Prepared by Team #3

1. Adolfo Arrieta (Information Consultant)

2. Jemimah Jarri (Schedule Administrator)

3. Michael Williams (Media Coordinator)

4. Nic Gedeon (Project Manager)

5. Ryan Bovee (Project Consultant)

Class

Operations Management 4010-02

Instructor

Dr. Thomas Abraham

Table of Contents:

I. Introduction

II. Vital Core Competencies

III. Management's Goals and Priorities

IV. Analysis of Specific Process

V. Recommendations

VI. Conclusion

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I. Introduction

Our report focuses on a particular Panera Bread restaurant located in Short Hills, N.J. As a team, we will focus and display this particular restaurants operational functions such as employee roles, distribution channels, consumer relations and how they directly impact their prospective order fulfillment process. The above information will determine our overall analysis on this particular restaurant.

1. Company Information

Panera Bread was founded in in 1981 as Au Bon Pain Co., Inc. The two founders were Louis Kane and Ron Shaich. In 1993 they Au Bon Pain Co. purchased the Saint Louis Bread Co. who was made up of 20 bakery-cafes located in the Saint Louis area. By 1997, the company's name was changed from Au Bon Pain Co. to Panera Bread Co. which resulted in a 75% increase in average sales volume. The company currently owns and operates approximately 1,500 restaurant/cafes (not including franchises) around the United States and parts of Canada.

Panera Bread headquarters are stationed in Sunset Hills, MO. Current CEO Ronald Shaich and William Moreton serve as head executives in charge of 18,000 employees through North America. Panera Bread offers a wide variety of food specialties including several varieties of bread, such as bagels and muffins, cold sandwiches, hot paninis, salads, and soups. Panera Bread was vote #1 in Best Healthy Option among restaurants throughout the country which will enhance their overall image as time moves forward.

Notable Awards & Recognition's - 2011

1. Casual Dining Brand of the Year

Harris Poll EquiTrend®

Panera Bread named Casual Dining Brand of the Year

2. Best Salads and Top Rated Facilities

Zagat

Panera Bread was awarded #1 ranking for Best Salads and Top Rated Facilities (for chain restaurants with less than 5,000 outlets) by Zagat, the trusted restaurant review service, in its annual consumer-generated 2011 Fast-Food Survey

3. Significant Contributor to Industry

MUFSO Pioneer Award

Panera Bread Founder and Executive Chairman of the Board Ron Shaich honored with this award for being one of the most significant contributors in the history of the food service industry

4. Innovation

Nation’s Restaurant News MenuMasters Innovator Award

Panera Bread Executive Vice President and Chief Concept Officer Scott Davis honored

Promotional Video

2. Company Analysis

Panera Bread Co. strives for perfection through its quality and affordability of there products. Each year Panera Bread strives to have the best breads, bakery products, soups and sandwiches. There goal is to be the best in the industry each year and this is why they have such high standards involving employees, managers, suppliers, distributors etc. Panera Bread realizes that in order to be the best it will involve cooperation and teamwork from every person involved within the company.

Our prospective Panera Bread restaurant encompasses a network of suppliers and distributors. The store Manager, Mr. Louis Clein, is in-charge of placing the orders directly with the distributor. Once the shipment is made at the store, the products are distributed evenly and according to there appropriate location. Some products will require assembly by the employee which include the made-to-order products. Other products such as breads and pastries are prepared in advance. While there are multiple process's of preparation for different meals, the goal maintains uniform for every product put out by Panera Bread. The main goal is to maintain a high level of satisfaction within the customer base which is only possible through quality and maintainability.

II. Vital Core Competencies

The following are just some important Core Competencies that our store believe are resources and strengths in their strategy to maintain a high level of of quality in there product and with customer.

1. Hiring process - Panera Bread hiring process involves two key core competencies of the store. The two competencies are workforce and systems/technology. The hiring process for Panera Bread requires hopeful employees to fill out online questionnaires and answer a variety of different questions on the web. This allows the manager of the store to evaluate the candidate through the world wide web. If the candidate seems like they satisfy a certain need at the store, the manager will then contact the person directly in order to set up a meeting. The online hiring process allows managers to analyze the answers and different qualities of the candidates. This facilitates the distinction to whether the person will be able to find a niche at the store.

