Case 5 Sunshine Enterprise

I. Problem
Main Problem: How can Abby improve its quality management while planning for the
expansion?
Secondary problem:
What actions should the management take to resolve the current $25 dollar dilemma?
II. Point of View: Abby Martin(Owner)
III.Assumptions
a.

Problem in record keeping

b.

2009(credit crunch, high judicial foreclosure rates)

c.

All 6 branches are located in Southwest Florida (map, reputation in SF, expansion in

Orlando, Tampa)
d. Currently does not use lean operation
e. Each restaurant has a unique name
f. Customer is drunk(drink alcohol responsibly)
IV.

Analysis

Main: Cost Benefit Analysis (Qualitative)

Company Strategy Analysis
Currently, Abby Martin manages her restaurants quality through visiting the restaurants every
few days and closely observing customers behavior and checking the overall ambiance and
cleanliness of the restaurant. She also ensures close contact and direct communication with her
staff to ensure that they are performing well at work and to know more about the problems
directly encountered by the staff. The way Abby Martin handles her six restaurants (i.e. handson restaurant management) is effective but does not ensure efficiency especially when she
decides to push through with the expansion of Sunshine Enterprises in the Tampa and Orlando
areas.
To further gain an understanding about Sunshine Enterprises operations, a SWOT analysis
(see table below) of the totality of Sunshine Enterprises was conducted.

SWOT Analysis of Sunshine Enterprises

STRENGTHS

WEAKNESSES

Diversified/customized
concepts

according

restaurant Individual ordering and shipment of items

to

local

market

demographics

for each unique restaurant

Customers from other areas of Florida

Superior service and food quality in

have to travel far to get to Sunshine

Southwest Florida branches

Enterprise restaurants

Strategic location of the restaurants

Problem encountered with Mr. Otter

1/100 customer complaint

Reasonable pricing
Consistency in providing service
OPPORTUNITIES

THREATS

Expansion in other areas in Florida (e.g.

Competition within the industry

Tampa and Orlando)

Changing consumer behavior/tastes

Taking advantage of the current health

Decrease in consumer spending due to

trend

recession

Expand

services

and

variety

of

products/menus
STEP Analysis
Social
Consumers are becoming more health conscious
Varied demographics in different areas in Florida
Technological
Technological advancements in restaurant facilities
Automation of business transactions
Online ordering
Economic
Low interest rates due to recession
Post-recession shift in consumer behavior (i.e. reduced spending)
Political
Government regulations regarding health and food standards

In deciding whether or not to push through with the expansion of Sunshine Enterprises in the
Tampa and Orlando areas, the costs and advantages entailed by doing so should be
considered.
Cost-Benefit Analysis of Planned Expansion
COSTS

BENEFITS

High start-up costs (e.g. building, utilities,

Increase in revenue

and equipment)

Low interest rates due to recession

Additional maintenance costs

Leverage expertise

Divided attention (time consuming)

Exposure to wider audience (i.e. being

Employee training and additional payroll

able to tap into new customer markets)

expenses

and establish customer base

Uncertainty in gaining customers in the

Build business value

new area

Achieve

economies

of

scale

(cost

reduction advantage)
Sunshine Enterprises currently employs a traditional payment system which is a paper-based
mechanism of accepting customer payments. When making payments through credit cards, the
cashier facilitates it and prepares two copies of the receipt (i.e. one for the customer and the
other for restaurant documentation). The customer is then asked to verify the amounts recorded
on the receipt by letting him sign on it. If a customer notices a discrepancy, the customer should
inform the cashier to correct it accordingly. When giving tips through the use of credit cards, the
customer should write the amount of the tip on the receipt with his signature on it. A problem
arises when a restaurant personnel alters the amount written on the receipt.
++explanation of current payment system

Cause and Effect Diagram

A fishbone diagram will help analyze the 25-dollar problem. This diagram aims to trace the
possible causes in 5 separate categories which are Environment, Machine, Man, Method and
Material. Under the environment category, a possible cause is that the restaurant doesnt uphold
standards of quality and ethics which may cause the rise of fraudulent tip. For the payment
method that the restaurant apply in their operation, there is no additional layer of security. When
the customer loses her receipt, the manager ends up with no alternative way to verify the
amount and its breakdown in the receipt. Moreover, there is also no additional security to verify
the amount of tip aside from cross referencing it to the customer. An additional security is
needed specially when the customer is drunk, in which case waiters have higher possibility of
doing fraudulent acts.
The manual way of adding tip is the most obvious cause of the problem. By implementing
paper-based and manual-based of payment system, waiters can easily change the amount. The
company should also improve its record keeping. It must have records of the breakdown and
total amount of receipt. In that way, manager can easily review and check operations of the
company. If feasible, the company should change its payment system to a more handy and
automatic equipment.

