Chick-fil-A

Dustin Grace

BUS 360-Belhaven University

Over time more and more people have become busier in their everyday lives. Therefore, there is less time to prepare and cook meals for the family. As more parents are on the go, the more they appreciate establishments like fast food restaurants. These types of restaurants are convenient and for the most part inexpensive. Customers can drive up to the drive-thru window to get their food if they don’t want to leave the comfort of their car. They also have the option of going inside and sitting down to enjoy their meal. There are many fast food chains around, but none compare to the phenomenon known as Chick-fil-A. As the company’s name reveals, Chick-fil-A centers their business around chicken. Their slogan that you’ll see on most billboards “Eat Mor Chikin,” is provoking just that. There isn’t a hamburger to be found on the menu. In Chick-fil-A’s case, chicken equals gold and boy do they serve it in many different ways. What genius came up with the novel idea of centering and entire restaurant around chicken? That man would be Truett Cathy. It was the year 1946 when Truett Cathy started his career in the restaurant industry. Mr. Cathy and his brother did not attend a restaurant school and had not knowledge on how to run a restaurant. They both served in the United States Army during World War II. When they came back to the United States after serving in the Army, they decided to enter the restaurant industry. Even though they had no experience with managing a restaurant, they decided to take a leap of faith and open their first restaurant (Bhasin, 2012). Mr. Cathy and his brother opened the Dwarf Grill in Hapelville, Georgia in 1946. The Dwarf Grill was rename The Dwarf House sometime later. There are eleven Chick-fil-A Dwarf Houses in operation today, and they are all located in the metropolitan area of Atlanta (Company Highlights, 2014). The Dwarf House is where Mr. Cathy and his brother invented the famous chicken sandwich that would become the staple of the Chick-fil-A menu (Bhasin, 2012). Approximately fifteen years after the opening of The Dwarf Grill (The Dwarf House), Mr. Cathy founded Chick-fil-A, Inc. It was in the early 1960’s and the story of Chick-fil-A was beginning to form. Mr. Cathy is said to have paved the way for restaurants in shopping malls. In 1967, the first Chick-fil-A restaurant opened for business at a mall in a suburb outside of Atlanta (Company Highlights, 2014). This was the start of a huge success story for Truett Cathy. Since the opening of the first Chick-fil-A restaurant, Chick-fil-A restaurants have popped up all over the United States. There are approximately 1,700 Chick-fil-A restaurants in thirty-nine states. One of Chick-fil-A’s unique characteristics is that it is a family owned company and a privately held company (Company Highlights, 2014). That is a rare thing for a fast food restaurant in today’s time. Most fast food restaurants are publicly traded to help with the success of the company. However, Mr. Cathy wants him and his family to be in control of the company and be able to make the decisions regarding the company. He knew the key to success was not found in stock shares. He knew the only key to success for his business was God. Mr. Cathy is a devout Christian man. He is a true Southern Baptist, and the world knows this about him. He wants everybody to know where he stands and what he believes in. Mr. Cathy has been a Sunday School teacher for over fifty years. His focus was on teaching the Bible to boys, and he did that for over five decades. Since he has gotten older, he does not teach Sunday School on a regular basis anymore but will fill in to teach in case he is needed on a Sunday morning (Bhasin, 2012). According to the article “S. Truett Cathy” on truettcathy.com, “Cathy built his life and business based on hard work, humility, and biblical principles” (S. Truett Cathy, n.d.). Chick-fil-A has both a mission statement and a Corporate Purpose. The mission statement for Chick-fil-A is very similar to other fast food restaurants in the industry. It is “Be America’s best quick-service restaurant” (Farfan, n.d.). It is short, simple, and to the point. However, its Corporate Purpose is what separates Chick-fil-A from other fast food restaurants. The Corporate Purpose of Chick-fil-A is “To glorify God by being a faithful steward to all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A” (Bhasin, 2012). Mr. Cathy wants his restaurant chain to glorify God because he knows that God is responsible for him to even have Chick-fil-A as his business. Therefore, Mr. Cathy bases his business operating decisions on his Christian faith and values. To be successful, owners must evaluate and make decisions that are in the company’s best interest while also producing a profit. According to the textbook Operations Management