1. “My Compliments to the Chef, er, Buyer“
Operations Management Prof. Ying Jiun Hsieh
Papaya Milk: Jason, Jimmy, Nick, Rachel, Richard, Sandy

2. Outline Case Introduction Question Discussion Conclusion
Questions and Answers

3. Case Introduction
How they are able to serve everything on that menu quickly
Flash-frozen and vacuum-packed
Top- quality restaurants like Fuddruckers and Perkins are going the outsourcing route
Taglines such as “Hours versus ours” and “Just heat and serve”

4. What can be outsourced? Delivery of ingredients
Preparation of the food
Food arrangement
Others:
Accounting and payroll services
Kitchen cleaning
Laundry
Advertisement and marketing
IT (website maintenance)

5. Question Discussion
Question 1 Explain the meaning of the phrase “Hours versus ours.“

6. “Hours versus ours“
Consumer-goods companies such as Sara Lee, Land O´Lakes used slogans as advertisement
“Hours versus ours“, “Just heat and serve“
Stimulate B2B-relationships with restaurants
timely serving capability of restaurant businesses can be increased
Encourage restaurants to outsource business operations

7. Outsourcing vs. In-House
Capacity planning to identify requirements
“Hours“: Outsourcing to save time, increase profit
“Ours“: In-House solution to control quality

8. Example Outsourcing vs In-House
Fast casual restaurant - Fuddruckers
In-House Burger
Preparation meat, bread, toppings, sauces
Toast bread, grill meat/cheese
Assembly Burger (bread, meat cheese, toppings)
Service
Outsourced Burger
Receive meat, bread, toppings, sauces
Toast bread, grill meat/cheese
Assembly Burger (meat, bread), toppings choosen by cutstomer
Self- Service
Time
Fast casual restaurant is a type of restaurant that does not offer full table service, but promises a higher quality of food and atmosphere than a fast food restaurant

9. Question Discussion
Question 2 What advantages are there when restaurants outsource?

10. Advantages of outsourcing in restaurant
Improve efficiency
Save time to prepare or manufacture materials
Cost saving
Labor cost
Operating cost
Improve productivity
Expertise
Avoid time consuming of training employee
Demand
Wide fluctuation in demand

11. Question Discussion
Question 3 What are some important disadvantages or limitations of outsourcing for restaurants?

12. Disadvantages of outsourcing in restaurant
Quality consideration
How to monitor the quality of the food material
Risks
Loss direct control of operation
Delay in delivery
Quality defects
Taste (loss of freshness)
Damage to the organization’s reputation
Losses customer’s reliability

13. Question Discussion
Question 4 Do you consider restaurant outsourcing to be dishonest? Unethical? Explain.

14. In our opinion We focus on restaurant -can provided food faster
-capability-price-ratio
-feature
-health
* If the restaurant can suit our demand we consider it is ethical

15. Restaurant outsourcing
1. Advantage -reduce product cost (low price) -increase business efficiency (faster) -focus on core product (feature) 2. Heath (safety of the food )

16. Question Discussion
Question 5 Does restaurant outsourcing increase capacity? Explain.

17. Measures of capacity 1.Restaurant capacity = inputs / outputs
-Inputs = number of tables , seating capacity
-Outputs = number of meals served per hour
2.Outsourced part of cooking process can increase output measures
Shorter lead time
Increased number of meals served per hour

18. Take macro view
It’s important to consider how parts of system related. - if the restaurant have high productivity because of outsourcing,but don’t have enough inputs to serve customers is not good. ex: to add more tables and seats

19. Conclusion
Control 100% of your core, outsource everything else. Don’t open a restaurant if no one can cook!
Customer review:
“Unfortunately everything we ordered was from a frozen box and then deep fried. At least it was all served hot (from the deep fryer) except the burger which was the Costco style claw burger on a stale bun. Everything unimaginatively warmed up, ...just heat and serve. Even the burger condiments seemed tired!”

20. Questions and Answers

21. References
Operations Management by William J. Stevenson (11th Edition).