Fri 14-11-21

Fri 14-11-21

13

Manually Scheduled

Week 2 40 hrs Mon 14-11-24

Fri 14-11-28

Auto Scheduled

Day 1 Managing Mcafe

8 hrs Mon 14-11-24

Mon 14-11-24

Manually Scheduled

Day 2 Managing Mcafe

8 hrs Tue 14-11-25

Tue 14-11-25

Manually Scheduled

Day 3 Managing Mcafe

8 hrs Wed 14-11-26

Wed 14-11-26

Point of sale system

Mcafe uses a point of sale computer software that can be used to determine how many

products have been sold from date specified up to the present day, when in use managers can

easily identify which products have sold the most and how much money they have made in

the day, the week and even the month.

Photo taken by: Helio Chitamba 08/10/2014

14

Facilities layout (present one and improved)

1. Current layout

Storage room

Kitchen

Mcafe lounge

Store room

stai

rs

Heineken lounge

15

2. new improved layout

Storage room

Kitchen

Mcafe lounge

Store room

stai

rs

Heineken lounge

The improved layout allows for more space in Mcafe, the current layout has too many VIP

areas and many of the times it is occupied by two or three people that purchase a bottle,

causing Mcafe many of the times to be out of capacity simply because there are not enough

seats in the house. By removing some of the VIP sections and isolating it only to one VIP

area per section has allowed me to create more space for the business hence increasing

capacity.

16

Pictures in the Field (* all photos were taken by me Helio Chitamba in the

month of October)

17

Trending Projection (*all calculations are based on estimates and are not direct

financial records from company, that information is classified*)

Month Time

period(×)

Sales

(y)

X2

Xy

Jan 1 R 90 000 1 90 000

Feb 2 R 65 000 4 260 000

Mar 3 R 76 000 9 228 000

Apr 4 R 54 000 16 216 000

May 5 R 60 000 25 300 000

Jun 6 R 78 000 36 468 000

Total= 21 Total=

R423 000

Total= 91 Total=

R1 562 000

𝑥 =∑ 𝑥

n=

21

6= 3.5

And

𝑥 =∑ 𝑦

n=

423 000

6= 70 500

Therefore

𝑏 =∑ 𝑥𝑦 − 𝑛�̅��̅�

∑ 𝑥2 − 𝑛𝑥2=

1 562 000 − (6)(3.5)(70500)

91 − (6)(3.52)= 4 657

Then

𝑎 = �̅� − 𝑏�̅� = 70 500 – 4657(3.5) = 54 200

Therefore

Demand in June = 54 200 + 4 657 (7) = 86 799.

This forecast shows us that their income is steady and will continue growing.

18

Equipment maintenance

Maintenance of the fridges and the keg equipment are performed by the actual brewer

companies, this suppliers simply allow the bar to use there fridges and equipment with

specific instructions on how to monitor and take good care of the equipment, when something

happens or the equipment fails, the brewer companies will come by to either replace or repair

the fridges,

Recommendations

Quality service:

Initial thoughts, MCafe definitely needs to focus more on customer services, the location of

the business is excellent and is at an advantage, because it is close to two universities which

make up almost 60% of market in terms of alcohol consumption and nightclub customers. I

need to perform a market strategy to pull in more college students by adding some kind of

fun factor at the bar, snooker pools, dart throwing boards, pinball tables etc.,,

Inventory control:

I would like to suggest ways to maintain their stock under control, by use of computer

systems, a spill and waste sheet, which records all the waste and spills during busy nights,

that also tracks customer returns when it comes to food and ways to effectively count their

stock without the chance of human error.

Spill tracking sheet:

This form provides the means to track food and bar waste as it occurs, designed for

clipboards, can be placed in the kitchen or bar so that re-cooks, spills and wrong orders cab

be accounted for.

Capacity planning:

Through facility planning I shall utilize some techniques to save up space and provide

contingency plans for nights that they are out of capacity, here I will plan to purchase more

tables and chairs, I wish to invest in more four seated tables and do away with the more than

needed VIP sections

19

Supplier vendor selection

Trust between companies in a supply chain management is one of the most necessary assets

to any successful relationship between business owners, many outlets like Mcafe have a

number of suppliers and play they decisions via prices, but the in today’s world, businesses

are forming strong bonds, that benefit their own supply chain, I would advise this business to

have a select few of suppliers, this will result in stronger bonds and major discounts, through

mutual agreement.

Health and safety first aid

Safety and health regulations, all by which uphold and support the current company policies

and guides of good conduct by employee. This regulations need to be enforced on a daily

basis, employees must refrain from unorderly misconduct and harmful horseplay. Signs and

safety awareness boards should be placed in the workplace to remind employees to keep up

with rules

Return on investment

If all the recommendations I have listed above are followed and implemented I believe can

make a major difference in the way business is done at Mcafe, also this will influence a

dramatic increase in their cash flow. Below are some estimates of how much Mcafe would

need to invest in order for this project to work.

Items needed Estimated Price of items

16 Tables and chairs R 11 500

Pool table, Dart board and pinball R 23 000

Stock control software & spillage sheet R 3 000

Health and safety signs and boards R 600

Total R 38 100

Investment (Capital) = R 38 100

Estimated End value = R 67 000

Return = R 28 900

Therefore = ROI is almost 75.85% (estimates)

20

Conclusion

Lastly I would like to point to the fact that Mcafe has a great potential to be the

leading pub bar & lounge in the Vaal triangle, out of this research project I have

come to understand how this business works and what actions need to be taken

to take this company to the next level, it will require some hard work and a

necessary chance to take a risk, but in the end it would be a risk that would most

definitely be beneficial.

21

References

1. www.google.com/how to type and investigative report/ simple

format of an adjandency report. Date of access (29/10/2014).

2. www.cases of operations management.com Date of access (

28/10/2014)

3. Heizer. J and Render.B,(2011).Operations Management, Tenth

edition, Pearson education limited:Cape town.

4. www.google.com/barstocktipsandtrade/images. Date of access

(01/11/2014)

5. Health and safety rules and regulations, from Mcafe policies and

code of conduct documents, and customs and practices