Upload
bmadding
View
445
Download
2
Embed Size (px)
DESCRIPTION
Inquiry into Zaxby's corporate operations and strategy for a UGA productivity mgmt course.
Citation preview
Zaxby’sAn Inquiry Into
TOC & Lean Thinking
MGMT 4250 - BlackstoneNovember 21st, 2013
Logan RodmanBrandon AddingtonSean DelagrangeSabrina Alanis
Zaxby’s
History 1990: Zach McLeroy & Tony Townley
The market for fun fried chicken was lacking in Statesboro, GA
They decided to take advantage by providing quality wings and
fingers
They consolidated money and opened first Zaxby’s in college town
of Statesboro
It was a hit! Soon the demand was so great that they had to franchise
just to keep up
They set up headquarters in Athens, GA and began serving their
licensee family
Zaxby’s
Principles Mission: “Consistently create encore experiences that enrich lives one person at a
time.”
Corporate Vision: “Guest-Focused Growth”
Growth through Increased Guest Loyalty
Growth through Developing Talent
Growth through Increased Velocity
Growth through Expansion
Core Values:
Guest-Focused – Our success is linked to satisfied guests. We will keep the guest at the center of everything we do.
Develop Talent – We recognize that people are our most important asset. We strive to attract, motivate, recognize and develop the best, most diverse talent possible.
Operational Excellence – We execute our systems with excellence. We strive to achieve the highest quality possible in everything that we do.
Continuous Improvement – We deliver what we promise, but strive to deliver more than is expected. We will embrace change when it allows us to improve excellence.
Why Zaxby’s?
“We believe our culture is the soul of our brand. From the beginning, Zaxby's has been known for having just the right “combination of great food, a comfortable vibe, and fun people that care about each other.”
Zaxby’s
Leadership
Zach McLeroy – CEO & President
He's been the only CEO since the Zaxby's concept began.
An Athens, Georgia, native, Zach is also an alumnus of the
University of Georgia in Athens.
Tony Townley – EVP & Co-Founder
Tony Townley is one of the "founding fathers" of Zaxby's.
Tony is responsible for the overall fiscal health of the company.
Robert Baxley – COO
Blake Bailey – CFO
Zaxby’s
Profile Fastest-growing chicken chain in the
country
Full-service restaurants in
freestanding buildings that provide in-
store seating and drive-thru windows.
The average restaurant is 3,300 to
3,800 square feet.
Suburban or rural locations with
excellent visibility and access, as well
as strong residential and daytime
populations driven by office, retail
and university environments.
Zaxby’s
System Constraint
Capital Resources:
Without ample funds it is difficult for Zaxby's to expand. While discussing
the issues that Zaxby's is currently facing, we realized how many of their
problems revolved around a lack of capital, which is difficult in an industry
full of wealthy firms. (e.g. McDonalds, Burger King, Taco Bell) The amount
of money that is spent by these firms greatly dwarfs the amount spent by
Zaxby's. Therefore, all of our analysis has revolved around dealing with
issues that help to mitigate or eliminate the problem of having insufficient
capital.
Zaxby’s
1) Systems Goal: “Consistently create encore experiences that enrich lives one person at a time.”
2) Performance Measures: Sales, Labor Cost, Labor Turnover, Avg. Hourly Pay, Food Cost, Stock Vale, Best Selling Items, Sales Per Head, Total Customers, Seating Efficiency, Improvement trends, Quality trends, Development of the workforce
3) Constraint: Capital Resources – Lack of centralized capital resources due to disintegration of capital to franchise level
4) Exploit: Zaxby's Franchising, Inc., actively seeks highly qualified individuals to become Licensees.
5) Subordinate: Prior business experience, financial qualifications, motivation, team spirit and a track record of personal success are all important factors in the evaluation process. Collective net worth of at least $700,000, with liquid assets greater than $400,000. Pass Background Check. Guarantee Obligations. Commitment within 60-90 days of signing agreement. Belief in guest service.
