Introduction

Today, we will be looking at the processes and operations of a Subway restaurant.

Subway is one of the fastest-growing franchises in the world, with 44,882 restaurants in 112
countries and territories, becoming the worlds most ubiquitous restaurant chain, posting armies
of sandwich artists in more American outposts than McDonalds and Starbucks combined.
The restaurant specializes in the making of highly customizable submarine sandwiches (subs),
advertising its product as the leading choice for people seeking quick, nutritious meals that the
whole family can enjoy.
Through the course of the presentation, we will mainly focus on the four main characteristics of their
operation (commonly known as the four Vs: Volume, Variety, Variation and Visibility) as well as
Subways partial implementation of lean synchronisation practices.

We will also be touching on topics such as: the inputs and outputs of the restaurants, its locations, layout
types, performance objectives and supply and demand management.
Location decision
Subway is a downstream vertically integrated business, so their location decision is all about following
the customers, wherever they may be, as opposed to suppliers, which are often located tens or hundreds of
km away.With this drive in mind, and their flexibility in regards to locations ( their stores are cheap to
build and small in size, as opposed to a McDonalds, for example, that accommodates tables for customers
and a drive throughs), they have had some pretty interesting location choices, from universities and
hospitals, to laundry mats, boats, and even suspended in the air on the World Trade Centre construction
site.

However, this strategy is not without its drawbacks, as with their recent decrease in sales (due to
competitors implementing healthier products, subways numerous stores might just end up
cannibalizin each other.
Input- Output
Subways main product is the sub, which comes in two different sizes and multiple variations.

There are two types of resources which constitute the inputs for a sub, which can be categorized
as:
Transforming resources
Transformed resources
Transformed
In the case of Subway, input resources include; the bread, ththe %se toppings, the dressings etc.
(elaborate on this) these are transformed resources because they are transformed in some way by
the operation to create outputs.
Transforming
The sandwich artist is the main transforming resource: following the customers instructions (or
a recipe for the standard subs), they effectively build the finished product and create value for the
customer, with the aid of other transforming resources, such as the kitchen appliances:
(elaborate) the oven, knives etc.

This brings us to the four Vs of the operation.

Volume
The whole subway franchise serves around 2.6 billion subs every year, with a small Restaurant,
such as the one in Canon Park, Coventry selling around 350 sandwiches a day.
This makes it high volume business.
This leads to high-repeatability process, as the sandwich making process is fairly standardized.
The standardization and the high volume allows the company to take advantage of economies of
scale,
Leading to low unit costs.

Variety
Subway allows customers to design their own sandwiches, using more than 50 ingredients,
which leads to 37 million possible sandwich variations at the chains more than 44 ,00 locations.
This leads to an incredibly high variety that subway provides with their products.

Variation in demand
Subways demand is fairly constant throughout the year, although this can vary between stores(
The one in Canon Park reported decreasing demand during term breaks).
The subways demand does varies throughout the day (Feyi and Soluchi,you guys talked about
demand so please research this a bit) (lunchtime, people getting out of work, students out of
school, etc). To deal with this, subway implements a chase-demand strategy, on which we will
elaborate on shortly.
This allows them to adjust their working capacity throughout the day (workers), which leads to
high utilisation.
Visibility
Subways processes are highly visible. (how about visibility in the back? To be expanded on)The
sandwiches are made in front of the customers, with all the ingredients being on display. The
process is governed by customer perception: they are confident that they get what they paid for: a
sub made from the freshest possible ingredients.
This means that the employees need to have high customer contact skills, a great attitude and a
professional appearance.
The fact that the process is highly visible also means that the customers have a shorter waiting
tolerance, which fits subways profile as a fast food restaurant.

