POM 102 K LT1Angeles, Yana | De Chavez, Michelle | Go, Steph | Magbanua, David | Ormoc, Julianne | Reyes, Rosario
I. Executive Summary
SaWRAP was formed by a group of close friends composed of 5 juniors and a senior. The group thought that selling a to-go meal would be a good idea since the life of a college student is tedious and has become very mobile nowadays.
However, SaWRAP is not the only to-go meal inside campus. Its key competitors are Panini Time, Speed Pockets, The Galley and Topslice. In order to differentiate its products from these four, SaWRAP used three main marketing strategies. These are the banana leaf packaging in order to be environment-friendly and to prevent spillage of food, Filipino fusion in order to appeal to the majority of the students and homemade goodness to assure good quality and freshness of the food.
The stall uses low cost (cheaper) and rapid response (faster) as their main operations strategy. However, because they are the only stall that offers Filipino flavors, we can also conclude that they also make use of differentiation.
SaWRAPs products are designed in such a way that they are healthy, fulfilling, on the go and environmentally sustainable. They forecast their demand through observation and through their customers as to which product is still worth selling to the public. They also conduct research through acquiring accounts of personal opinions of their customers by talking to them. Furthermore, they keep up with the demand by adjusting some of their products according to the customers wants. With this in hand, it is safe to assume that they do not use an approach similar to the House of Quality to design their products and opt to play things by ear and bring out what their customers want simply by observing the trends and listening to their markets feedback.
The stalls production process involves the use of the Assembly Line. They have three employees, each are assigned to perform a specific task. From our observation, the process used to make the wraps are appropriate but could be improved to ensure the quality of the product, and also, we have observed that none of the processes are automated and the appliances in the stall used is a hand-mixer for the garlic sauce, a griller, a refrigerator, and a warmer.
Currently, the group does not have enough data about the stall in order to know the exact capacity of the stall and even the owners are not sure of their capacities. There is also no current system being implemented to determine capacity requirements.
In addition, the stall has no fixed system in determining demand. What can be observed is that currently, they are using the naive approach in forecasting. Because of this, there are days when they have surplus of wraps. We concluded that it would be better if they use the moving average method to forecast demand because it is the most effective way to predict the demand based on their daily sales.
SaWRAPs current process design is repetitive focus because it has medium volume and medium variety. Our group recommends that they stick to this method but make it more systematic. We arrived on this recommendation by considering a lot of factors which can be seen as you browse through this research. We also concluded that SaWrap can best meet their capacity requirements by keeping a schedule of production and making sure that they strictly follow this schedule every time.
II. Business Profile
SaWRAP started as an idea from a group of close friends composed of 5 juniors and a senior. The concept of selling wraps initiated from the fact that the life of a LS student is tedious and mobile. With all the requirements that have to be met, students often do not take heed to their personal needs, especially hunger. Also taking into consideration the common Filipino saying, Masamang malipasan ng gutom, the group came up with the solution to offer on-the-go meals.
Ownership
The following are the stall owners:MemberRole/s and Responsibilities
Paulo Miguel Dels Z. De LeonInternal AffairsOverlooks everything related to the inner workings of the stall, such as employee relations, making sure that all is well within the confines of the stall. He will also ensure that all the members of the group work in harmony and will work as the mediator in case of disputes.
Angelo Francesco Geb F. HerbosaMarketing HeadGeb will handle the stalls promotions making sure that the stall innovates when called upon, and is also responsible for the stalls public identity and reputation. Additionally, he is in charge of the documentations of the stall, which comes hand-in-hand with its marketing promotions.
John Jacob JJ D. Kaufman
Operations HeadPreviously owning a JSEC stall, JJ will serve as overall head, overseeing the operations of the stall while providing support for every other role. Being operations head, JJ will see to it that the stall runs smoothly, and will iron out any creases if needed.
Gabriel Luis Gabe A. LazoLogistics OfficerResponsible for the smooth transactions of the stall, Gabe will look after the stocks of the stall, and is responsible for coordinating with the suppliers and anything related with the logistics such as the overall design and organization.