6) Elevate:a) Advertising Cooperatives – Local advertising cooperatives make it possible for a handful of stores to
generate the impact of a major national chain.
b) Purchasing Power – Clout within supply chain reduces cost, boosting profits.
c) Innovative Product Development – Marketable food items invoke consumer excitement, and thus sales.
d) Training – Initial Training Program, Licensee Managed Training Program (ZLC System), Ongoing Coaching
7) Constraint Broken, Return to Step 3: Now that we have broken the constraint, new ones will appear.
Managing Constraints
Zaxby’s
UDE’s1) Zaxby’s sells tangible products requiring a physical location, and is
currently only established in the southeastern United States.
2) The product selection has historically only been chicken based products.
3) The main focus has always been a localized approach at food service.
4) It is hard to monitor and control widely dispersed franchises.
5) Local franchises lack top-down direction and backing.
6) The recent trend of increasing concerns around food-related health risks results in backlash against the fast food industry.
7) It is difficult to retain quality workers while paying low wages that are in line with industry standards.
8) Fiscal and human resources are disintegrated at the local levels, effectually stemming national growth.
9) Zaxby’s experiences limited success, sustainability, and outreach.
10) A gap exists between Zaxby’s being a local establishment and a nationally known brand.
11) Zaxby’s lacks capital and resources.
12) It is difficult to expand while remaining a privately-held company.
Zaxby’s
Current Reality Tree
12. It is difficult to
expand while remaining a
privately-held company.
Core
Problem
11. Zaxby’s lacks capital
and resources.
8. Fiscal and human
resources are disintegrated
at local levels, effectually
stemming national growth.
3. The main focus has
always been a localized
approach at food service.
10. A gap exists between
Zaxby’s being a local
establishment and a
nationally known brand.
4. It is hard to monitor and
control widely dispersed
franchises.
5. Local franchises lack
top-down direction and
backing.
7. It is difficult to retain
quality workers while
paying low wages that are
in line with industry
standards.
1. Zaxby’s sells
tangible products requiring
a physical location, and is
currently only established
in the southeastern U.S.
.
2. The product selection
has historically been only
chicken-based foods.
6. The recent trend of
increasing concerns around
food-related health risks
results in backlash against
the fast food industry.
9. Zaxby’s experiences
limited success,
sustainability, and
outreach.
Leading UDE
Zaxby’s
Evaporating Cloud #1
More central control of franchise
operations and strategy.
More autonomous franchise
owners with the authority to set
strategy and local restaurant
persona.
Tighter control over operations
opens potential for kaikaku and
sets stage for kaizen. Allows for
transformative change without
local obstacles
Less corporate micromgmt of
franchisees allows more time for
brand-wide strategy. More
autonomy empowers licensees.
Licensees act like employee, are
heavily invested with capital, and
best understand local markets.
Unified vision, where
corporate and local franchise
procedures and goals are in
line, facilitating a meaningful
and successful service
experience.
Assumptions:
BD- Corporate management understands TOC and lean thinking, works to implement it, and has a vision for
sustainability.
CD’- The licensees understand operations, are locally fluent, and take their role and capital investments seriously.
DD’- A more centrally operated company is mutually exclusive to a more autonomous and empowered franchise
structure.
Injection: Breaks CD’
Welcome licensees into Zaxby’s corporate culture, have stringent licensee entry barriers, and a heavy capital
investment requirement in place.
A
B
C
D
D’
Objective
Needs WantsUDE #4: It is hard to monitor and
control widely dispersed franchises.
Zaxby’s
Evaporating Cloud #2
Open more stores to cover a larger
area and draw from a larger
customer base.
Continue to focus on current
locations, hoping to improve on
profit margins.
In order to continue to grow and
profit, Zaxby's must be able to
reach a larger audience.
In a price sensitive market, such
as the fast food industry, it is
important to keep costs low so as
to be able to remain competitive.
Be able to sell an affordable
product to a large geographical
area, while maintaining
company values.
