Describe and justify two different measures of operational performance related to F&B operations, using the literature as appropriate, that you feel would provide Nando's with the key information they need to manage their operation effectivel – Coursework Example
Measures of Operational Performance Related To F&B Operations Measures of operational performance related to F&B operations The Balanced Scorecard Approach (BSC)
This is a strategic management and planning system that is widely used in industries, non-profit organizations, and businesses to align commercial activities to the policy and vision of the business, enhance external and internal communications, and watch performance aligned with strategic goals. David Norton and Robert Kaplan came up with this idea as a performance measurement structure that adjoins strategic nonmonetary performance measures to conventional monetary metrics to provide executives and managers a more balanced perspective or organizational performance. In brief, the Balanced Scorecard approach is a management measure that will allow Nando’s as a Food and Beverage company to set, track, and obtain its major business strategies and goals (Prasad & Dev, 2000: 22).
Justification of why and how Nando’s will use the BSC approach
According to Hoque & James (2000: 1-17), a number of reasons justify why a Balanced Scorecard should be used by Nando’s as a middle-high range food service industry. In the first place, BSC is among the most important and sophisticated techniques of assessing performance in the industry, which could estimate the performance of managers from a variety of aspects as a framework to strategically manage organizational changes. The first aspect as to why the approach is important relates to customer satisfaction and perspectives. With the approach, the industry will realize the views of customers and the status of performance and strategy of the industry in building value-added for it. Cases like customer opinions, their satisfaction, attracting new customers. Market share, timely responses to their expectations and each customer’s profitability are among examples of evaluation standards that the BSC can reveal.
On top of the above is the reason that the Balanced Scorecard will help in the assessment of the production process and internal factors to enable the management to know which dimensions to look for superiority. With the BSC, there will be an evaluation of performance of internal activities in Nando’s as well as explain necessary actions to perform effective processes in the industry. The main aim here is to measure basic effective procedures on developing comparative advantage to carry on operations and techniques so that satisfied customer expectations are spotted out and quantified (Abdel-Kader & Luther, 2006:340).
For Nando’s to use the Balanced Scorecard, they must have a laid-down strategy to show their technical specifications and the related award criteria. For instance, they can have headings related to production and customer service and link them to the award criteria depending on the service given and the success of the production procedure (Johnson, Herrmann & Gustafsson, 2002: 750). The technical specifications are the key aspects that have to be achieved to determine if the management of the industry is doing its best. Customer satisfaction conditions must be met to conclude that managers are performing their work properly, a factor that determines the reward. This can only be done by following a procedure that includes translating the industry vision in order to gain consensus, conversing and connecting the goals to performance measures, allocating resources through a business plan, and finally getting feedback (Kaplan & Norton, 2006: 29).
The Customer Satisfaction Index (CSI)
Murgulets et al (2001: 1038) suggests that the CSI gives a clear indication of the quality of economic output in terms of the consumer satisfaction; it calculates the net present value of an industry’s customer base as a tool over time; gives information for planned industry applications; and is an overall predictor of corporate earnings and consumer spending. The Customer Satisfaction Index is therefore an approach that is fast and effectual in surveying solutions that can assist the management to understand and act on the feedback brought in by customers.
Why and how to use the Customer Satisfaction Index
Nando’s industry ought to use this measure of operational performance to achieve commitment and expertise in providing high standards of customer service so that they can ensure continuous business success for the industry and the customers. Knowing what drives the satisfaction of customers as well as the loyalty is important to Nando’s continued success. Client insight can assist the industry maintain and deepen their relationships with the clients. It can also create a way for the industry to drive profitability through decreased sales costs and reappearing revenue. Of most importance is the reason that the CSI will help the industry to identify areas of strength that may lead to higher chances of enhancing the business, evaluate their performance against competitors, retain the privacy of client contact information, and capitalize on the value of the time that Nando’s spend on customer insight and limit administrative costs.
The CSI is a cause-and-effect approach with indices for drivers of customer satisfaction on the left hand, such as their expectations, apparent quality, and value; satisfaction at the middle, and results of satisfaction on the right hand, such as customer complaints, their loyalty, their tolerance, and retention. These indexes are multivariable elements measured by a number of questions weighed in the model. The queries evaluate customer evaluations of each indexes’ determinants. They are reported on a zero to a hundred scales. The modeling and survey method quantifies the power of the impact of the index on the left to the right in accordance to which one the arrow points to. The Customer Satisfaction Index approach is self-weighting to increase the clarification of customer satisfaction on the loyalty of consumers. By looking at the impacts and the indexes, one can understand which drivers of satisfaction, when enhanced would have the most noticeable effect on the loyalty of customers (Mann, R., Adebanjo & Kehoe, 2008:186).
Abdel-Kader, M., & Luther, R. (2006). Management accounting practices in the British food and drinks industry. British Food Journal, 108(5), 336-357.
Hoque, Z., & James, W. (2000). Linking balanced scorecard measures to size and market factors: impact on organizational performance. Journal of management accounting research, 12(1), 1-17.
Johnson, M. D., Herrmann, A., & Gustafsson, A. (2002). Comparing customer satisfaction across industries and countries. Journal of Economic Psychology, 23(6), 749-769.
Kaplan, R. S., & Norton, D. P. (2006). The balanced scorecard: translating strategy into action. Harvard Business Press.
Mann, R., Adebanjo, O., & Kehoe, D. (2008). Best practices in the food and drinks industry. Benchmarking for Quality Management & Technology, 5(3), 184-199.
Murgulets, L., Eklöf, J., Dukeov, I., & Selivanova, I. (2001). Customer satisfaction and retention in transition economies. Total Quality Management, 12(7-8), 1037-1046.
Prasad, K., & Dev, C. S. (2000). Managing hotel brand equity: A customer-centric framework for assessing performance. The Cornell Hotel and Restaurant Administration Quarterly, 41(3), 22-4.