JD Wetherspoons Case study:

How can Planning and Control help to meet customer Demand?

Contents:

Introduction. Page 2.
What customer demand do Wetherspoons pubs face? (Part 1a). Page 2.
How can Wetherspoons control demand and plan to meet it? (Part 1b). Page 2.
How well does Wetherspoons currently manage it’s supply and demand? Page 4.
(part 1c).
References. Page 4.
Apendix. Page 5.

This report is written about J.D.Wetherspoons. J.D.Wetherspoons is a managed pub company. Wetherspoons pubs are usually found in urban and suburban areas, and are renowned for offering cheap food and drink, no music and some would say no atmosphere. Wetherspoons turnover has increased every year since they began in 1979, and shows no signs of levelling out. Wetherspoons was founded by Tim Martin who remains director of the company today. This report aims to look at customer demand in Wetherspoons pubs, and how Wetherspoons can plan for and control this demand.
What customer demand do Wetherspoons pubs face? (Part 1a) There is no doubt that J.D.Wetherspoons has a high volume of customer demand, with revenue of £1,972.1 million last year between 860 pubs (JD Weatherspoons annual report 2012). There are real ale festivals and 428 Wetherspoons pubs achieved 100% from cask masque for the quality of their ales (http://www.jdwrealale.co.uk/guide/cask-marque, 25/11/2012). But pubs are no longer about simply selling beer. Many Wetherspoons now open from 7am (Julia finch, The Guardian, 2010) for breakfast; though they do not serve alcohol until 9am. Coffee sales in 2009 were 25 million, according to Tim Martin in the Guardian newspaper (Julia Finch, 2010). A look at the food menu makes it clear how varied it is, with over 70 meals on the main menu plus curry night, steak night and Sunday lunch menus, desserts, sides and options to add sauces to steaks and toppings to burgers (The Berkeley Wetherspoons, 2012). The drinks menu offers everything from WKD to local guest ales. Most Wetherspoons allow children in until 9pm, and some have even started having mother and toddler groups in the morning (Wetherspoons news, 2012). Wetherspoons faces independent demand, which requires make-to-order planning and control. Some factors which affect demand can be predicted, such as the Olympics, and jubilee this year helping to increase profits by 8.4% (Nick Fletcher, The Guardian news blog, 2012). Demand is also affected to some extent weather ‘The business is subject to minor seasonal fluctuations, depending on public holidays and the weather’ states a Wetherspoons interim report (2012). It is clear from reading reviews of Wetherspoons pubs that weekly variations in demand can be predicted to some extent, with Friday and Saturday nights consistently busier than weekdays (see appendix). To a large extent though, Wetherspoons is subject to the whims of customers and factors which are impossible to predict.
(397 words)
How can Wetherspoons control demand and plan to meet it? (Part 1b).
The main indicator of future demand in Wetherspoons pubs is historical data. It is reasonable to assume that demand will be around the same as the same period the previous year, hopefully slightly higher. In order to make this information useful it should breakdown the sales into wet and dry (drinks and food), and days of the week. If the data can be broken down further to show sales of individual products at different times of the day then managers can use this information to plan stock and staff levels. For example, Wetherspoons has Curry night on Tuesday nights. If the data is available to see how many baltis were sold last week and one year ago on curry nights then a reasonable prediction can be made as to how many will be sold this Tuesday. Because pubs operate as make-to-order, only producing food or drinks when customers order them (Slack et al, 2007) it is impossible for them to operate a level capacity plan (Slack et al, 2007). Instead a combination of chase demand and manage demand plans (Slack et al, 2007) are the most useful. Chase demand means that an operation adjusts it’s capacity to meet expected demand. In order to chase demand Wetherspoons employ a large number of hourly paid staff (22,912) compared to salaried staff (3,953) (Wetherspoons Annual report 2012)). The Wetherspoons jobsite encourages 16 and 17 year olds to apply stating ‘(That’s why) we offer flexible contracts and working hours to suit your studies’ (Wetherspoons jobs website, 2012). Wetherspoons has also scrapped the retirement age , ‘lunchtime is a particularly busy period for the company's outlets and it has found that some older workers - who might be looking to work for a few hours a week - are adaptable and happy to work at this time’ (D.W.P case study, January 2011). Manage demand planning means changing demand to better meet capacity (Slack et al, 2007). In order to manage demand the most effective method is to offer promotions and discounts during periods of lower demand. A look at a Wetherspoons menu makes it clear that this is a method widely used with a selection of drinks for £2.10 on Monday nights, promotions on food and a drink on Tuesday nights (curry night), Thursday night (steak night), and deli deals (Monday to Friday lunchtimes). Another way of manage demand planning is diversifying the products or services offered, to make great use of capacity and increase profitability. Wetherspoons operates longer hours than most pubs, as mentioned in 1a, opening early mornings for breakfast and coffee. This increases the effective capacity of the pubs by increasing the potential number of customers which they can accommodate in a day. Hosting mother and toddler groups is another example of extending Wetherspoons’ activities beyond the normal scope of pubs. In terms of sequencing Wetherspoons operate a F.I.F.O (first in first out) system. This means that orders are met in the order in which they are received (Slack et al, 2007). Customers expect to be served as soon as possible in a pub. This also means that they operate forwards scheduling, so that customers are served and orders processed as soon as the customer arrives at the bar or the front of the queue if there is one. In a restaurant there is a lot more scope for controlling the timing of demand throughout the evening by taking bookings and skilled waiting staff can encourage customers to have a drink and some bread before ordering food if the kitchen is very busy, or try to subtly get customers seated and take orders immediately if they are expecting to be busy later in the evening. With Wetherspoons the customer’s order at the bar and expect their food out quickly. Wetherspoons aim to deliver meals within 10 minutes (www.Banburylocaljobs.co.uk, 2012) which means very little scope for scheduling tasks.
(657 words)

