Services Management Michael D. Collins, Ph.D.

Benihana Simulation Assignment

Define the following terms:

a) Service capacity: Service capacity encompasses the capability of a company or organization to perform the current services that it uses. These include services such as information technology services, different working patterns, and also the employment of resources. Service capacity is the ability to ensure that the services can meet the targets and objectives set by the organization (Seyring et al., 2009).

b) Throughput: Throughput is also referred to as flow rate, and is the number of consumers, goods, services, and money that are going through a system or business process for every unit of time. One good example with regard to Benihana of Tokyo is the number of consumers served per hour. This rate is more often than not measured as an average rate (Dhamdere, 2002).

c) Utilization rate: The utilization rate is also referred to as the rate of operating. It is a basic measure of the rate at which an organization uses or meets its projected and prospective levels of output. This particular merit offers the organization a perspective with regards to the general decline, or slow rate that is there in the economy or within the organization itself at a certain point in time. In essence, if an organization is operating or functioning at a utilization rate of 80% in terms of capacity, then there is room for enhancing production to attain the 100% mark. The utilization rate that is maximized is attained devoid of any additional costs of constructing a new manufacturing plant or organizational facility (Seyring et al., 2009).

2. Explain the "Theory of Constraints":

The theory of constraints can be defined as a conception that places emphasis on the role of constraints in restraining the level of performance of a company. In other words it is a model that perceives any system of management as being held back from attaining its goals and objectives by a number of restraints. The theory of constraints propels managers to tackle constraints and blockages so as to realize and accomplish their main objective, to generate cash and maximize profits. Sophisticated both in its conception and design, the theory centers the attention of the management on those elements and aspects that hinder the performance of the system. The theory of constraints puts emphasis on the optimization of performance concerning a well-defined set of constraints of prevailing procedures and product offerings. It offers an action outline that brings together the activities of executives around a small number of extremely visible system components (Institute of Management Accountants, 1999).

3. Why is this theory important and useful to managers involved is delivering services to customers?

The theory of constraints is of great importance and use to managers who take part in the delivery of services to consumers. This is largely because the theory is a significant component for enhancing process flows. The impact of the theory of constraints is comprehensive with regards to gaining understanding on blockages to a procedure, and to helping managers to handle these types of blockages to generate an effective process flow (Seyring et al., 2009). In particular, for consumer service, the theory enables managers to understand what restrictions are present concerning consumer' needs. According to Khan (2015), there are steps to application of the theory of constraints that can be of great importance to managers when delivering services to consumers. Simply stated, managers must first identify the constraints of the process. This implies ascertaining what hinders best provision or delivery of services to consumers. The next step is to decide the best way to exploit such process constraints. Everything else becomes secondary to this decision. Thereafter managers are able to undertake reevaluation and consider whether the needs of the consumer have been met

4. Relative to the "Theory of Constraints," to what does the "drum," "buffer," and the "rope" refer?

Drum, Buffer, Rope (DBR) can be defined as a solution in planning and forecasting that is a derivative of the theory of constraints. The major supposition of this particular aspect is that within any organization, there are a limited number of relatively scarce resources that regulate the general output level of the organization. This limitation is the "drum" that sets the pace, or instigates the speed or level for all other resources. To make the most out of the output of the organization, planning and execution activities are concentrated on taking advantage of the drum, guarding it against disturbance or interruption through the use of "time buffers." As well, other resources and judgments are harmonized or subordinated to the...

How can a manager utilize a service blueprint or flow-chart to improve productivity or throughput?
Service blueprinting is an analysis procedure technique that places emphasis on the consumer and the interaction of the consumer with the provider. This is a tool that is beneficial in facilitating service planning. The technique can be applied for forming new inventive services in addition to enhancing the prevailing services. The process is also suitable for guaranteeing the quality of service procedures. It can also be employed for new member of staff training or for presenting customers with a service sequence outline and synopsis. The service blue print can also be applied for visualizing the process of service development in the initial phases. In every phase, the points of contact that are there between the company and the consumer become apparent (Seyring et al., 2009).

6. Service innovation is critical to the success of many businesses. In some cases, innovation can fundamentally change an entire industry. How did Benihana "think outside of the box" and fundamentally change the restaurant industry? What are the risks and rewards of service innovation? And how can companies encourage innovation?

Benihana thought outside the box and fundamentally changed the entire restaurant industry by coming up with a unique business model. To start with, the company made use of Japanese historical authenticity. Benihana employed 100% authentic material from Japan such as walls, ceilings, streams of light, ornate lights, and relics to fashion a distinctive setting that consumers loved. This environmental approach initially helped to build the brand and image. However, it has been shown to have been a significant cost investment that was considered to be an element of slower development (Sasser, 2004).

The use of the Hibachi table arrangement enabled the restaurant to sustain a high turnover rate. In addition, Benihana made Japanese cooking tangible. The consumers who came to eat at the restaurant were allowed to watch their food being cooked right in front of them; this aspect was used to make Benihana 'unique'. This enabled the restaurant to control and regulate costs as well, considering labor in the United States (U.S.) is not inexpensive. To begin with, using the Hibachi table decreased costs to 10 to 12% of gross revenue sales (Sasser, 2004). Shifting the kitchen to the table where the consumers are dining also took full advantage of space utilization. As well, the necessity for additional space back of the building was decreased by ten percent. As stated by Sasser (2004) research study on the United States restaurant market showed Americans love dining in exotic locales. Individuals enjoyed watching their food being prepared right in front of them. Subsequently, sixty seven percent of new consumers were recommended by others, and about twenty percent we attracted by any kind of publicity campaign; this illustrated that 'word of mouth' was a vital element in sales and promotions (Sasser, 2004).

Other key aspect of Benihana's winning strategy were effective and efficient process flow and effective management. The restaurant properly hired appropriate personnel, and thereafter trained them and treated them as part of a 'family'. As a result, this enthused the employees, forming a spirited work setting that brought about satisfied workers and consumers.

Some of the effectual and resourceful business management practices include effective exploitation and use of restaurant floor space, and appropriate seclusion of bar and eating area to offer sustenance to the beverage and food sections. Other practices used by Benihana include flexibility in sanctioning eateries to set their own work hours, in accommodating particular metropolitan standards. Benihana also rewarded staff members when sales objectives were met. These are only a few examples of efficient business management practices employed by Benihana (Sasser, 2004).

When the restaurant sales decreased, the menu was minimized to provide just three basic entrees: steak, shrimp, and chicken. Benihana was very strategic as it selected the most popular entrees for middle income individuals in America. As a consequence of this decision, thirty to thirty five percent of the costs incurred were decreased in a manner that was very effective; management of the inventories gave rise to no wastage at all (Sasser, 2004).

There are a number of ways in which companies can encourage innovation. According to Rathi (2014), one of these approaches is to encourage competition amongst the employees. Rathi (2014) asserts that this approach of encouraging innovation through competition has been of great success in the business of major companies such as…