Performance objectives
(we need the comparison between subway and a different restaurant to do this)

Lean
While Subway does not traditionally brand itself as a lean operation, it does follow the main
three principle of the lea philosophy:
Involving everyone & Continuous improvement
Subway involves its customers in the sandwich making process, so as to ensure an experience
tailored to their needs. Furthermore, workers are encouraged to give suggestions and notice
faults in the processes they implement, which leads to continuous improvement.
Waste elimination
Subways processes are pull driven, processing 1 customer at a time(1 piece flow) : they make the exact
sandwich the customer wants at the time the customer orders it. By structuring their processes to do just
that, they effectively eliminate all seven types of waste commonly identified in processes:

Over-production and defects

By making their subs to customer demand, subway ensures that no overproduction is taking place.
Similarly, as the sandwich artists are skilled and the customer is effectively supervising the whole
sandwich making operation, any possible mistakes made by the artists are mended immediately, which
results in a complete lack of defective products.
Motion and transportation
Motion- Motion waste is almost non-existent. All necessary inventory (bread, tomatoes, onions and so on)
is located right at its point of use, in order of popularity and the product flows perfectly from one end of
the production line to the other.
It never moves backwards.
The path of the sandwich, as well as that of the worker are therefore as short as they could possibly be.
Waiting time
The fact that subway makes their sandwiches on the spot does result in some waiting time as opposed to if
the sandwiches were premade and pre-packaged. However, the sandwich making process is relatively
straight forward, with The amount of the vegetables prepared and the location in the line is based on the
popularity of the produce. (For example, lettuce and tomatoes will be found closest to the sandwich
artist in multiple large size bins while the hot peppers and olives will be in smaller bins further away)
This minimizes motion and refill times.
Subway can also minimize waiting times by identifying internal and external activities: for example, if the
customer wishes to have his sandwich grilled, the sandwich is pulled out of the line and the artist resumes
work on the next sandwich, while the first one is grilling.
Furthermore, in times of high demand, you may see as many as six or eight people assembling a
sandwich, dividing the tasks fairly evenly among the operators, so sandwiches dont get stuck or begin
piling up at any one operation. This results in an optimal operation with significantly reduced waiting
time.
Further speeding-up the process, there is a different person at the register, shorting the task time for the
sandwich maker. The wrapping bags are standardised and already loaded with a serviette. You arent
asked if youd like a serviette, they are already in the bag our sandwich is placed in.

Process
Subways prepares all of its ingredient before-hand: the bread is baked, the cheese and meats are sliced
and vegetables are cut all prior to store opening.
The customer therefore gets exactly what he wants, as he can handpick the ingredients, with the removal
of non-value adding activities, such as waiting for the artist to slice the tomatoes or bake the bread.
Inventory
Our local subway manager (Canon Park), reports that there is effectively no inventory waste in the
process. Using the recorded demand of the previous years, they are able to accurately predict daily
demand and adjust their inventory. Their meat and vegetables shipments are delivered twice a week and
three times a week respectively, so they are fairly flexible in adjusting their inventory to both low and
high demands.
Demand forecasting is crucial in this type of business, as the inventory can quickly become unusable.

Waste conclusion
Subway matches production and sales pace, mastering the concept of Takt time.
5s

Seri(sort)

Subway employs a cell layout along its assembly line, with items being organised by function ( vegetables, breads,
meats, dressings etc.). All items displayed can and do go into the production of the sandwich, meaning that there
are no unnecessary items in sight.

Seiton(Straighten)

All necessary equipmentthe toaster oven, for exampleis placed at the point of use. Likewise tools such as the
sandwich cutting knife are returned to the same location every time, so theres never any time wasted in finding
them when they are needed next.

At the store level, first time customers are guided through the sandwich making process. The pay here location is
clearly marked. We can see where the process (and the queue) begins. Each station is clearly marked with the
choices at each step. There is a decal on the glass with photos of the product range. Firstly choose the type of
bread youd like; here are the choices white, wholemeal, flat bread and so on. Here are the choices of meats;
ham, tuna, chicken and so on. And these offerings are clearly defines at each station, with lables and pictures, a
sign of visual management.

Subway also implements Kanban, (Arya, you said you had something on this)

Sieso(Shine)

Work areas are kept clean. An errant piece of spinach or an olive in the banana pepper bin is removed and either
disposed of immediately or returned to its proper location.

Each store has a cleaning bay for vegetables.

Seiketsu(Standardise) and Shitsuke(Sustain)

All subway practices are carefully documented and shared in their guidebooks. Any potential employees must
complete 25 online courses, pass multiple tests and go through 20 hours of on-site training to ensure they are
confident in the use of Subways practices.

Furthermore, in the case of their standard subs, employees must use strict recipes and measurements,

Final conclusion(to be added)