All of the parties involved in the problem have a share in the causes. The customer should have
written the amount of tip comprehensibly and should have checked the receipt before leaving
the restaurant. The integrity of waiter is in question. As for the credit company, it would be better
if they can give the breakdown of the amount. In doing do, feasibility and permission from
customer must be acquired. Moreover, the manager should fail-safe the problem instead of
pointing out that he cant do anything. Customer satisfaction is an ingredient to companys
success. The manager should offer alternative ways to solve the problem.
Value Chain Perspective
Comp

Suppliers

Inputs

Transformati

any

Outputs

Customer and

on process

Market
Segments

Resta

urant

Fo

Or

Store

od

oo

der

oo

Whole

taking

saler

Eq
uipme
nt/Ma
chine

ra

In-

w
m
at
eri
al

es(extr

cu

sales
*H

sto

es,

any

atering

py

er

comp

servic

me

card

ne in)
*C
and group

servic

edit

ap

Cr

seating(Di

store

suppli

In-

ne

servic

rg

y/

breakd

La

own

bo

solutio

n)

ome
Delivery

ual
ity
ser
vic

Bill

qu

payme

ip

nt and

R
ec

recordi

ord

en

ng

Fo
od

ay

produc

tion

en

and

packa

se

ging

rvi
ce
*-not stated in the case, but usual
Value of a loyal customer
The value of a loyal customer (VLC) quantifies the total revenue or profit each target market
customer generates over the buyers life cycle.
Customer defection rate is 5-10%
Average buyers life cycle
Repurchase frequency is one visit every two months or 6 times a year
Contribution to profit and overhead per restaurant is 35%
Lunch price range: $10-$20
Dinner price range: $20-$30
VLC low =(10)(6)(.35)(1/.1)=$210
VLC Upper=(30)(6)(0.35)(1/.05)=$1260
(Tama ba? Pa-check naman hehe :))

LEAN OPERATION AND SIX SIGMA

Lean operations have a long history in manufacturing industries but nowadays, it is
already streamlining service sector processes. Although its more difficult to apply it in the latter

sector, the results have proven it to be effective in reducing costs and making customers
happier. On the other hand, Six Sigma is founded on controlling defects. Although the use of
one or the other is effective in quality management, combining Six Sigma with lean principles
creates a powerful process to provide the customers with the highest-quality service.
Because Sunshine Enterprise provides interaction-based services, customers need
more personal care and attention. Quality is paramount to the company. Restaurants, in
general, deal with wastes on a day to day basis. Not just physical wastes such as excess raw
materials but also anything that does not add value to the service provided. Sunshine Enterprise
can eliminate these wastes by utilizing lean, six sigma or both methodologies in order to provide
quality service at the fastest speed with far less compromise.
Excess raw materials are common to this type of business. As a result, inventory control
is an important factor that needs to be monitored in restaurants. Because it is one of the biggest
waste factors, it consequently results to higher expenses. Given that Sunshine Enterprise
usually orders in bulk, the possibility of wastes is just around the corner. Streamlining these
methods aims to minimize the food or ingredients that are spoiled before used.
Analyzing the layout of the restaurant is also a process utilized in Lean and Six Sigma
methodologies. It offers the best layout possible in order to ensure that the flow of employees
and services do not collide with one another and create service interruptions. Sunshine
Enterprise uses different concepts in its restaurants which includes differences in facility decor,
size and layout. The company needs to attain the optimal layout that will reduce such wastes in
services provided.
*Centralize database reduce time it takes to solve customer problems ($25)
*wifi - recomm
++JIT, ambiance: cleanliness and WIFI
CUSTOMER SATISFACTION MODEL