Assumptions:
BD- People would choose to stop at the newly opened restaurant.
CD’- It takes a large amount of money to build and advertise for new locations.
DD’- Are mutually exclusive as it is impossible to focus solely on current stores, while opening new ones.
Injection: Breaks CD’
By franchising the business out to independent owners much of the cost, liability, and responsibilities can be
transferred.
A
B D
D’C
Objective
Needs WantsUDE #1: Zaxby’s sells tangible
products that require a physical location,
and is currently only well-established in
the southeastern United States.
Zaxby’s
Evaporating Cloud #3
Zaxby's must become a publicly
traded company, in order for them
to have the financial resources to
compete with the other industry
giants.
Zaxby's must remain privately
owned in order to promote
continuity.
Zaxby's must expand its business
geographically, buy large amounts
of commodity goods, and spend
enough money on advertising to
continue promoting their brand.
Zaxby's must maintain its reliance
on culture as that is important for
them to sustain a competitive
advantage.
Zaxby's is competitive within
its industry, and competing
firms recognize them as a
threat.
Assumptions:
BD- An IPO for Zaxby's would be successful in raising the capital required to take the necessary steps to
compete with industry giants but would cost Zaxby's its corporate leadership.
CD’- Corporate leaders are the reason that Zaxby's has been able to maintain its culture, and therefore its
competitive advantage.
DD’- Are mutually exclusive, the company can't be both publicly and privately owned.
Injection: Breaks BD
Instill policies within the Zaxby's corporation that stresses the importance of maintaining current values and
insure that corporate leaders remain with the company.
B D
D’C
A Objective
Needs WantsUDE #11: Zaxby’s lacks capital
and resources.
Zaxby’s
Generic Cloud
A. Zaxby’s becomes the
most successful fast food chain
by offering affordable products
to the largest customer base,
while staying true to company
values.
.
AB. Becoming a successful fast
food chain relies on
geographical expansion and
reaching a larger audience
through promotion and
advertising..
D. Becoming a publicly traded
company, allow the opportunity
to open more stores and expand
while maintaining central
control over the franchises.
.
B. Zaxby’s should tighten
control over operations, while
expanding geographically by
increasing promotion, in order
to reach a larger audience.
C. They must allow franchisees
more managerial control and
strategy, while keeping costs
low, and maintaining a strong
understanding of local markets.
.
AC. Having franchise-level
managerial control allows for a
better understanding of the local
audience, thus providing the
best opportunity to reach the
largest customer base.
.
CD’2. Franchisee goals are
in line with corporate’s vision.
BD2. Corporate management is
ethical and committed to
Zaxby’s success.
CD’1. Heightened managerial
control for franchisees allows
them to implement a low-cost
strategy due to their greater
understanding of local markets..
BD1. The chance to expand and
reach a larger audience is
increased by becoming a
publicly traded company.
D’. Zaxby’s remains a private
company to keep focus on
continuous improvement in
existing locations and give
franchise owners more
authority.
Zaxby’s
Future Reality Tree – Positive Branch
Licensees are competent
and business savvy.
Zaxby’s invests in
developing licensees.
Less micromanagement
and more empowerment.
Licensees fully
invested.
More centralized control of
franchise operations and
strategy, and a greater
connection to licensees.
Inj: Welcome licensees
into Zaxby’s corporate
culture, have stringent
licensee entry barriers,
and a heavy capital
investment requirement
in place.
Licensees willing to be
more strategically
involved.
Tighter control over
operations allows for
transformative change
without local obstacles
Unified vision, where
corporate and local franchise
procedures and goals are in line.
8. Collaboration of
resources.10. Concrete direction.
9. Success, sustainability, &
outreach.
DE’s UDE’s
8.) Resources are disintegrated to local levels
9.) Limited success, sustainability, and outreach
10.) A gap exists between Zaxby’s being a
local establishment and a nationally known
brand
DE’s
8.) Collaboration of resources
9.) Success, sustainability, and outreach
10.) Concrete direction
Effects can
be realized!
