Managing Business Operations

The chosen company to study in this report is YO! Sushi.

I. INTRODUCTION

1. The Company

YO! Sushi is a chain of restaurants that was founded in 1997 by Simon Woodrofde in London, United-Kingdom. Its goal was to make sushi more approachable to the English market. In order to achieve so, it brought the innovative concept of the conveyor belt, also called “kaiten” and sushi bar ambiance that was so successful in Japan.
After its opening in Soho, London, its concept expanded among Londoners among whom the YO! Sushi brand quickly established itself as a unique dining experience.
The company pursued its expansion in the United-Kingdom and by 2001, it became the market leader in sushi restaurants.
The company receives an average of 300 applications per year from potential franchises. It began its international quest by entering the Middle-East in 2003. It progressively entered other European countries such as Portugal and Norway; in 2012, it opened its first branch in the United-States of America, in Washington.
The company reports that it serves over 5 million customers a year worldwide. (Rowland, 2014; YO! Sushi, 2014).

The Venue

In order to analyze the company’s operations, the venue should be introduced:
Customers enter the restaurant and a staff member immediately places them either on a table or at the bar. All seats are situated at proximity of the conveyor belt, which is located around an open kitchen. Condiments including sauce, wasabi and ginger as well as water are already at hand at any customer’s seat.
From that point, drinks can be ordered from a staff member and customer is introduced to a menu if he wishes to make a special order. Orders are immediately entered in an electronic mobile device. The customer can then pick any dishes from the belt. Once finished, the customer orders the bill and a member of the staff directs the customer to the counter booth where he will pay.

2. The competitive environment

YO! Sushi competes on different lines. First of all, there are alternatives restaurants providing Japanese food. From single local business to large chains such as Wasabi or Itsu, the sushi restaurant competitive environment is quite intense. Prices in YO! Sushi are higher than those two chains previously mentioned for instance. Indeed, comparing similar dishes enables to identify that YO! Sushi mostly price its dining experience as quality, although answering requirements and matching hygiene standards, does not highly overcome competitors’. On the other hand, in single branch sushi restaurants, where quality is often strongly emphasized, prices tend to be higher that those of large chains, including YO! Sushi (Wasabi 2014, Itsu 2014). Competitors have tried to copy YO! Sushi concept of installing conveyor belt as well in their sites, only in the United-Kingdom, however the experience still wouldn’t match the one customers would get when visiting YO! Sushi restaurants; according to customers’ feedbacks (YO! Sushi social media 2014).

3. Economic Environment Impact

The economic environment has direct impact over YO! Sushi and its competitors. Indeed, the economic climate would inevitably affect the chain as it operates in various international locations. In markets where the economic crisis is strong, customers will tend to watch more carefully their spending and it would impact the overall “eating-out” industry. In addition, companies such as YO! Sushi which price their cutting edge design and experience might suffer as competitors often offer larger quantity of products for similar prices and YO! Sushi where the service is more emphasized could come as second choice as defined by the theory of the firm mentioning that consumers seek to maximize their ‘utility’ (Cyert & March, 1963). Furthermore, when operating internationally, chains such as YO! Sushi inevitably have some pricing dilemma. The fluctuation of currencies, the pressure on pricing and the inflation rates related to raw materials prices have a threatening direct impact on the company and its well-being.
Those different factors can affect costs of the business which will inevitably diminish marginal revenue and affect its production at a micro level as denounced by the marginalcost-marginal revenue perspective (Sowell 2000).
Macroeconomics factors such as economic growth in the market and distribution of income among others will determine how the company will adjust its operations in order to maintain sustainable competitive advantage or to consolidate its existing position. Internationally, domestic companies will tend to have an advantage over YO! Sushi and while penetrating the market with its brand, it will have to maintain its standards has claimed in its domestic market (Forsgren 2008).

II. 4Vs ANALYSIS OF YO! SUSHI OPERATIONS

Operation Management theories extracted from Operations Management by Slack, Chambers and Johnston 1995.

1. Volume

YO! Sushi could be categorized as a Japanese fast food chain. Consequently it produces high volume. Even though dishes are freshly prepared daily, there is a pre-preparation that allows continuous flow of dishes on the belt and minimize customers waiting time. Products are prepared in batch by the cooks who will make a dozen of each dish at a time and repeat this action every time the quantity of this dish runs low on the belt. YO! Sushi establishes estimation of the demand per day and produces accordingly. It does not produce at demand like traditional Japanese restaurants. In addition, as the dishes are relatively small in each plate, they expect a average consumption of a certain number of plates per customers and therefore they fix their capacity to respond accordingly. The company specializes in producing a set range of products. Systemization is employed by staff as there is high repeatability to increase speed of production where staffs perform unique set of tasks in a row. Costs per unit are drove down, raw materials are purchased in large quantity, the company uses high technology to minimize labor needed and time within the process, which also helps to save some costs.