Although there are many factors affecting customer satisfaction, studies show that perceived
value, customer expectations and perceived quality are the key factors that lead to customer
satisfaction and ultimately, customer loyalty. Customer satisfaction has always been highlighted
as an important concern for service companies like Sunshine Enterprises. Not only does it
translate to more profits but it also has an overall impact on the brands equity. Customer
satisfaction, as defined by Hansemark and Albinson, is the overall customer attitude or
emotional reaction to the difference between the service they anticipated and the service they
received. Any successful hospitality business banks on customer satisfaction because it leads to
repeat purchases and eventually, customer retention and loyalty.
Sunshine Enterprises aim to provide quality services because customers expect to receive the
value of the price they pay. Satisfied customers influence positive word of mouth marketing. On
the other hand, dissatisfied customers like Mr. Otter can have a negative impact on the
company in general. Companies should develop strategies in handling these dissatisfied
customers to prevent losing them. However, the company should ensure that they still do so
with care and value for the customer.
GAP MODEL
Analysis of Some Possible Gaps on Quality Management
In connection with the customer satisfaction model aforementioned, one of the analysis
tools used by the group to analyze Sunshine Enterprise is the gap model of service quality. It is

an important customer-satisfaction framework that highlights the main requirements for

delivering a high level of service quality by identifying the gaps that lead to unsuccessful service
delivery.
Gap 1: Knowledge Gap
(Between customer
expectations and
management perceptions
of those expectations)

Management perceives that the customer expects and wants

delicious and affordable food. But in reality, the customer may be
concerned with the treatment and responsiveness of personnel
whenever problems arise.

Gap 2: Standards Gap

(Between management
perceptions of a target
level of quality and the
task of translating these
perceptions into
executable specifications)

Management perceives a target level of quality standard. But

then with training and guidance of personnel, it is not properly
implemented and feedback is not properly taken into action.

Gap 3: Delivery Gap

(Between quality
specifications and their
implementations)

Management may train personnel to react fast to problems to

avoid negative customer goodwill. But then, it is not specified
how fast to respond, which in return creates inefficiencies in
service delivery.

Gap 4: Communication
Gap (Between actual
delivery performance and
external communications
with the customer)

The Sunshine Enterprise may look clean and its menu may look
filling and delicious in company brochures and other promotional
materials. But in reality, the restaurant may be dirty and not well
ventilated, and the food may be served differently in an
unpleasant way.

Gap

5:

Service

(Between
expectations
perceptions)

Gap This arises when customers misinterpret the intention of

management. An example would be personnel keep asking
customers
customer if there are anymore concerns, but the customer may
and interpret that the personnel is very annoying and just wants
additional tip.

Known for customizing its business for diverse local needs, its reputation in Southwest
Florida for superior service and food quality shows that the firm has favorably addressed these
gaps. Abbys entrepreneurial skills and her own approach on quality control strongly supports
this claim. This is also backed by internal data that there is 1 over 100 negative customer
complaint per customer comment.
++anytime anywhere, centralized database, so no need to get reports from
managers
V.

Recommendation

ERIK

E-nsure to resolve Mr. Otters complaint

R-evamp the old payment scheme
(include the customer strategy)
I-implement lean operation
K-keep up with the ERP trend
(25 dollar short term)
In fail-safing the customers complaint about the waiter adding a $25 tip on his bill, whether or
not it was the customers fault, Mr. Gladiolus should apologize to him for such incident and
assure that the problem will be addressed immediately. In that way, the customer will feel that
Mr. Gladiolus understands his frustration and values customers concerns. This will also help
mitigate further complications with the customer. In addition, Mr. Gladiolus should involve the
customer in deciding what steps to take to resolve the problem in order to avoid
overcompensation. If the customer lets Mr. Gladiolus decide, he may offer him the following as
compensation:
(1) Refund half of the 25 dollars
(2) Gift certificate for a future meal
(3) Discount coupons

To avoid encountering such problems in the future, Abby Martin should implement a new credit
card payment scheme that involves better control over payments.
(New equipment)
To improve the payment system, we are suggesting a new equipment.
(pic)
Through this payment system, the waiter will bring the equipment to the table and allow the
customer to swipe and enter the pin. It will also allow the customer to see and check the inputs
made by the waiter. In this way, the customer can see if the inputted bill and tip is correct. This
will also be integrated to the ERP system. This small equipment is feasible since it will not cost a
lot considering the current trends in technology.
(company strategy) To improve the operation of the company, we recommend to delegate the
execution of quality management to the manager of each branch. With this strategy, Abby
Martin can focus on planning the expansion.