Michael Cedric Ley C. Ley
Finance OfficerSeeing to it that the stall is financially sound, Michael is in charge of the monetary division of the stall. All the funds and revenue will pass through him, as he is in charge of the accounting and allocation of the money.
Carmela Regina Mela A. VillacortaExternal AffairsIn charge of SaWRAPs public image, Mela will play a vital role in making sure the stall has the right documentation from the right agencies, be it governmental or within the academe.
Size
The owners shelled out 150,000 pesos as the initial investment for the JSEC stall, each member pitching in 25,000 pesos from their personal savings, depending on the need.
They have three employees namely Medy Mercado, Ramon Vero and Eduardo Paguio. Ate Medy has so far continued her consistency in her duties as the stalls frontman. She has been reliable overall and has not shown signs of weariness. Overall, she has been a vital cog in our stalls operations, as she also contributes to our marketing by attracting customers using her friendly personality. In terms of her contributions in the background, she is vital in keeping tabs of the sales and expenses of the stall. Geb Herbosa (owner) Kuya JR (Ramon Vero) continues to be one of the workhorses of the stall. Working from behind the scenes, the owners has noted that he exerts a lot of effort, given the strenuous job as the person who handles the produce and cooks the meat. In addition to this, his continuous ingenuity in terms of being able to help their cost cutting by making ingredients that they used to buy, as well as his knack for knowing recipes of various cuisines is also very notable. Serving as the other workhorse of the stall, Kuya Eddie (Eduardo Paguio) does most of the physical work. Being in charge solely of wrap production, which is quite a tedious task, he has since gotten used to it fully. With the skills that he has acquired, he now plays an important role in the smooth production of business. Michael Ley (owner)Key Competitors
SaWRAPs key competitors are the stalls (in and out of JSEC) that offer to-go meals. These are Panini Time, Speed Pockets, The Galley and Topslice. To-go food concessionaires in Gonzaga are also included in the list. However, they gained competitive advantage by being the only stall that offers Filipino food to the customers.
Strategy
SaWRAP has three main marketing strategies that they use to reach out to customers. First is the banana leaf packaging. They wanted to show their customers that not only do they want to provide a unique dining experience, but also care for the environment. With that in mind, they thought of using banana leaves as packaging for their wraps. According to them, banana leaves are highly flexible which makes it easy to use as packaging for food items and because of its wax like surface it is able to prevent any spillage. The customers would then be able to enjoy their food without having to worry about getting their clothes dirty and at the same time reduce the non-biodegradable waste people throw everyday.
The second strategy is its Filipino fusion. By integrating Filipino favorites with international delicacies, the stall owners hope to appeal to the taste of the majority of the student population. They believe that this diversity can make for a variety of choices, and will spark curiosity among their customers.
Homemade goodness is their last strategy. Because Filipinos are known for being family-oriented, with this comes the fundamental daily family meal. They believe that we tend to crave for home cooked meals because we are assured of the taste and quality of the food. With that in mind, the stall owners assure their customers with the freshness of each ingredient used in their wraps.
III. The Stores Operations
Operational Overview
The stalls operations strategies are low cost (cheaper) and rapid response (faster). However, at the same time, they also make use of the Differentiation (Better/Different) because they are the only stall that offers Filipino flavors, therefore, gaining competitive advantage over the other stalls. SaWrap primarily offers and sells wraps with fillings that appeal to the Filipino palate. Everything from the filling to their wraps are homemade and these wraps are served in banana-leaf sleeves as to-go meals or snacks with a choice of classic Filipino drinks, like Buko Pandan and Black Gulaman.
Product/Service Design and Forecasting
Majority of the variety of fillings offered are based on popular Filipino cuisine with a little twist. They first conceptualize these flavors through observation and through the demand of their customers. An example of this is the stalls Sisig Gyro as a result of the popular demand of the distinct taste of sisig that was missing from JSEC. The owners were aware of the volatile tastes of their consumers that is why they strive to come up with a different flavor every month. However most of these flavors are scrapped off if the new product does not seem to click with the crowd. Moreover, they also remove items from their menu when they observe that the particular product is doing poorly in sales.
