analysis of the business operations of the selected company.

The student is requested to choose a company of his or her choice and perform an analysis of the business operations of the selected company. The company can be a manufacturing or a service company, public traded or privately held. The size of the company is not important. The emphasis is on analyzing the different business operations as they are implemented in the company and compare them to what an optimal operations structure would be. The student should take the position of a “business consultant” who is assigned to analyze the current status of the operations, compare the status to a “what would be optimal for the company” and summarize the findings in a strong conclusion and recommendation part or the paper. The paper should be between 10 to 20 pages Plus Table Of Contents And A List Of References. In-N-Out Business Analysis Table of Contents Abstract. 2 Background. 3 Harry and Esther Snyder. 3 Products and Services. 4 Design of Goods and Services. 5 Mission Statement. 5 Inventory Management. 6 SWOT Analysis. 6 Supply Chain Management. 6 Logistics Management. 7 Managing Quality. 7 Ethics and Sustainability. 8 Measuring Performance. 9 Process Strategy. 9 Equipment & Technology. 9 Location Strategy. 9 Conclusion. 10 Recommendations. 10 Works cited.11-12 Abstract The purpose of this paper is to give understand and consult the business methods of California’s premier fast food chain, In-N-Out burgers. The brand has kept their integrity, in a field that usually promotes profits over moral. For over 70 years the company has remained family run, privately held, and not sold out. They have kept loyal employees and customers by setting a bar for high quality and ethical practices Background In-N-Out, is a California based fast food chain serving only the freshest quality burgers while maintaining morals and breaking the norm. Originally established in 1948 in Baldwin Park, California by Harry and Esther Snyder whom wanted to open a drive thru using a two-way speaker box (Perman, 2009) (In-N-Out). According to reports, the Snyder’s opened California’s first drive thru, which was quite different considering most burger joints at the time were using car hops. Their business philosophy was simple: “"Give customers the freshest, highest quality foods you can buy and provide them with friendly service in a sparkling clean environment (In-N-Out)." This is why the company has done so well! After opening their first In & Out in 1948, the Snyder’s waited three years to open another one (Why In-N-Out Works, 2010). This is due to the fact that they wanted to keep tight reigns on their operations and quality of their product. After the death of Harry Snyder in 1976, his sons Guy and Rich stepped in to fill their father’s position. They helped expand the locations from 18 to 93 by 1993, when Rich passed. Guy took the role of presidency and further expanded the locations to 140 until his death in 1999 (Perman, 2009). Guy also helped expand their territory from not only California to Arizona, and Nevada. The company’s current CEO is the only grandchild and daughter of Guy Snyder, Lysni Torres, whom is only 33 years young (Lynsi Torres, In-N-Out president, explains why chain won't expand to the East Coast, 2013). Harry and Esther Snyder Harry and Esther together confounded In-N-Out burger back in 1948. Previously to opening the restaurant Harry was a WWII vet and caterer, and Esther had been a nurse in the navy (Perman, 2009). After getting her degree in Zoology from the University of Seattle, Esther began to manage a restaurant, where she met Harry who was a caterer for a baked goods company. The newlyweds moved back to California in 1948, and opened In-N-Out in Baldwin Park, CA, across from Harry’s childhood home. Products and Services In-N-Out has held its own against the major corporations such as McDonalds and Burger King, selling more per store than the both of them. Due to the fact the company manages their operations with a tight reign. A key aspect is that In-N-Out, believes in having the highest quality food and “associates”, also known as employees (Why In-N-Out Works, 2010). In 1984 Rich opened the In-n-Out University, “where new managers are trained and the In-N-Out formula for success is consistently reinforced.” About 80% of the company’s managers started from the “bottom” of the In-n-Out employee bracket, including the Guy and Rich. In order to attend the University, an “associate” must have worked for at least one full year at a location and be an efficient worker (Why In-N-Out Works, 2010). Rich came up with the idea to cultivate a training process for all employees, including trainee videos. Another tactic Rich at the University is to film employees and then critique on how they could have done it better. Also training is done on-the job during rush times, and constructive feedback is always given. What really sets In-N-Out apart from the rest of the chains is that associates have the prospect of making a career there. Design of Goods and Services The success of In-n-out is attributed to their product