Long term: Lean operation, ERP

Lean Operation
Sunshine Enterprises should implement a lean operation system. First, we propose that
Sunshine Enterprises utilize a JIT System. As mentioned earlier, excess materials is a common
problem for the company. They need to minimize the food or ingredients that are spoiled before
used to also reduce expenses.
Second, we recommend that Sunshine Enterprises continue customizing their business
to local needs and local market demographics. However, they should

Enterprise Resource Planning

Sunshine Enterprise having six restaurants with the plan of expansion must consider the
use of Enterprise Resource Planning (ERP). Being in the business for decades, the firm must
scrutinize its resources and capabilities for the implementation of ERP, as to competently
compete in the market with new technological advancements. It is about time that Abby think of
integrating business functions into one information system to efficiently and effectively utilize its
business potential while expanding.
ERP involves integrating and automating order fulfillment, billing, Customer Relationship
Management, Human Resources, Supply Chain Management and others. Real time information
to be derived here is accessible, reliable and easily shared that can be used in management
decisions such as inventory purchasing and CRM which in return will enhance productivity. ERP
addresses issues such as lack of cohesion between departments, integration of company
resources and information, database for company records and accessibility and work flow for all
employees. There will be a centralized database where information can be accessed anytime.
With the possible expansion of the six restaurants in Southwest Florida, ERP will be
favorable in managing huge amounts of information that will in return produce data for Abby and
managements decision making.
What-Adds-Value
The following table shows the different opportunities that the company can take. The
recommendation column explains how the different opportunities can be implemented through
ERP and lean system.

Category

Opportunity

Recommendation

Essential

Better tasting food

.The

Better services

leadership in offering only the best

Improve

vicinity

or

company

should

uphold

better by improving the quality of their

environment(cleanliness, theme)

products

and

services

by

Record management

employing

lean

operation

and

Paying terms

ERP. The new equipment will

Free Wifi

improve the payment system. The

company should also improve the
ambiance

by

maintaining

cleanliness and offer free Wi-Fi.

Incremental

Assignment of waiter per table

the

supply

Improved ordering of raw materials(and implementing

JIT

setting

terms

with

supplier

Improve

chain

by

system.

offering Moreover, in serving the customer,

lowest cost)

each table must have an assigned

waiter.

Sustaining

Apply and maintain a liquor license

Ensure liquor license

Waste

Minimize food spoilage

By using JIT system, there will be

fewer food spoilage.

VI.

Lessons learned love

-Customer Satisfaction
-The customer deserves an explanation. The customer deserves an acceptable reason
The key to companys success is customer satisfaction. Just like in love, the manager should try
to explain and reconcile the problem with the customer.
In a relationship, may tampuhan at walang perfect relationship. But you can always try to
improve and reconcile your differences
In running a business, we can try to offer the best but we can still fail. There will always be room
for improvement.

once satisfied, theyll crave for more

Trust! Big word
In a relationship, may tampuhan at walang perfect relationship. But you can always try to
improve and reconcile your differences
You can try to offer everything, but you can still fail and get hurt.
-adapt sa technology
parang love, dapat palitan and update from time to time
kung wizzie talaga, there are other options that will love you back
-before expansion,make sure stability
Try to fix, before you move on
kung hinde tayo kikilos, sino? kailan?
Ang mundo ay isang malaking Quiapo. Maraming snatcher, maaagawan ka. Lumaban ka
Additional Info:
Pre-recession wage: 12.70????
Post-recession wage: 15.07, therefore not high end
Florida-Diverse
Strength: Customize business
11am-10pm is this normal?
20-30 wines in stock
Inventory: each for unique products, economies of scale
Meet with chef every week
Superior servce and food quality in southwest, florida
http://www.shmula.com/lean-thinking-and-restaurant-operations/2845/
http://www.flowmakers.com/articles/articlefoodindustryandkaizen.pdf

RECOMMENDATION:

Case 5 Sunshine Enterprise

I. Problem
Main Problem: How can Abby improve its quality management while planning for the
expansion?
Secondary problem:
What actions should the management take to resolve the current $25 dollar dilemma?
II.