in the Supply Chain, operations decisions must be made in relation to Process, Quality, Capacity, and Inventory (Schroeder, Goldstein, & Rungtusanatham, 2013, p. 10). Mr. Cathy makes his decisions on the above operations based on his Christian beliefs. He knew he had to incorporate his Christian values when he opened his restaurants. Even though he did not have experience in the restaurant industry, he knew that “With God, all things are possible” (Matthew 19:26). Mr. Cathy knew God was on his side. An operation decision that Mr. Cathy had to make was the ‘Process’ Operation decision. According to the textbook Operations Management in the Supply Chain, the focus of this operation decision is ‘to determine the physical process used to produce the product or service and the associated workforce policies and practices (Schroeder, Goldstein, & Rungtusanatham, 2013, p. 10). The decisions in this category are long term and are not reversed in an easy manner. These decisions are made based on the long term goals of the business. An operating decision in relation to the process decision model that Mr. Cathy made in regard to Chick-fil-A is that all Chick-fil-A restaurants are closed on Sunday. That is a huge operating decision and most business people would say it is a bad business decision. People think the more a business is open, the more money the business will bring and being closed one day means one less day of profits. However, Mr. Cathy did not view being closed on Sunday as a negative decision. It way a way to honor God. God rested on the Sabbath, and Mr. Cathy thought everybody else should, too. “By the seventh day God had finished the work he had been doing; so on the seventh day he rested from all his work. And God blessed the seventh day and made it holy, because on it he rested from all the work of creating that he had done” (Genesis 2:2-3). He made the decision to be closed on Sundays when he opened his first restaurant in 1946. According to Mr. Cathy, this decision is both spiritual and practical. “He believes that all franchised Chick-fil-A Operators and their Restaurant employees should have an opportunity to rest, spend time with family and friends, and worship if they choose to do so” (Company Highlights, 2014). God has blessed this decision to be closed on Sundays. Chick-fil-A is one of the most popular restaurant chains around. It ranks tenth among America’s most popular fast food restaurants. It is also listed as the second largest chicken restaurant chains in regards to fast food chains. Chick-fil-A restaurants bring in about $4,000,000,000 in sales every year. Mr. Cathy himself has done well and his estimated net worth is $6,000,000,000 (S. Truett Cathy, 2013). As one can see, the decision to be closed on Sundays has not hurt Chick-fil-A at all. The employees benefit with day off and get to unwind from working all week. Mr. Cathy did not want to deal with business on the Lord’s day, and God has rewarded him for being faithful. Mr. Cathy claims, “It’s part of our recipe for success” (Company Highlights, 2014). Quality is another operation decision that is essential for a business. According to the textbook Operations Management in the Supply Chain, “quality-related decisions affect the value and functionality of the goods or services produced and delivered to customers” (Schroeder, Goldstein, & Rungtusanatham, 2013, p. 10). In regards to the quality of food at Chick-fil-A, the company uses many fresh ingredients as it can in its menu. Chick-fil-A is proud to say they prepare high quality food. The chicken is hand-breaded. Then it is cooked in peanut oil that is one hundred percent refined. The salads and wraps are freshly prepared with the freshest lettuce and vegetables. Chick-fil-A’s tea is brewed daily, and the lemonade is made every day with fresh-squeezed lemons (Company Highlights, 2014). Chick-fil-A has scored high in all categories when it comes to quality. The chicken chain gets high remarks in food quality/taste, service, cleanliness, atmosphere, and overall value (Tepper, 2012). Anyone who has been to a Chick-fil-A knows that this is accurate. Mr. Cathy’s Christian values can be seen in his restaurant every day. Chick-fil-A’s great services that they provide us as a consumer are without a doubt convenient and tasteful, but without their suppliers or, distributors we wouldn’t get a product at all. Chick-fil-A gets its chicken from Pilgrim’s Pride, its ketchup from Heinz, and cheese from Kraft. It also has two main distributors that allocate all supplies and products to the stores across the country. MBM Corporation out of Rocky Mount, North Carolina distributes Chick-fil-A with a lot of its food and supplies. On that list is all of their chicken, waffle fries, carbonated drink syrups, eggs, deserts, and cleaning supplies. They get all their fruits and vegetables from Alliant Food