design of simplicity and founder’s motto, “Keep it simple, do one thing and do it the best you can.” Therefore that is why they have a simple menu of burgers, fries, and shakes. They do offer variations, such as their “Secret Menu”, which is basically just a different ways to alter your burger. The brilliance of In-n-Out is that have had the same menu for over 70 years! Having a limited menu lets the associates focus on the production line rather than variety of products (Heyn, 2013). The have a quick turnover rate because they are constantly cooking burgers and fries on the grill, and fixing them up for sale. Every associate looks busy at In-N-Out, because the system is balanced and there is not significant variation in the products. Some say that In-N-Out should expand their menu, however even adding one item would definitely slow the process and could cause a chain reaction of congestion Mission Statement In-N-Out’s mission is to provide the highest quality foods and services, provide team-oriented atmosphere whereby goal setting and communication exists, and assist all communities in its marketplace to become stronger, safer and better places for all (In-N-Out). They break the usual standards of a corporation by being family run, non-franchised, and being privately held company (Why In-N-Out Works, 2010). Inventory Management Every day or every other day, fresh products are delivered from trucks, which come directly from one of their distribution facilities. The distribution centers are supplied from selected suppliers in order to maintain strategic position (Tolonen). The ROP of the company is mainly word of mouth. They also give out free stickers and paper caps. During Christmas time, they run a few radio ads keeping with the tradition of the founders. SWOT Analysis In-N-Out burgers have many strengths and weaknesses. As a college student, I find that some of their strengths for me are being fairly cheap, long weekend hours, clean atmosphere, and consistent taste. Some cons are long wait time, privately owned company, limited menu, and not enough locations. Opportunities for In-N-Out could be expanding the amount of stores, increase menu items, become a publicly held company, and provide a full on description of “secret menu” items. Things that could viably hurt the company include: possible meat contamination (i.e. Mad cow disease), competition of other fast food chains, and a rise of concern for health care. Supply Chain Management The thing that really sets In-N-Out apart is their quality supply chain. In the 230 locations, every day the burger buns are freshly baked. The 100 beef burger patties are freshly ground by associates, and the produce is all cut by hand (Bangalore, 2011). The ice cream is made from real milk, and the potatoes are delivered whole then cut by hand. These practices have not changed since the chain started back in 1948. They never use microwaves, heating lamps, and no frozen foods. Every burger is made to order Logistics Management Due to the increasing expansions of territories the company had to develop new distribution centers in order to maintain their standards. One of their newer centers in Las Vegas improved on their loading docks for their trucks delivering to and from restaurants. This function helped keep ingredients fresh, workers stay safe, and maintain keep up with conduct regulated by the government and suppliers (Heyn, 2013). Another improvement of logistics included adding a double insulated dock doors, better lighting, and a master control for the workers using equipment (Heyn, 2013). Managing Quality In-N-Out prides themselves on always maintaining the highest quality control of their food and suppliers. They have many ethical and professional checklists in order to be even considered to be a supplier. The company is vertically integrated on all levels, and that is why they will never be publicly held company or be on the east coast (Why In-N-Out Works, 2010). A key factor is that they keep a fresh quality due to the fact that they are close to their distributors. They maintain service quality by giving employees one task to do, so they are not jumping from machine to machine. For example, one employee is assigned to making fries; another to cooking burgers, and someone else is assigned to taking orders. Ethics and Sustainability In-N-Out is a great company to work for and it shows in their employee turnover rate, which is at a low 12%, one of the lowest in the fast food industry (Perman, 2009). They are even provide with benefits, unheard of in this type of business, such as 401 K plans, paid vacations, dental, and medical (Perman, 2009). Rich Snyder once got consulting from a business group saying that if they slashed their wages the company would “make a ton of money”, which is quickly dismissed. Employees are usually paid $2-3 dollars more than the normal minimum wage of whichever region a restaurant is (Perman, 2009). In terms of ethics regarding employee-manager relationships, all Managers undergo extensive training at In-N-Out University. When Rich Snyder was president of the company in the 1980s, he