The owners of the stall share responsibilities and are arranged in such a way that they all have equal control over the stalls operations. Store duties involve Finance, Operations, Logistics, Human Relations, and others - each member occupies one position but is flexible enough to interchange their duties given the situation, making sure that everyone is involved in the processes.
The products are designed in a way that it will be healthy, filling, and at the same time environmentally sustainable with the use of banana leaves as the sleeves of the wrap. They strive to incorporate products that jive with their brand concept and identity. Furthermore, they conduct research through acquiring accounts of the peoples opinions by personally talking to their market - as shown exemplified by the development of their Sisig Wraps. To keep up with their customers demands when it comes to having a few adjustments in the wraps product, such as requesting for more filling, they give a little room to add a bit of the vegetables but strictly discourage adding any more filling more than their standard of 100g.
From what could be determined from the interview with the owners, it is safe to assume that they do not use an approach similar to the House of Quality to design their products and opts to play things by ear and bring out what their customers want simply by observing the trends and listening to their markets feedback. Similarly, the owners do not have a fixed method to forecast their demand.
Process Selection
SaWraps production process uses Repetitive Focus. In this type of production process, an assembly line is used, which means that it focuses on the manual or hands-on assembly. Key processes that are undertaken by the stall include buying the ingredients once a week to ensure freshness of the ingredients. On a typical day of operations, it begins with the workers preparing the filling for wraps very early in the morning, prepping the banana leaves and trimming them if needed, and then making the dough for the wraps.
There are two, out of the three, employees present in the stall at a time, the third member could be out buying extra ingredients if they are running low on some instances or doing preparations in case the filling or the wraps are also getting low. When a customer orders a wrap, the cashier first takes account of the order and asks for payment, while telling the other person in the stall who takes a wrap to grill the uncooked wrap and lines it with vegetables, before handing it over to the cashier who puts the filling of choice, assembles it into a wrap, and hands it to the customer. A flowchart is available in the reference section, number 3.
From our observations, the process used to make the wraps are appropriate but could be improved to ensure the quality of the product and also we have observed that none of the processes are automated and the appliances in the stall used is a hand-mixer for the garlic sauce, a griller, a refrigerator, and a warmer.
Capacity Planning
As of now, the group does not have enough data about the stall in order to know the exact capacity of the stall and even the owners are not sure of their capacity. However, the stall owners say that they make around one hundred to two hundred wraps a day but expect to sell around 100-150 wraps. The fillings they make at the start of each day would last for around one hundred wraps. Actual sales are only a little over a hundred, however, there are some days that some ingredients are leftover and are not used. Currently, there is no system implemented to determine their capacity requirements.
IV. Analysis and Recommendations for Improvement
Product Design
In improving the processes involved in designing a product, SaWrap could start with creating a systematic way to conduct their research instead of depending on pure observation and feedback alone. This will serve as a basis to which they could draw their concepts for a new product and also to improve their existing products. These measures will prevent them from constantly wasting their efforts and resources on product designs that may not be what their customers are willing to purchase.
Furthermore, they do not give much consideration for documenting their previous product designs. They could change this by not just scrapping an item because it had a poor sales performance, but also to observe why it did not sell as well as they expected it to, and to adjust their future concept products accordingly.
Granted, SaWrap do make product prototypes and probably taste-tests in order to verify the quality and way the filling tastes with the wrap before selling these new items. However, taste-tests alone may not be enough to verify the marketability of the product.
Drawing from an online survey which the group disseminated beginning December 2013, with forty-one respondents, a recurring problem encountered when eating the product was that it was too messy to eat and that patrons have noticed how difficult it is to eat with the banana leaf sleeves. Also, it was observed from the operations of the stall that the cashier is also the person who folds the wraps in the banana leaves then hands it to the customer, of course, wearing plastic gloves but draws concern to the quality control over the product. These points for concern regarding the product design and operations could be remedied by changing specific steps and measurements used by the stall.