2. Customer relationship - Our store has a "24 hour response line" that permits customers to get in touch with personal from Panera Bread at any time throughout the day. This response line is in charge of making sure the messages get forwarded to the prospective store manager. The manager is obligated to follow up with the customer whether the call involves a complain or compliment. The "24 hour response line" was integrated into the strategy of Panera Bread in order to allow the customer to have a say in how Panera Bread functions as a company.

3. Assembly line - Our store has an assembly line which involves three different work stations. Once an order is placed at the front cashier the order receipt will be forwarded to either the salad, soup or sandwich section. This process allows for the lead time between order and delivery to be much more efficient and shorter. The assembly line is vital to maintain a high level of satisfaction with customers.

III. Management's Goals and Priorities

Mr. Louis Clein runs a very efficient operation at Panera Bread in Short Hills, N.J. The management at this prospective Panera Bread believes that the only way to profit and be successful they need to provide top of the line customer service. Each day management has to make sure the operations at the restaurant are working properly. Mr. Louis Clein elaborated on the importance of making sure workers are positioned in locations where they can succeed. By positioning workers accordingly, the restaurant will be able to achieve immense customer satisfaction as a result of meals being properly and promptly prepared.

Maintaining a high level of customer satisfaction can be very difficult. Mr. Louis Clein highlighted the important of their Baking Marketing Managers (BMM) and Regional Marketing Managers (RMM) who are responsible for the training and maintenance of all the cafes in the New York Metro Area. By having external managers, Panera Bread in Short Hills, N.J. is able to provide higher satisfaction than competing cafes because they are constantly being surveyed by the Baking Marketing Managers and Regional Marketing Managers. As a result of the management forces at Panera Bread, they are able to keep customers happy by not having any delays in the customers order, cooking/prepping food properly and delivering the product at the expected time.

One major goal and priority that Mr. Louis Clein stressed involves the importance offering new menu items. The new items will enhance the customers interest in coming back to Panera Bread. The most recent service which our Panera Bread is offering is their catering service which provides customers with the opportunity of catering a meeting, a sales call, a social gathering or any other kind of occasion large or small. Mr. Louis Clein believes that customers will enjoy what they make as much as they enjoy making it for them (customers). As a result of the managements goals and priorities, managers and employees are able to evaluate themselves accordingly in order to succeed as an overall restaurant.

Please click for more on Panera Catering

IV. Analysis of a Specific Process

Extensive process of delivering the product to the customer

Customers at Panera Bread are essential to the success of the overall operational strategy of the restaurant. Our Panera Bread restaurant offers breakfast, lunch and dinner options which gives a variation in the steps for prepping and methods of delivering the product to the customer. The process that we will be highlighting is the order fulfillment process which incorporates all the activities that take place from the moment the buyer/customer places an order until that order has been delivered in full. How well our restaurant abides to the order fulfillment process will determine how well the customer is satisfied, and therefore achieving a high level of obtainment in our customers.

There are four steps involved before completing the order fulfillment:

The first and most important step is making sure there are enough inventories at the restaurant. The operations manager follows the anticipation inventory method, which accounts for an uneven rate of demand or supply. He places the order whenever the reorder point is reached, but since there is a high demand in certain products the operations manager has to bring in more inventory of that specific product on the next reorder. The reorder point varies so there is no set amount of inventory in some occasions. In addition, there are weekly inventory checks. The inventory comes in twice a week on Monday's and Thursday’s however; he (operations manager) must place orders at least three days in advance in order to receive the shipment on time. The three days is the lead time for the raw produce such as lettuce, tomatoes, onions, sprouts, grilled chicken, turkey breast, tuna etc. The order forms are done manually so that you pay close attention to the inventory levels. In contrast, looking at a computer screen one could not see exactly what is occuring with the inventory.

Once the supplies are delivered to the store, the next step involves the food preparer’s who pre-wash, pre-slice, and pre-cut the produce in order to prepare the amount of inventory they anticipate for that particular day. This preparation is done early in the morning. The inventory is stored in the small freezer beneath the food station. That way it is easier and faster to reach the ingredients as needed. Our restaurant has a policy of only three to five minutes waiting time after an order is placed. The customer would place the order through the cashier station. The bakery area also has a cashier station. Shortly after the order is placed, it will appear on a computer screen of the appropriate station. The customer’s specific order will be displayed as well as his or her name. There are a total of two screen monitors in the food area. The food station is divided into four sub-sections. These sub-sections are the salad, cold/hot sandwich, and the soup stations.