Point of View: Abby Martin(Owner)

III.

Assumptions

a.

Problem in record keeping

b.

2009(credit crunch, high judicial foreclosure rates)

c.

All 6 branches are located in Southwest Florida (map, reputation in SF, expansion in

Orlando, Tampa)
d. Currently does not use lean operation
e. Each restaurant has a unique name
f. Customer is drunk(drink alcohol responsibly)
IV.

Analysis

Main: Cost Benefit Analysis (Qualitative)

Company Strategy Analysis
Currently, Abby Martin manages her restaurants quality through visiting the restaurants every
few days and closely observing customers behavior and checking the overall ambiance and
cleanliness of the restaurant. She also ensures close contact and direct communication with her
staff to ensure that they are performing well at work and to know more about the problems
directly encountered by the staff. The way Abby Martin handles her six restaurants (i.e. handson restaurant management) is effective but does not ensure efficiency especially when she
decides to push through with the expansion of Sunshine Enterprises in the Tampa and Orlando
areas.
To further gain an understanding about Sunshine Enterprises operations, a SWOT analysis
(see table below) of the totality of Sunshine Enterprises was conducted.

SWOT Analysis of Sunshine Enterprises

STRENGTHS

WEAKNESSES

Diversified/customized
concepts

according

restaurant Individual ordering and shipment of items

to

local

market

demographics

for each unique restaurant

Customers from other areas of Florida

Superior service and food quality in

have to travel far to get to Sunshine

Southwest Florida branches

Enterprise restaurants

Strategic location of the restaurants

Problem encountered with Mr. Otter

1/100 customer complaint

Reasonable pricing
Consistency in providing service
OPPORTUNITIES

THREATS

Expansion in other areas in Florida (e.g.

Competition within the industry

Tampa and Orlando)

Changing consumer behavior/tastes

Taking advantage of the current health

Decrease in consumer spending due to

trend

recession

Expand

services

and

variety

of

products/menus
STEP Analysis
Social
Consumers are becoming more health conscious
Varied demographics in different areas in Florida
Technological
Technological advancements in restaurant facilities
Automation of business transactions
Online ordering
Economic
Low interest rates due to recession
Post-recession shift in consumer behavior (i.e. reduced spending)
Political
Government regulations regarding health and food standards

In deciding whether or not to push through with the expansion of Sunshine Enterprises in the
Tampa and Orlando areas, the costs and advantages entailed by doing so should be
considered.
Cost-Benefit Analysis of Planned Expansion
COSTS

BENEFITS

High start-up costs (e.g. building, utilities,

Increase in revenue

and equipment)

Low interest rates due to recession

Additional maintenance costs

Leverage expertise

Divided attention (time consuming)

Exposure to wider audience (i.e. being

Employee training and additional payroll

able to tap into new customer markets)

expenses

and establish customer base

Uncertainty in gaining customers in the

Build business value

new area

Achieve

economies

of

scale

(cost

reduction advantage)
Sunshine Enterprises currently employs a traditional payment system which is a paper-based
mechanism of accepting customer payments. When making payments through credit cards, the
cashier facilitates it and prepares two copies of the receipt (i.e. one for the customer and the
other for restaurant documentation). The customer is then asked to verify the amounts recorded
on the receipt by letting him sign on it. If a customer notices a discrepancy, the customer should
inform the cashier to correct it accordingly. When giving tips through the use of credit cards, the
customer should write the amount of the tip on the receipt with his signature on it. A problem
arises when a restaurant personnel alters the amount written on the receipt.
++explanation of current payment system

Cause and Effect Diagram

A fishbone diagram will help analyze the 25-dollar problem. This diagram aims to trace the
possible causes in 5 separate categories which are Environment, Machine, Man, Method and
Material. Under the environment category, a possible cause is that the restaurant doesnt uphold
standards of quality and ethics which may cause the rise of fraudulent tip. For the payment
method that the restaurant apply in their operation, there is no additional layer of security. When
the customer loses her receipt, the manager ends up with no alternative way to verify the
amount and its breakdown in the receipt. Moreover, there is also no additional security to verify
the amount of tip aside from cross referencing it to the customer. An additional security is
needed specially when the customer is drunk, in which case waiters have higher possibility of
doing fraudulent acts.
The manual way of adding tip is the most obvious cause of the problem. By implementing
paper-based and manual-based of payment system, waiters can easily change the amount. The
company should also improve its record keeping. It must have records of the breakdown and
total amount of receipt. In that way, manager can easily review and check operations of the
company. If feasible, the company should change its payment system to a more handy and
automatic equipment.