2. Variety

YO! Sushi offers a wide range of dishes, however it remains as a set menu and cannot be tailored according to customers’ requirements. Outputs are mainly standardized and produced in a regular basis which sets YO! Sushi operation has fairly low variety. Once again it enables the company not to affect costs to produce dishes to answer customers’ specific requirements. Flexibility is not a primary concern for the company. Nevertheless, it does not come as less of an advantage compared with the competition as most major chains provide a set range of products that cannot be adjusted. For instance, Itsu offers already prepared meals and no changes can be made to those (Itsu 2014). A local single branch Japanese restaurant might allow slight adjustment to dishes as meals are prepared when ordered, however this would be a mark of good service to improve customer satisfaction, but not obligatory.

3. Variation in demand

As any restaurants, there is an obvious variation in demand. Indeed, there will be two peeks where larger flow of passing customers will enter, for lunch and for diner. Even though there is a continuous service during the day from 12pm to 10pm, there will be larger amount of customers coming in during those two peeks and the restaurant has to manage their operations effectively to keep a clean flow going. Furthermore, YO! Sushi provides special offers on certain days of the week to attract new first time customers; such as “Blue Monday” or “Sumo Sunday”. During those days, the offer is very appealing and it drives in considerable amount of customers (YO! Sushi 2014).

4. Visibility

Due to the fact that YO! Sushi layout place customers around the open kitchen, it gives perfect visibility regarding the preparation of the food. There is high visibility, in the aspect of food preparation, as well as all dishes are in plates with transparent lids. On the other hand, some competitors such as Benihana have managed to offer even better visibility as they provide one cook per table and YO! Sushi sits customers around the kitchen but some will have better view than others. YO! Sushi has a system where the plates are colored and each color corresponds to a certain price (Benihana 2014, YO! Sushi 2014). We could talk about the visibility regarding pricing as well as customers can fully measure their expenditure while enjoying their meal. Finally, YO! Sushi manages to set up sites in high traffic areas such as train stations, shopping malls, where a lot of competing organizations cannot fit. Their brand is very visible as well.

III. FIVE PERFORMANCE OBJECTIVES ANALYSIS

1. Quality
Quality is a main concern for YO! Sushi. First, regarding food, the company makes sure to meet hygiene standards (Kuhn 2014). Food is freshly brought to restaurants and daily prepared on site. Cooks are trained to ensure quality of their service (People 1st Training Company,YO! Sushi case 2014). YO! Sushi makes the best use of technology among its competitors. Indeed, they partnered with Omnico to integrate an Epos system within their operation management to drastically improve their efficiency as well as their image. It is arguable that the service can also be improved with this technology as everything is automated and the customer has very little effort to produce in the whole process.
With customers selecting themselves dishes from the belt, staff members can dedicate more time to engage with customers offering better quality service as well. There are strict regulations within the company to ensure freshness of the products to consumers, for example a dish cannot stay longer than two hours on the belt. A labeling system shows when an item is placed and consequently when it has to be removed.

2.Speed

YO! Sushi must take speed very seriously in different aspect of its operations. Regarding the flow of customers, as mentioned above there are some peeks where the restaurant has to deal quickly with a lot of customers. From the moment a customer comes in, they are immediately seated where there is availability. The use of technology demonstrates here again its benefits as staff members can communicate with each other mentioning to signal available seats as well as to improve the overall coordination of tasks. Special orders are immediately taken and sent with the mobile devices staff members are using. The payment process is also time saving as bill is electronically entered and sent to the counter booth where the customer then goes to pay before leaving. Time consumption is extremely minimized in the whole operation process. Production of plates are made in batch where cooks place a certain quantity of similar plates on the belt and this continuously according to the ones being taken actually demonstrating the demand. Consumers are consequently confronted to a wide selection to limit special orders that take longer (Omnico 2014).

3. Dependability

YO! Sushi dependability relies on the answering what they are advertising and on time. As a “fast-food”, the restaurant has to provide service in limited amount of time; hence their accentuation on speed provided by their technology. Customers are fully in control of the time they spend to eat. They have to manage their operations to ensure that pre-preparation is set in anticipation of estimated demand so that customers do not have to wait for the dishes to be on the belt. In addition, dining experience is set to be relatively quick which allows customers to leave quickly and keeps a healthy flow to avoid queues. Availability of food is also being transmitted from cooks to staff members through technological devices so that customers are immediately notified if the restaurant runs out of specific dishes (Omnico 2014).