  

Once the order is displayed on the food monitor, the food preparer begins to gather the required ingredients in order to assemble the meal which will complete the specified order. Our Panera Bread restaurant essentially uses the assemble-to-order strategy which is the approach to produce a wide variety of products from a relatively few sub-assemblies and components after the customer’s order is received. 

To conclude the order fulfillment process, there is an employee(s) who is in charge of packaging the completed meal. If it is a takeout item the customer’s name is called out in order to instruct the customer to pick up. If the order is to be eaten at the restaurant, the meal will be arranged in a tray accordingly. Usually, there are three to four people working in the food zone depending on the customer volume on that specific day. 

Employee Labor Schedule

Our Panera Bread restaurant uses a system called a labor schedule. The employee labor schedule displays information from the last three weeks regarding sales which permits the operation manager to calculate the average amount of hours an employee must work on a given day. The break down is calculated by half hours. Also, the average break down indicates how many employees need to work for that day. Our Panera Bread bakery-cafe will be utilizing a new employee schedule program called T.M.X. This new system will have the same features and benefits as the pervious program however; the T.M.X. system will display sales forecast on an average three week scale.

Example of Employee Involvement

A “You Pick Two” order encompasses a tuna salad sandwich and a caesar salad. At Panera Bread the term “You Pick Two” means half and half. The employee at the sandwich station will prepare the sandwich. The second worker at the salad post will assemble the salad. Finally, the third employee collects the finished order which will include both the sandwich and salad. He/she will package the order appropriately and call the customer’s name. 

All the steps must be sequentially completed in order to effectively deliver the finished goods to the customer. There is a precedence relationship which means that next activity cannot begin unless the previous task is finished. Therefore, it is crucial for management to be on top of all activities in order to assure that all necessary equipment/tools and inventories are in place so they can achieve their ultimate goal, a high customer satisfaction.

Tools and Equipment

When delivery trucks from Sigma and Fresh Dough Facility delivery the dough and produce to the restaurant, it is unloaded and distributed accordingly to the different freezers. This is done by employees working through the night which eliminates the possible disruptions if it were done during the day when the store is extremely busy. The different freezers are positioned strategically throughout the store in order to provide easy accessibly for the employee.

(Baking section of the restaurant)

In the back of the picture you see a typical Panera Bread oven. After the bread or pastries are baked over-night, the bakers are in charge for prepping the different pastries/bread which will go on the display area of the restaurant. Panera Bread bakers work from 11:00 p.m. to 4:00 a.m! All the bakers will go through a training process and an intensive training regime. They are also certified annually which means that the bakers are required to go through a test each year. This will certify that the bakers are going through the right procedures.

Please click here for a night in a Panera Bread bakery-cafe

(Typical oven at a Panera Bread Restaurant)

The ovens at Panera Bread are designed to bake the bread and pastries to perfection. It is located directly in the back of the bakery section which allows for easy movement to and from the ovens. However, most of the baking is done over-night so during the day the ovens are kept warm in order to keep the bread at a comfortable temperature. 

The freezers at our Panera Bread restaurant are positioned according to where the prepping of the meal is being done. For example, the salad prepping station has three freezers below the counter which is comprised of all the produce necessary to make the particular salad. This allows for less time to be wasted in going to the main freezer to get the ingredients. The sandwich and soup prepping station also has freezers which will be filled with meats, frozen soup ingredients and toppings that are needed to make the various types of specialties at Panera.

Layout of the Main Facilities at Panera Bread

                                        Front Office                                                                                  Back Office

                                                     

Behind Counter

(View looking towards back of restaurant)

Distribution channels for Panera Bread

Fresh Dough Facility

The Fresh Dough Facility provides all the dough for our Panera Bread restaurant. It is located in Fairfield N.J. and is in charge for providing dough to New Jersey, Long Island, Manhattan and Eastern Pennsylvania. Mr. Louis Clein stressed to us that all the dough is made fresh everyday. He must place orders three days in advance in order to allow for the facility to react to fluctuations in orders.