All of the parties involved in the problem have a share in the causes. The customer should have
written the amount of tip comprehensibly and should have checked the receipt before leaving
the restaurant. The integrity of waiter is in question. As for the credit company, it would be better
if they can give the breakdown of the amount. In doing do, feasibility and permission from
customer must be acquired. Moreover, the manager should fail-safe the problem instead of
pointing out that he cant do anything. Customer satisfaction is an ingredient to companys
success. The manager should offer alternative ways to solve the problem.
Value Chain Perspective
Comp

Suppliers

Inputs

Transformati

any

Outputs

Customer and

on process

Market
Segments

Resta

urant

Fo

Or

Store

od

oo

der

oo

Whole

taking

saler

Eq
uipme
nt/Ma
chine

ra

In-

w
m
at
eri
al

es(extr

cu

sales
*H

sto

es,

any

atering

py

er

comp

servic

me

card

ne in)
*C
and group

servic

edit

ap

Cr

seating(Di

store

suppli

In-

ne

servic

rg

y/

breakd

La

own

bo

solutio

n)

ome
Delivery

ual
ity
ser
vic

Bill

qu

payme

ip

nt and

R
ec

recordi

ord

en

ng

Fo
od

ay

produc

tion

en

and

packa

se

ging

rvi
ce
*-not stated in the case, but usual
Value of a loyal customer
The value of a loyal customer (VLC) quantifies the total revenue or profit each target market
customer generates over the buyers life cycle.
Customer defection rate is 5-10%
Average buyers life cycle
Repurchase frequency is one visit every two months or 6 times a year
Contribution to profit and overhead per restaurant is 35%
Lunch price range: $10-$20
Dinner price range: $20-$30
VLC low =(10)(6)(.35)(1/.1)=$210
VLC Upper=(30)(6)(0.35)(1/.05)=$1260
(Tama ba? Pa-check naman hehe :))

LEAN OPERATION AND SIX SIGMA

Lean operations have a long history in manufacturing industries but nowadays, it is
already streamlining service sector processes. Although its more difficult to apply it in the latter

sector, the results have proven it to be effective in reducing costs and making customers
happier. On the other hand, Six Sigma is founded on controlling defects. Although the use of
one or the other is effective in quality management, combining Six Sigma with lean principles
creates a powerful process to provide the customers with the highest-quality service.
Because Sunshine Enterprise provides interaction-based services, customers need
more personal care and attention. Quality is paramount to the company. Restaurants, in
general, deal with wastes on a day to day basis. Not just physical wastes such as excess raw
materials but also anything that does not add value to the service provided. Sunshine Enterprise
can eliminate these wastes by utilizing lean, six sigma or both methodologies in order to provide
quality service at the fastest speed with far less compromise.
Excess raw materials are common to this type of business. As a result, inventory control
is an important factor that needs to be monitored in restaurants. Because it is one of the biggest
waste factors, it consequently results to higher expenses. Given that Sunshine Enterprise
usually orders in bulk, the possibility of wastes is just around the corner. Streamlining these
methods aims to minimize the food or ingredients that are spoiled before used.
Analyzing the layout of the restaurant is also a process utilized in Lean and Six Sigma
methodologies. It offers the best layout possible in order to ensure that the flow of employees
and services do not collide with one another and create service interruptions. Sunshine
Enterprise uses different concepts in its restaurants which includes differences in facility decor,
size and layout. The company needs to attain the optimal layout that will reduce such wastes in
services provided.
*Centralize database reduce time it takes to solve customer problems ($25)
*wifi - recomm
++JIT, ambiance: cleanliness and WIFI
CUSTOMER SATISFACTION MODEL