4. Flexibility

Even though YO! Sushi does not tailor according to demand, it offers more than 80 dishes from a variety of selected range of products. They offer meat, fish, vegetarian and other types of products making sure that it can suit all tastes. Prices vary according to the plate color that allows customers to eat for cheap or not. Tables or bar seats are also provided so customers can choose which experience would most suit them. YO! Sushi also provides takeaway as well as pre-orders if the dining experience is not the primary concern of customers (YO! Sushi 2014, EATOUT 2014).

5. Cost

Regarding costs, the reliance YO! Sushi has on technology gives the company the ability to save drastic costs, from time to a reduction of employees needed. Raw materials are bought in large amount, which enables savings as well. The conveyor belt makes customers self-serving themselves and the company has established a partnership with technology third-parties to ensure best quality technology service and eradicate costs attributed to it; as the company highly relies on technology this strategic alliance is an advantage on the long-term as costs would have been relatively high. The company is actually very productive as overall unit costs are low and prices set in order to have fairly good marginal revenue. YO! Sushi makes also very efficient use of their technology operation management system which collects regular data to anticipate demand forecast and consequently proposes adequate capacity to answer demand adequately and limit wastage to its most, avoiding inventory and wastage costs. The company switch to clouds IMGROUP has also enabled 40% savings that were mostly attributed to servers, according to Bill Waters (Microsoft Case Study 2012).

Order Qualifiers & Order Winners

Winner
Among YO! Sushi activities, the use of technology can be characterized as the biggest order winner of the company. Indeed, in its competitive environment, YO! Sushi has the best technology implementation. From its internal IT operation management that enhance the company’s capabilities through improving data management and security as well as service accuracy and efficiency; to the provision of ipad touches and mobile devices to its employees on sites, YO! Sushi generates a sustainable competitive advantage, while also maintaining low costs levels allowing the company to be price competitive (Omnico 2014, Nicholls 2013).
Another major order winner would be the experience the company provides to its customers. As a matter of fact, the initial strategy was to bring sushi more approachable to the people with a fun experience. The company has managed to achieve so by creating a contemporary design with innovative a creative environment to ensure first timers will become YO! Sushi fans.
The conveyor belt, which was first introduced in the United-Kingdom by YO! Sushi has given a new self-serving experience to customers also promoting high visibility of the process, giving YO! Sushi an edge over its competitors. Even though Benihana went a step further on visibility, they did not match to compete on prices and the venue relies therefore on a different experience attracting another customer segment less price sensitive (Benihana 2014).
The “cool” and “techie” image YO! Sushi has successfully built joins the innovative way the company engages with customers through intense social media interactions actually creating a fan base for its concept (Tabbitt 2012).

Qualifier
Regarding the quality of the products, YO! Sushi remains as qualifier due to the fact that its matches the standards without outperforming competition which in some cases such as local sushi restaurants or larger chains such as Benihana offer higher quality products (Benihana 2014).
In addition, YO! Sushi developed packaged products to sell in retails as well as for takeaway. Competitors such as Itsu who focus more into this sector offer products of better quality at competitive prices.
The full transparency was at first a winner for the company, particularly regarding the products’ composition for health purposes, however competitors such as Itsu made a concept around this matter, proposing different dishes with fully detailed composition according to the interest of customers (Itsu 2014).

Challenges

YO! Sushi has to maintain its image as innovative and creative to keep its main “winning” advantage, it sometimes reveals challenging. For instance, the organization is trying to implement further robotic service such as its iTray first introduced in London (Haggerty 2013). The concept is a flying tray commended by an ipad serving dishes to tables. This innovation turned out not to be successful and it also brought controversy regarding the fact that customers still desired human interaction while being served.
The trademark YO! is also an “order winner” for the company as it is now assimilated the quality and fun experience. YO! Sushi executives are also planning to expand the brand in leisure activities, hotel, spas. In the event those ventures do not succeed, it could affect the overall brand image (YO! Company 2014).

IV. OPERATION STRATEGY ISSUES

YO! Sushi has a strong dependence on technology. From financial management, data security, service efficiency and many others, YO! Sushi uses a number of third parties with whom it established partnerships, such as Epos ClarityLive, Aiwatch, and Omnico. If those technology services encounter issues, YO! Sushi might find itself in a hard situation. With intense data manipulation, even though security is highly considered, there is always a risk to jeopardize its own information as well as its customers’.
The headquarter has an IT system than monitors and supervises all franchises operation activities (Omnico 2014). If the system crashes, this will undeniably negatively impact the whole organization.