Zaxby’s
Future Reality Tree – Negative Branch
Injection:
Welcome licensees into Zaxby’s
corporate culture, have
stringent licensee entry barriers,
and a heavy capital investment
requirement in place.
Licensees lack understanding of
corporate’s culture and vision
Heavy capital demands will
encourage licensees to take
franchise management seriously.
C. Licensees will behave more
like an invested employee,
promoting Zaxby’s brand &
success.
Franchise owners not
competent brand ambassadors.
More autonomous and
empowered licensees are ridged
and have egos.
Less transparency in
franchise operations.
Zaxby’s corporate must
increase trust and training.
Licensees hurt profit and brand
image.
Franchise managers work
against corporate protocol.
Effects Mitigated
Limit licensee control over
operations.
Effects Eliminated
Go public, increasing
capital and corporate
control over operations.
Injection
Injection
Positive Effect
Neutral Effect
Negative Effect
Zaxby’s
Lean Thinking JIT – Deliver items just as needed.
Zaxby’s is essentially a focused factory in and of itself, focusing production on their competitive advantage, chicken.
Products made at the point of purchase, ensuring maximum freshness, minimal muda, and a pleasurable service experience.
Small-batch logic: Cooked to order products promotes level scheduling, where production is in line with demand and is being pulled by the customer. This process provides faster feedback and will reduce errors because greater attention is required.
Allows for greater variety in product selection, enhancing the food-customer experience, and resulting in high-quality service with low response times.
Performance Measurement – Improvement Approach
Improvement trends, Quality trends, Development of the workforce
Obsolete: Equipment utilization, Worker efficiency, Individual
incentives, Costing on direct labor hours
Continuous Improvement:
1.) Price 2.) Quality 3.) Delivery
Time
Per
form
ance
Zaxby’s
A Lean SystemMulti-skilled workers play a huge role in the JIT philosophy
“That's why all Zaxby's training reflects the latest thinking in the learning industry and includes tools for engaging all the learning styles. Developing talent is one of our core values. We're dedicated to developing talent within our system so our people are positioned to enhance performance.” Initial Training Program, Licensee Managed Training Program (ZLC System), Ongoing Coaching
Programs such as these minimize bad multitasking by cross-training franchise owners in quality initiatives.
Licensee Managed Training Program - provides a scalable resource, enabling licensees to conduct training for their own employees.
Supplier involvement is essential to lean thinking
“Being the fastest-growing chicken chain in the country has its benefits. For starters, it means that we have clout with all the key links in the supply chain. And that translates into favorable food costs for our licensees.” Close vendor ties like the aforementioned enables concurrent engineering of Zaxby’s products and processes.
Total Quality Management (TQM)
TQM is a management approach to long-term success through customer satisfaction. TQM is based on the participation of all members of an organization in improving processes, goods, services, and the culture in which they work, and it begins with upper-level “management commitment.” Annual Conferences, Zaxby’s Advisory Council, Ad Campaigns and Cooperatives, Pre-Opening Assistance,
Opening Teams
“Variety is the spice of life”
One of Zaxby’s key competencies is their innovative product development (Core menu and Limited Time Offers). There are small windows to introduce new products or services, so the faster a company comes out with new
ideas, the shorter the response times for committing these to customers, and a higher price can be charged.
Zaxby’s
Recommendations In order to “consistently create encore experiences that enrich lives one
person at a time,” Zaxby’s must remain true to their lean initiative of
operational excellence and continuous improvement
Establish heavy capital requirements for all potential licensees
Welcome new franchise owners into corporate culture, and strengthen a fundamental
understanding of the overall vision
Elevate current leadership and promote a nationally engaged franchise base
News“Georgia chicken chain Zaxby’s to open 18 Utah locations”
Zaxby’s plans to open 18 Utah locations in the next five years under the management of
a Nevada-based group.
Zaxby’s which has more than 575 restaurants in 13 mostly southern states, is expanding
its brand westward.