Distributors. Alliant is responsible for dispersing bi-weekly lemons, lettuce, cabbage, onions, tomatoes, pickles and carrots. Without all these moving parts, it would be impossible for Chick-fil-A to be profitable and satisfy thousands of customers each day. Chick-fil-A employees are trained to treat customers with respect. Saying “It’s my pleasure” after serving a customer has become a staple for the chicken chain. How can someone not feel good about themselves after someone who just served them food and it was their pleasure to do so. Employees are trained to make sure the restaurant is clean and is an enjoyable environment. Chick-fil-A is also a company that is known for hiring people with disabilities. God loves all people, and Chick-fil-A feels that people with disabilities should have the chance to have a job. People with hearing disabilities can get a job at Chick-fil-A. People with Downs Syndrome can get a job at Chick-fil-A. Whether they work behind the counter or wipe down tables, these special people get to have a job in the real world and get to be loved by a company who cares about them. As customers, we all know what superior service and quality Chick-fil-A brings to the table. But what we don’t see is the endless amount of hard work from planning and scheduling that goes on behind the scenes. Critical capacity decisions are made on a daily basis to keep the firm going and help the stores with their never-ending goals. Long-range decisions have to be made on facilities and process selections so, that service can be provided for years to come. The right questions have to be asked when it comes to facilities, because location and planning are crucial to a restaurant’s profits. I have a buddy who is a manager at Chick-fil-A so, I know for a fact that they ask the following: Where should a facility be located? How large should each facility be? What is the crime rate like in that particular area? What is the GDP for that particular region? Are there any other fast-food competitors close by? These questions are sometimes tough to analyze, but have to be answered for the good of the company. Chick-fil-A, just like any other company, has to take capacity into consideration. Capacity is best described as the sum of all its parts. Those parts being aggregate planning and budgeting. Since aggregate planning is a model that is used months in advance, it is perfect for a Chick-fil-A to use in designing their budget. They can then understand and know how much to allocate for inventory, employee’s salaries, overtime wages, and so forth. Budgeting is obviously a building block for any association to cover expenses and stay profitable. However, it is also critical that the fast-food giant does not overspend on needless things that aren’t necessary. When moving into a new community, management has to ask themselves if they can produce enough chicken to meet the demands of the customer. That question is usually always yes, because Chick-fil-A can influence demand in several ways through pricing, advertising, backlogs, and development of complimentary offerings. The same goes with supply. The chicken giant can increase or decrease supply by: hiring or laying off employees, using overtime or undertime, carrying inventory, or subcontracting. All are common ways to idle or stimulate capacity on the store level. Scheduling decisions can be very challenging for the management team of a business and Chick-fil-A is no different. Managers have to allocate their resources to specific jobs and tasks so that the customers leave happy every time. They have to make sure there are enough employees to cover each shift successfully without any bottlenecks. They’re also responsible for the scheduling of inventory and making sure it gets received in on time. The economic consequences of running out of stock are both severely damaging and costly. It is financially smart to keep inventory levels lean in order to keep costs down, but a stockout can cause a customer to become disloyal and never associate with Chick-fil-A again. The profit from that particular sale and future sales could potentially be lost. Not to mention that’s condoning bad business practices by not having an item that you take pride in carrying. Chick-fil-A’s great services that they provide us as a consumer are without a doubt convenient and tasteful, but it’s what they do behind the scenes and in the community that makes them so special. They have become a phenomenon to the food industry with their popularity and like I mentioned earlier, I believe a lot of that has to do with them being a proud Christian organization. Whether it’s the polite employees, countless hours of volunteerism, or millions of dollars donated to charity. Without all these valuable moving parts, it would be impossible for Chick-fil-A to be morally and financially profitable each and every day.