With a main competitive advantage created through its use of technology that drastically enhanced its capabilities, YO! Sushi is submitted to the threat that competitors can implement such strategy and add it to their own existing capabilities.
Regarding more specific factors, the peek where demand is very high is a sensitive matter to the company. It has to really coordinate efficiently so that they avoid queuing or waiting time that would go against their motto of fast-food service.

Installing high-technology systems can turn out to be very costly particularly regarding telecommunications. YO! Sushi used to have call centres however cost started to be very high. In order to solve this issue, YO! Sushi integrated in-house solutions and engaged in opening many new outlets to make worth of their investment (YO! Sushi 2014).
YO! Sushi deposited a trademark to protect their brand and to project its image.
Nevertheless, some competitors are trying to copy and to produce substandard goods that could affect the image of YO! as well as the profit those would gain from substituting YO!’s original products (YO! Company).

Ensuring quality the way YO! Sushi does require serious measures to be taken. As a matter of fact, the company requires food handling and hygiene skills certificate for its employees. With over 2000 employees to train, the company faced difficulties providing such training and it became expensive too. To respond to this issue, YO! Sushi has implemented an online training course for its staff to be trained. They have managed to save £35,000 in the first 6 months (EP Magazine 2013).

To finish, with many franchises opening each year, the corporate parent has to ensure that the culture is being maintained and that franchises keep the same level of quality and service standards (Monks & Minow 2011).

Process

Operation Management theories extracted from Operations Management by Slack, Chambers and Johnston 1995.

The likely process choice:

An emphasis on speed, quality and cost, which are the three main areas of expectation for customers is highlighted. The speed of the process guaranties the “fast-food” service and maintains a healthy flow within the operations. Quality to ensure the freshness of the products as well as the service and the overall experience customers are seeking when visiting the restaurants. And Cost which enables YO! Sushi to be price competitive and to satisfy its targeted market segment.

Layout

The layout choice could be defined as a product layout due to the fact that the product follows a line and workstations are located around it. It confirms the low variety and high volume production. This layout allows a short time dedication to each task from the input to output stage which also maximize the number of outputs. It creates a continuous flow of the different operation stages involved in the process by requiring small repetitive tasks that are being performed with more efficiency from the workers who are familiar with their job. Other advantages would be simplified planning, control and monitoring; as well as staff training is specialized.
Coordination is nevertheless highly required from supervisors to avoid bottleneck blockage which would slow down the whole process and affect customers’ experience. Job satisfaction might also be affected by the repetitive tasks employees are asked to perform. Other aspects must be enhanced to improve the work environment so that staff remain motivated.

V. SUPPLY CHAIN

Information extracted from YO! Sushi supply chain (YO! Sushi 2014)
YO! Sushi gets its fish supplied by well-established companies that share their values and concerns about environmental and sustainability concerns. Due to the fact that salmon and tuna are the main fish being consumed in the UK there is a high availability of suppliers for those, which consists of the main components of the company’s dishes. No upstream vertical integration, which offers more flexibility to YO! Sushi regarding its food supply. Products such as tuna and prawns among others are farmed and supplied from Asia and then frozen and shipped to the UK. Vegetables, fruits and chicken are supplied from within the UK and from other European countries according to the season.
To summarize, YO! Sushi gets all its food supplies from third parties answering quality requirements; it seeks for best bargain.

YO! Sushi has built good relationship with its suppliers on whom it can highly rely. The company can then have better control over raw materials costs as well as ensuring coverage of their demand as they have installed technologically enhanced communication and monitoring system between the parties involved in the supply chain. Their very efficient operation management technology system also enables Yo! Sushi to efficiently manage inventory and production according to estimated demand that strongly reduces risks of shortage or surplus.

Yo! Sushi has a more downstream vertical integration, even though with limitations. Indeed, they build a fan customer base through their website and social media, providing benefits and gathering relevant data about their customers with whom they share the YO! Sushi culture.
Technology allows cutting some intermediaries, particularly in data management within the operations that only requires supervision rather than labor involved. Technology services used to be fully outsourced however it cost a lot, which is why YO! Sushi has established partnership with major companies that take care of this side of the operations, leaving the ability for YO! Sushi to focus on the remaining aspects that are all being directed from the headquarter in London.