Sigma

Sigma is in charge for providing our restaurant with soups, cold goods and dry products. It is the exclusive distributor for Panera Bread bakery-cafes in regards to these products. Sigma is a critical important for the restaurant because many of the products provided by them are incorporated into the meals, specialty sandwiches, salads and drinks providing by Panera.

V. Recommendations (Problems/Solutions)

Problem 1: More customers are calling Panera's customer service hotline to report negative feedback than those with positive feedback. Management feels this is because more people are inclined to report negative experiences than they are to report positive ones. Panera Bread already has a program set in place where a customer who submits feedback of any kind (good or bad) is put in the running to win a cash prize. However, there is no indication, outside of fine print on the back of every receipt, that this program even exists.

Recommendation 1: Make customers more aware of the contest they already have in place. They can do this one of two ways:

1. One recommendation would be to have their cashiers make the customer aware of the contest. They can accomplish this by simply informing the customer that the program exists, telling them that there is a potential cash prize for their feedback, and then referring them to the back of their receipt for further details.
2. Another recommendation would be to have signs in the store telling the customers to look at the back of their receipts for details on how they can win a cash prize. These signs would better serve their purpose if they were posted around the cash register or the counter where the customer is given their food. This is because many people are likely to discard their receipts after they have gotten their food.

Problem 2: The store's declining cleanliness. Management feels that as a result of the store's age, the overall cleanliness (particularly the ventilation system) is becoming a problem.

Recommendation 2: Update/Renovate the store's interior as well as its ventilation system.

1. Updating the store's interior may be something of an issue to the store's ongoing business. The store would likely have to be closed for a short time in order to accomplish this. The time needed to accomplish this task could be shortened though. By electing to renovate that back part of the store first, they can still keep the front open to sell their products.
2. Updating the ventilation system would be much less invasive. If they elect to update the ventilation system only after-hours and do a small portion at a time every night, they can avoid having to close the store during normal operating hours. The one thing they will have to be careful with is that the bakers bake the bread over night. Obviously the construction would have to be kept as far away from the bakery as possible. When the time comes that the vents above and around the bakery need to be changed, that construction can be done on a Sunday night when the store closes early. Thus giving the construction more time to be completed before the bakers come in.

Problem 3: The employees of the store are continually asking the store's manager for help. Management feels that the employees are relying too heavily on constant assistance from the store's manager. While some of these problems they need help with are justified, many are simple issues that can be resolved without intervention from the manager. This has led to management having less time to focus on more back office tasks.

Recommendation 3: Empower the store's employees. The best recommendation would be for more comprehensive training. While Panera already has impressive training systems, those systems seem to focus almost exclusively on the individual tasks the employees are responsible for and not problem solving. If Panera were to teach their employees ahead of time what to do in certain situations (such as whether a customer is entitled to refund or not) it would eliminate the need to double-check so many things with the store's management.

Problem 4: The elongated shape of the store makes it difficult for customers to find seating. The store front where the customers order and eat their food (as shown by the store layout above) is very skinny and elongated. This had led to instances where customers cannot see that there are more seats deeper into the store. Management is afraid that this may turn off some customers from returning to the store.

Recommendation 4: Make customers aware of the seating in the back of the store. This problem also has more than one potential solution:

1. The best solution for this would be to put up a sign stating that there is additional seating in the back. The optimal place for this sign to be would be at the counter where the customer receives their food.
2. Another recommendation would hinge on whether or not Panera decides to renovate the store. If they do choose to renovate the store, they can push back some of the walls and open up the store a little more. This should give customers a better view of the back area of the store.

VI. Conclusion

In our overall analysis of Panera Bread we learned that every business has differences in how they operate. We learned that not all businesses operate the same way because of the diverse services and products they offer to their customers. Our Panera Bread bakery-cafe provides both quality products and services to their customers. This superb service and products keep customers coming back. Under core competencies, Panera Bread uses the hiring process and customer relationship to select hard working employees with good personalities in order to maintain excellent relationships with customers. Through their efficient use of assembly lines, our Panera Bread restaurant is able to provide healthy foods delivered in a timely manner. The order fulfillment process which Panera Bread uses involves four major steps in order for completion. This process helps management and employees at Panera Bread keep track of inventory and supplies. In our analysis of this particular Panera Bread restaurant, we believe this bakery-cafe is a great place to work at. Management treats employees like family while working together to bring the best out of one another in order to satisfy their customers.

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