First, it was verified that most of the sauce in the wrap does collect at the bottom where also most of the flavor is found. A good 37% of our respondents claim to have experienced difficulty in eating majority of the items in the menu. A few reasons why this problem occurs are because the sauce is added along with the vegetables and the filling. This step might be done in this particular manner to give aesthetic appeal to the wrap, however it does seem to also be counter-productive as the customer cannot taste the sauce in the first few bites of the wrap. Possible solutions to these problems are to halve the amount of sauce spread inside the wrap and place the other half at the top. This would hypothetically even out the flavor-distribution and also lessen the dripping at the end of the wrap. Another alternative is to pat-dry the vegetables used and to thicken the sauce.
Second, the groups recommendations about the difficulty in the way the product could be eaten is to make people aware that the banana leaves have little grooves that could be individually removed like perforated paper.
And lastly, to ensure the quality of the product, the steps taken could be adjusted so that everything that involves handling the food could be handed over to the other person in the stall.
Demand Forecasting
They have no fixed system in determining demand. What can be observed is that currently, theyre using the naive approach in forecasting. Because of this, there are days when they have surplus of wraps. Their method may not be the most effective in the sense that their products demands vary each day. And since naive approach assumes demand in the next period is the same as demand in the most recent period, their demand forecast would most of the time be inaccurate.The store could improve on their forecasting methodology by using the moving average method. Since there are no trends for their products, this is the best way to forecast their demand. Considering that this is a JSEC stall which lasts only for a year, the seasonal index approach is not applicable since this requires at least 3 years of sales data.According to the stall owners, they are able to sell a little over a hundred wraps per day. This number would be greatly affected only when there are events that occur in campus such as the mass. In order to demonstrate how we plan to forecast the demand, the values used would be rough estimates.
Estimated Daily Sales*
MondayTuesdayWednesdayThursdayFriday
110107112105103
Moving Average Method
Moving Average =
=
=
= Approximately 107 per day
*We decided to disregard Saturdays sales since this would largely affect the daily forecast, resulting to an inaccurate number.
Based on the result, SaWrap would sell more or less 107 wraps per day. Using this methodology would prevent them from making excess wraps that would most probably not be sold.
Process Selection
SaWrap makes their wraps because it is cheaper to make than to buy. There is no specialized equipment necessary. Only direct labor and material costs are required. They also make their own sauce because it is cheaper and more efficient to make. They buy the meat every week in the market and they buy vegetables everyday. It is more efficient to buy these because they do not have the equipment necessary to make their own meat and vegetables.
The current process design that SaWrap uses is repetitive focus because they have medium volume and medium variety. One of the characteristics of repetitive focus is that parts and assemblies are made previously. According to the store owners, all preparations are done in the morning and they just make the wrap with the filling once the customer orders. They make everything from scratch; there are no automated processes. They make their own wraps and sauce because they say it is cheaper. The only technologies they use are hand mixer, griller, warmer, refrigerator, and freezer.
We recommend that they stick to repetitive focus process design because of the on-the-go nature of their stall. However, we recommend that they make the process more systematic. Currently, they only create new products and forecast demand based on their personal observations. Because of this, they have trouble controlling the stores shortage and surplus. Doing more research and fixing their demand forecast can tremendously improve this. They can also try to be more competitive by increasing their sales through marketing as well as price and product adjustment.