demanded that they print bible verses on all paper products. To some backlash, the company still prints the verses even after his death in 1993. Measuring Performance The measure of success is obvious every time you step into an In-N-Out location, due to the fact that there is always an abundant amount of customers. Last year they profited $698 billion dollars from all 291 current locations, which averages to $2.44 million dollars per store (Top 100). By not franchising or selling out, they have been consistent which leads to happy customers and employees. Process Strategy The process strategy starts in the “back office”, also known as the kitchen. Like I said before, each employee is given on task to complete a shift, which in turn allows him or her to focus on executing the task at hand properly. Focusing on the product and its simplicity allows for the detail to quality to be the number one priority. Giving employees value by paying them properly gives them a greater incentive to work hard and be a happier human being overall. Developing a good brand image gives customers incentive to believe in the brand and spread good word of mouth. Equipment and Technology In-N-Out uses technology for it food ordering. Every time a customer orders, through either the drive through or inside, it is electronically input through product configuration and production scheduling (Hart, 2012). In an essence the entire fast food industry uses a Just-In-time method, especially the pull and push method. The burger patties are always pre ordered so that there is enough patties for each busy time, and the fries us a push method or the kanban, where they are cut and cooked for immediate use (Hart, 2012). In-N-Out exemplifies the just-in-time method, it mimics the factory method because for the flow to work every employee has a delegated task for it to a progressive cyclical flow. In 2014, the company created the In-N-Out app, which allows users to find the nearest locations and check out the menu. It also allows customers to order from the app so your order is ready for pickup. They use industrial strength grills and fryers, which increases the rate of production (Bangalore, 2011). Location Strategy For many California natives, the first stop after any flight is In-N-Out. This is due to the fact that In-N-Out’s are located only in California, Nevada, and Texas. The strategic locations are because their two major distribution centers are in California and Texas (Lynsi Torres, In-N-Out president, explains why chain won't expand to the East Coast, 2013). It really breaks down to the fact that they want to maintain quality control, exclusivity, competition, and never franchise out. Conclusion In-N-Out is the ideal fast food chain in the world. This is a company that operates with its means and has developed a product design, which meets the demand of the marketplace and competes with the every other competitor. By choosing quality over quantity, they have created a respectable brand admired by loyal employees and customers alike. By keeping a relatively close home base, the company is able to maintain control over all aspects of the growing chain. Recommendations For the most part I admire the entire business model of In-N-Out, however I do have a few recommendations. Firstly, if the company could add another distribution center in the Midwest, possibly expanding their business ten fold. Another recommendation would be adding a few additional secret menu items such as avocado and bacon. In-N-Out should consider sharing the wealth within their communities more; this in turn would be even better for the brand image. Work Cited Perman, S. (n.d.). In-N-Out Burger: Professionalizing Fast Food. Retrieved May 1, 2015, from http://www.bloomberg.com/bw/stories/2009-04-08/in-n-out-burger-professionalizing-fast-food Why In-N-Out Works. (2010, July 21). Retrieved May 4, 2015, from https://theproductivityadvantage.wordpress.com/2010/07/21/why-in-n-out-works/ Hart, M. (2012, May 27). Mike on Manufacturing. Retrieved May 3, 2015, from http://www.mikeonmanufacturing.com/mike-on-manufacturing/2012/05/manufacturing-lessons-from-in-n-out-burger.html Peterson, H. (2013, December 15). Four Reasons Why In-N-Out Burger Won't Expand To The East Coast. Retrieved May 7, 2015, from http://www.businessinsider.com/why-in-n-out-burger-wont-come-to-east-coast-2013-12 Mishra, D. (n.d.). In-N-Out burger, Competitive Advantages, CPEST, SWOT. Retrieved May 7, 2015, from http://www.slideshare.net/divya-mishra/in-nout-burger Schoultz, M. (2013, September 15). Build a Business Growth Strategy Like In-N-Out Burger. Retrieved May 5, 2015, from http://www.digitalsparkmarketing.com/general-business/business-growth-strategy-2/ Perman, S. (2009, April 24). In-N-Out Burger's Marketing Magic. Retrieved May 4, 2015, from http://www.businessweek.com/smallbiz/content/apr2009/sb20090424_877655.htm Heyn, S. (n.d.). Enhancing Safety Up-N-Down. Retrieved May 2, 2015, from http://www.inboundlogistics.com/cms/article/enhancing-safety-up-n-down/ History - In-N-Out Burger. (n.d.). Retrieved May 7, 2015, from http://www.in-n-out.com/history.aspx