VI. QUALITY CONTROL

As quality is of main focus to YO! Sushi, the company takes drastic measure to maintain the high level that it claims.
YO! Sushi does a DNA traceability of fish and eggs to ensure quality of breed. Suppliers are carefully selected; fish are bred in large amount of water. They accentuate corporate social responsibility. They have a technology system to monitor inventory, they set a maximum time for dishes on the belt to make sure the products are fresh when taken by customers. YO! Sushi is in constant communication with Marine Stewardship Council that recommends best practice to remain sustainable while dealing with wild fisheries products. Control is made by the Sustainable Fisheries Partnership’s fish source to manage tuna supplies. They also follow a rating system that categorizes the fish to provide customers with best value. Shipment of products are regulated and controlled before and after arrival; For instance prawns that are shipped from Thailand are regulated and controlled by the Good Aquaculture Practice (YO! Sushi 2014).

Regarding their service, the self-service process they offer to customers enable staff member to better engage with them and provide the best quality service possible. The training of staff highlights their skills for cooking and serving that also promotes very good quality standards.
Frequent feedbacks are requested by Yo! Sushi from its customers through questionnaires, surveys and social media. They also give incentives to make sure they get proper and relevant results allowing them to improve their service and control quality over customer satisfaction (YO! Sushi 2014). Feedbacks are very positive regarding the experience and the service, even better than competitors. The quality of the food qualifies without outperforming competition according to feedbacks (YO! Sushi Social Media 2014, Itsu Social Media 2014, Wasabi Social Media 2014).

VII. CONCLUSION

The layout efficient raw materials use added to technology operation management system which minimize wastage through maximizing inventory management. Constant data analysis helps with effective planning and consequently demand estimation that is being answered adequately through a n electronically synchronized control of the supply. It however presents disadvantages as well; such as the limited flexibility. As dishes are being produced in batch, the variety of products being put on the belt at a time is relatively limited and in the event that there is a peek in the demand, the workforce must be increased and the time allocated to each task minimized in order to satisfy sudden demand. Planning requires a lot of attention as pre-preparation can only do so much due to the short period of time dishes are allowed on the belt before being taken out. With limited variety of dishes on the belt, the number of special orders would increase which will slow down the whole process and go against the company’s claims as speed and quality of service would be jeopardized. On the other hand their IT management system has allowed the company to reduce staff and staff workload as well which helps them to reduce costs.

YO! Sushi has managed to correctly apply their strategy that was to harness innovative technology to enhance their brand image as well as to build a solid competitive advantage. In doing so, their exploitation of technology, particularly mobile technology has drastically improved their efficiency, from the service to the payment process. However innovating can sometimes turn out dangerous; to illustrate this point, the iTray and other robotic service they have adopted surely raised market attention but were widely criticized by customers as they clearly expressed the wish to have human interaction. Consolidating their creative and innovative brand image can be at the cost of losing efficiency in their quality of service.
The outsourcing of the technology and overall IT management makes it easier to manage especially due to the fact that the company grows at an average rate of ten new restaurants opening per year.

With a cost minimization per unit strategy, YO! Sushi has certainly managed to remain price competitive in spite of the “techie and modernist” experience they can provide to their clients.
They are leading the innovations implementation within their process which has enabled them to maintain an edge over competition and also to achieve a singularity that cannot be found elsewhere. This justifies as well why their main focus is on the venue experience rather than products itself where competition is more intense and diversification can be tougher.
Nonetheless, YO! Sushi does not just “drop the ball” on their menu; they have even been qualified as “unorthodox” when introducing a larger range of desserts than their competitors (Martell 2012).

Their transparency, from the food preparation to the food composition is a major strength of YO! Sushi, however competitors are sometimes specialized in those aspects, such as Benihana for the preparation, and Itsu for the composition and health aspect. Strengthening this point is crucial for the company not to loose the respective market segment to those competitors, particularly Itsu which is also very much directed towards speed and short time consumption.
Keeping on diversifying their range of products looks like a good strategy as their 90 current dishes are very appealing to customers. However they will have to overcome the challenge of not reducing the time consumption within their operation process. Developing new products while not adding additional suppliers would be the perfect option. They successfully target several market segments with their variety of dishes which allow them to take advantage of economies of scale to profit from their relatively low price strategy.
Territory expansion is among their future plan; with their existing competitive advantage and a diversified experience to offer to customers, if their culture is properly being transferred to franchises, success rate should be high.
Maintaining low operating costs is a priority for YO! Sushi to keep its leading position; while innovating further must continue in order to pursue with the competitive advantage it has managed to create.

VIII. REFERENCES

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