How well does Wetherspoons currently manage it’s supply and demand? (part 1c) The fact that Wetherspoons turnover increases every year, despite a 20% drop in beer sales between 2008 and 2012 (Steve Hayward, The Mirror online, 25 November 2012) suggests that Wetherspoons must be successful at matching capacity to demand. Wetherspoons increase in turnover every year does suggest that in fact demand is greater than supply. Wetherspoons opened 40 pubs and closed 3 in the year to July 2012 and plans to open 25 new pubs this year (Wetherspoons annual report , 2012). Long term capacity seems to be increasing to meet continuing demand successfully. Medium to short term planning and control is harder to monitor as this is down to individual pubs and managers. There is certainly evidence that demand is greater than supply from reviews of Wetherspoons pubs (see appendix). The outcome of this is that customers are forced to wait longer than they are happy with, and leave the pub dissatisfied by their experience. If customers are consistently dissatisfied then Wetherspoons reputation will suffer and this will affect sales (demand). This affects the organisation by causing a mismatch between supply and demand and reducing turnover and profits.
(200 words)
References:
Julia Finch (2010), ‘Wetherspoons pubs to open at 7am’, The Guardian (online), http://www.guardian.co.uk/business/2010/mar/11/wetherspoon-to-open-at-7am, accessed 25/11/2012
Wetherspoons (2012), ‘A welcome break for parents and tots’, Wetherspoons news (online), http://www.jdwetherspoon.co.uk/home/news/a-welcome-break-for-parents-and-tots, accessed 25/11/2012.
Wetherspoons (2012), ‘The Berkley menu’.
Nick Fletcher[->0] (2012), ‘Marketforces live blog’, The guardian (online), (http://www.guardian.co.uk/business/marketforceslive/2012/sep/14/wetherspoon-olympics-taxes, (accessed 26/11/2012).
Wetherspoons interim report, 2012, www.jdwetherspoon.co.uk/home/investors/finance-reports/final-interim-report-2012.pd[->1], (accessed 26/11/2012).
Wetherspoons (2012), annual report (online), http://www.jdwetherspoon.co.uk/home/investors/latest/annual-report-2012---final-pdf.pdf, (accessed 26/11/2012)
Wetherspoons (2012), Jobsite, http://www.wetherspoonjobs.co.uk/home/latest/are-you-16-or-17-years-old, (accessed 26/11/12).
Banbury local jobs (2012), Kitchen staff (online), http://www.banburylocaljobs.co.uk/Jobsite/Jobs/2323029/Kitchen-Staff, (accessed 28/11/2012).

Department of Work and pensions (2011), ‘Case study: Wetherspoons workforce management’ (online), http://www.dwp.gov.uk/docs/case-study-jd-wetherspoons.pdf, (accessed 28/11/2012).

Steve Hayward (2012), ‘Bitter truth: Britain’s selling a billion fewer pints a year’ The Mirror (online), http://www.mirror.co.uk/news/uk-news/britains-pubs-selling-a-billion-fewer-1455427, (accessed 28/11/2012).
Apendix:
Reviewed 11 September 2012,
Called in for a full english breakfast. Plenty of tables vacated however all tables covered with dirty crockery yet 4 bar staff not doing much. as too busy talking. Put me off for good
Pallagrass (2012), Trip advisor review of Penzance Wetherspoons (online), http://www.tripadvisor.co.uk/ShowUserReviews-g186240-d3294081-r140711155-Wetherspoons-Penzance_Cornwall_England.html, (accessed 29/11/2012).

It is alot smaller than the other Wetherspoons. There are not as many tables or chairs and it does get quite packed on a friday or saturday night. Even during the days at lunch times and evenings its quite busy.
MattyW (2009), Qype review of Wetherspoons Mansfield (online), http://www.qype.co.uk/place/252358-Wetherspoons-Mansfield (accessed 29/11/2012).

Friday and Saturday night is always heaving, and it take about 20 minutes to buy a drink. but all in all a good local.
Adaved (2008), Qype review of Luton Wetherspoons (online), http://www.qype.co.uk/place/132115-Public-House-J-D-Wetherspoon-Luton, (accessed 29/11/2012).

[->0] - http://www.guardian.co.uk/profile/nickfletcher
[->1] - http://www.jdwetherspoon.co.uk/home/investors/finance-reports/final-interim-report-2012.pd