Although there are many factors affecting customer satisfaction, studies show that perceived
value, customer expectations and perceived quality are the key factors that lead to customer
satisfaction and ultimately, customer loyalty. Customer satisfaction has always been highlighted
as an important concern for service companies like Sunshine Enterprises. Not only does it
translate to more profits but it also has an overall impact on the brands equity. Customer
satisfaction, as defined by Hansemark and Albinson, is the overall customer attitude or
emotional reaction to the difference between the service they anticipated and the service they
received. Any successful hospitality business banks on customer satisfaction because it leads to
repeat purchases and eventually, customer retention and loyalty.
Sunshine Enterprises aim to provide quality services because customers expect to receive the
value of the price they pay. Satisfied customers influence positive word of mouth marketing. On
the other hand, dissatisfied customers like Mr. Otter can have a negative impact on the
company in general. Companies should develop strategies in handling these dissatisfied
customers to prevent losing them. However, the company should ensure that they still do so
with care and value for the customer.
GAP MODEL
Analysis of Some Possible Gaps on Quality Management
In connection with the customer satisfaction model aforementioned, one of the analysis
tools used by the group to analyze Sunshine Enterprise is the gap model of service quality. It is

an important customer-satisfaction framework that highlights the main requirements for

delivering a high level of service quality by identifying the gaps that lead to unsuccessful service
delivery.
Gap 1: Knowledge Gap
(Between customer
expectations and
management perceptions
of those expectations)

Management perceives that the customer expects and wants

delicious and affordable food. But in reality, the customer may be
concerned with the treatment and responsiveness of personnel
whenever problems arise.

Gap 2: Standards Gap

(Between management
perceptions of a target
level of quality and the
task of translating these
perceptions into
executable specifications)

Management perceives a target level of quality standard. But

then with training and guidance of personnel, it is not properly
implemented and feedback is not properly taken into action.

Gap 3: Delivery Gap

(Between quality
specifications and their
implementations)

Management may train personnel to react fast to problems to

avoid negative customer goodwill. But then, it is not specified
how fast to respond, which in return creates inefficiencies in
service delivery.

Gap 4: Communication
Gap (Between actual
delivery performance and
external communications
with the customer)

The Sunshine Enterprise may look clean and its menu may look
filling and delicious in company brochures and other promotional
materials. But in reality, the restaurant may be dirty and not well
ventilated, and the food may be served differently in an
unpleasant way.

Gap

5:

Service

(Between
expectations
perceptions)

Gap This arises when customers misinterpret the intention of

management. An example would be personnel keep asking
customers
customer if there are anymore concerns, but the customer may
and interpret that the personnel is very annoying and just wants
additional tip.

Known for customizing its business for diverse local needs, its reputation in Southwest
Florida for superior service and food quality shows that the firm has favorably addressed these
gaps. Abbys entrepreneurial skills and her own approach on quality control strongly supports
this claim. This is also backed by internal data that there is 1 over 100 negative customer
complaint per customer comment.
++anytime anywhere, centralized database, so no need to get reports from
managers
V.

Recommendation

ERIK

E-nsure to resolve Mr. Otters complaint

R-evamp the old payment scheme
(include the customer strategy)
I-implement lean operation
K-keep up with the ERP trend
(25 dollar short term)
In fail-safing the customers complaint about the waiter adding a $25 tip on his bill, whether or
not it was the customers fault, Mr. Gladiolus should apologize to him for such incident and
assure that the problem will be addressed immediately. In that way, the customer will feel that
Mr. Gladiolus understands his frustration and values customers concerns. This will also help
mitigate further complications with the customer. In addition, Mr. Gladiolus should involve the
customer in deciding what steps to take to resolve the problem in order to avoid
overcompensation. If the customer lets Mr. Gladiolus decide, he may offer him the following as
compensation:
(1) Refund half of the 25 dollars
(2) Gift certificate for a future meal
(3) Discount coupons

To avoid encountering such problems in the future, Abby Martin should implement a new credit
card payment scheme that involves better control over payments.
(New equipment)
To improve the payment system, we are suggesting a new equipment.
(pic)
Through this payment system, the waiter will bring the equipment to the table and allow the
customer to swipe and enter the pin. It will also allow the customer to see and check the inputs
made by the waiter. In this way, the customer can see if the inputted bill and tip is correct. This
will also be integrated to the ERP system. This small equipment is feasible since it will not cost a
lot considering the current trends in technology.
(company strategy) To improve the operation of the company, we recommend to delegate the
execution of quality management to the manager of each branch. With this strategy, Abby
Martin can focus on planning the expansion.