The 7 steps for Process Evaluation:
1. Have we kept it simple? SaWraps current system is that they prepare the product upon the customers order. Because of this, each customer can request if they want certain contents to be removed. Each wrap is composed of 100 grams of meat. This is the base of the product and they do not allow for the customers to ask for more meat. However, they allow the customers to ask for more sauce. 2. Is value added in each step? Yes. When the ordered ingredients are delivered, they are cooked in the stall and stored. When someone orders, one employee gets the wrap from the container and heats it. Afterwards, the cashier assembles the wrap with the banana leaf then gives it to the customer. Each step is valuable and necessary for the customers good. They also mentioned that they experience shortage almost as much as they experience surplus, which is why their storage process is satisfactory also. 3. Have we minimized the handoffs? In the event of shortage, they ask their employees to buy ingredients from Katipunan, which is time consuming and more expensive. Therefore, the handoffs are not minimized. Improving the way they forecast the demand can solve this. 4. Is each individual step and responsibility clearly defined? All the members know the process and how each step is done. They have six departments, namely Finance, Operations, Logistics, Marketing, Internal affairs (HR), and documentation. However, they have interchangeable roles, making their individual responsibilities vague. 5. Have we included visual controls and /or fail-safe measures for quality assurance?There is no visual control available in the stall. This is probably because the employees are already trained and they have already memorized the steps. This is also a small-scale business so the room for error is smaller compared to large-scale businesses. Also, we assume that they did not deem it necessary to provide visual controls since there are only 3 employees. However, it is still recommended that they use visual controls for the safety of both the customers and employees. 6. Have we leveraged technology? They have no automated processes and they have no intention of buying more machines because according to them, the school year is about to end. The only appliances they use are hand mixer, griller, warmer, refrigerator, and freezer. 7. How do we monitor throughput and variability?They have precise measurement for each product that they sell. The meat has to be 100 grams. They also make their own wraps so they are able to control the quality of each one. The wrap-making process already serves as early warning systems for quality problems. They check the quality of the meat before they purchase it. They also check for the products quality when they prepare it upon the customers order. Moreover, mid-day checks are conducted to see if everything in the stall is in order. According to one of the managers, when an issue arises, we identify the cause of the issue then determine what we can do to prevent it from happening again.
Capacity PlanningSaWrap can best meet their capacity requirements by keeping a schedule of production and making sure that they strictly follow this schedule every time. Currently, the stall has no problems in meeting their demand. This can be the result of scheduling their daily operations. By cooking the wrap fillings in the morning (around 8AM), and making the wraps simultaneously, they are being very efficient in the sense that they would not panic and be disoriented when orders start to come in. The cooked fillings are placed in food warmers to keep them fresh and hot throughout the day. Also, in this way, it would be easier for them to prepare the wrap whenever a customer decides to order. When the fillings are going low, the staff would make another batch in the middle of the day to avoid shortage. Also, the banana leaves used are cut throughout the day by one of the staff. Since the leaves do not easily wilt, unused leaves can still be used for the following day.
In terms of efficiency, using the formula we derived how efficient the stall is in terms of its current operations.
Efficiency =
=
= 0.71333 or 71%
Currently, they expect a minimum of 100 sales and a maximum of 200. On average, the sales are actually a little over a 100. The store is able to meet the demand. When there is surplus, they store the extras. In the event of shortage, they ask one of their employees to buy the needed ingredients in Katipunan. They calculated how many wraps they can make with a certain amount of beef and they usually make 200. They also adjust the number of products they prepare when there are events like the Holy Spirit Mass and Service Awards.
SaWRAP in response to their capacity exceeding demand in some instances, this second semester they decided to lower the price of their wraps in order to stimulate the JSEC market and introduced new products such as the Piesto and the Sisig Gyro to give more variety to the consumers.
References
I. Major Finished Products(First 4 photos taken from their facebook page [https://www.facebook.com/pages/SaWrap-at-JSEC/182029798610706])
II. Major Work Stations
Preparing the vegetables included in the wrap
Heating the wrap in the electric griller
Wrapping the orderCutting the banana leaves
III. Actual flow chartTake customers order
Ask for payment and give change
Fill wrap with vegetables, filling, and sauceGrill wrap doughTell partner order
Hand to cashier to wrap
Do they want drinks?
What drink do they want?
YES
Get drink from fridge
NO
Hand drink to customer
Wait for order
Give wrap to customer
Fold wrap in Banana leaf sleeve
IV. Facility Layout
1