Long term: Lean operation, ERP

Lean Operation
Sunshine Enterprises should implement a lean operation system. First, we propose that
Sunshine Enterprises utilize a JIT System. As mentioned earlier, excess materials is a common
problem for the company. They need to minimize the food or ingredients that are spoiled before
used to also reduce expenses.
Second, we recommend that Sunshine Enterprises continue customizing their business
to local needs and local market demographics. However, they should

Enterprise Resource Planning

Sunshine Enterprise having six restaurants with the plan of expansion must consider the
use of Enterprise Resource Planning (ERP). Being in the business for decades, the firm must
scrutinize its resources and capabilities for the implementation of ERP, as to competently
compete in the market with new technological advancements. It is about time that Abby think of
integrating business functions into one information system to efficiently and effectively utilize its
business potential while expanding.
ERP involves integrating and automating order fulfillment, billing, Customer Relationship
Management, Human Resources, Supply Chain Management and others. Real time information
to be derived here is accessible, reliable and easily shared that can be used in management
decisions such as inventory purchasing and CRM which in return will enhance productivity. ERP
addresses issues such as lack of cohesion between departments, integration of company
resources and information, database for company records and accessibility and work flow for all
employees. There will be a centralized database where information can be accessed anytime.
With the possible expansion of the six restaurants in Southwest Florida, ERP will be
favorable in managing huge amounts of information that will in return produce data for Abby and
managements decision making.
What-Adds-Value
The following table shows the different opportunities that the company can take. The
recommendation column explains how the different opportunities can be implemented through
ERP and lean system.

Category

Opportunity

Recommendation

Essential

Better tasting food

.The

Better services

leadership in offering only the best

Improve

vicinity

or

company

should

uphold

better by improving the quality of their

environment(cleanliness, theme)

products

and

services

by

Record management

employing

lean

operation

and

Paying terms

ERP. The new equipment will

Free Wifi

improve the payment system. The

company should also improve the
ambiance

by

maintaining

cleanliness and offer free Wi-Fi.

Incremental

Assignment of waiter per table

the

supply

Improved ordering of raw materials(and implementing

JIT

setting

terms

with

supplier

Improve

chain

by

system.

offering Moreover, in serving the customer,

lowest cost)

each table must have an assigned

waiter.

Sustaining

Apply and maintain a liquor license

Ensure liquor license

Waste

Minimize food spoilage

By using JIT system, there will be

fewer food spoilage.

VI.

Lessons learned love

-Customer Satisfaction
-The customer deserves an explanation. The customer deserves an acceptable reason
The key to companys success is customer satisfaction. Just like in love, the manager should try
to explain and reconcile the problem with the customer.
In a relationship, may tampuhan at walang perfect relationship. But you can always try to
improve and reconcile your differences
In running a business, we can try to offer the best but we can still fail. There will always be room
for improvement.

once satisfied, theyll crave for more

Trust! Big word
In a relationship, may tampuhan at walang perfect relationship. But you can always try to
improve and reconcile your differences
You can try to offer everything, but you can still fail and get hurt.
-adapt sa technology
parang love, dapat palitan and update from time to time
kung wizzie talaga, there are other options that will love you back
-before expansion,make sure stability
Try to fix, before you move on
kung hinde tayo kikilos, sino? kailan?
Ang mundo ay isang malaking Quiapo. Maraming snatcher, maaagawan ka. Lumaban ka
Additional Info:
Pre-recession wage: 12.70????
Post-recession wage: 15.07, therefore not high end
Florida-Diverse
Strength: Customize business
11am-10pm is this normal?
20-30 wines in stock
Inventory: each for unique products, economies of scale
Meet with chef every week
Superior servce and food quality in southwest, florida
http://www.shmula.com/lean-thinking-and-restaurant-operations/2845/
http://www.flowmakers.com/articles/articlefoodindustryandkaizen.pdf

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