Department of Agribusiness Management and Entrepreneurship

College of Economics and Management

University of the Philippines Los Baños
College, Laguna

Case Analysis: Bawai’s Group of Restaurant Inc.

Submitted to:
Prof. Jeanette Angeline B. Madamba
In partial fulfillment for the requirements of the subject
Product and Operations Management (BM 240)

Submitted by:
Delomen, Marc Jason
Rebong, Judy Ann

May 10, 2017

I. SYNOPSIS

Bawai’s Group of Restaurant was founded by Yong Summers in March 2007 when
she decided to build a restaurant in her own backyard in Tagaytay City- Bawai’s Vietnamese
Kitchen Tagaytay (BVKT). Six years after its founding another store opened in Quezon City
- Bawai’s Vietnamese Kitchen Manila (BVKM). BVKT, although the flagship store, can only
accommodate 25 people. The store has a reservation only policy and is open only on Fridays,
Saturday and Sunday between 11:00 am - 2:00 pm and 6:00 - 9:00 pm. BVKM on the other
hand has 90 seats available. It has the same business hours like BVKT but is open everyday.

BGRI is currently managed by Yong’s children. Vic is in charge of product

development, Mon for marketing and Fermin is the chief financial officer. Liza is the chief
operations officer. She has her own chain of restaurants and is an expert in food service
systems.

Bawai’s selling proposition is serving authentic home cooked Vietnamese cuisine. It

has a good market niche and has maintained its following because of its food and unique
service. For its menu, it uses fresh ingredients that are imported from Vietnam or sourced
from local suppliers. Vic created a list of accredited suppliers to maintain uniform quality.
They have 36 suppliers in the Philippines that are highly coveted. These suppliers are located
in several locations; Manila, Batangas and Tagaytay. BVKT buys directly from their
suppliers, BVKM on the other hand can meet the minimum requirement of the suppliers so
the ingredients are delivered to them. Both stores had separate supplier arrangements.

BVKT supplies trade secret recipes that are used as the base ingredient for all of
Bawai’s menu. The secret recipes are what makes Bawai’s stand out from its competitors.
They had no problem with supplying for both BVKT and BVKM before, but when BVKM
sales rose demand for the secret recipes increased. Barely keeping up, BVKT hired additional
manpower but could not maintain its production rates because of increased employee
turnover due to unplanned overtime and cancellation of rest days.

In May 1, 2015, BGRI opened its first commercial store in Solenad 3, Nuvali - The
House of Bawai (THOB). Nuvali is located in Santa Rosa Laguna and designed to be the first
eco community in the country. It has three malls including Solenad 3. It has 13 residential
areas and a 200-hectare commercial district. The project for establishing THOB was Mike
Cruz initiative. He is the operations manager for BGRI. After getting its funding, they started
building late in February 2015 and targeted opening by May 1. Mike wanted to open on that
day because of the rent discount that Solenad will give them.

With less than 4 months, training of the staff commenced in BVKT and BVKM. The
line cooks were trained in BVKT, the waiters were trained in BVKM. 2 Days prior to
opening, Brenn (restaurant manager), Shyle (dining manager) and Ian (kitchen manager)
presented their menu to management. Vic noticed something wrong with the food. He said
that the ingredients used was not sourced from their accredited suppliers. Ian argued that they
cannot follow what the other stores were doing because of the difference in their operations.
THOB will be open everyday for 11 hours which leaves no time for purchasing activities like
what BVKT and BVKM does. Ian found several suppliers nearby that provided the same
ingredients with the same specifications. During the presentation, Liza decided that sourcing
their ingredients from nearby stores was the best option to save time and money. Vic argued
that this may damage their reputation.
 During the mall’s grand opening in May 1 THOB received several reservations from
bloggers, top executives of Nuvali, and relatives of the Summers family. THOB was fully
booked on May 1, 2015 but they received several complaints about their food. One of which
was the sweet fish sauce that should come with their fried spring roll. The sauce was not
served because it was not available. Ian called BVKT to determine what happened. Jen a chef
of BVKT told them that they had to prioritized BVKM so they weren't able to deliver several
trade secret recipes. They also said that one of their staff resigned so they were having a hard
time keeping up with productions. Brenn decided to declare that some items are not available
in the menu. What happened disappointed many customers and some even left.

The service flow during May 1 was also chaotic. Orders were getting mixed up and
delayed in serving. It also seemed that there was no sequence in serving the food.

Pre closing, Brenn asked the waiters on how they were trained in BVKM. They said
that they weren’t given any guidelines on how to do things, also BVKM was busy with their
own operations. Brenn also asked the line cooks how they were trained and if they were able
to serve this many people. The cooked said that at most they would serve 10-15 people per
service. Brenn contemplated on his own training in BVKT and compared the complexity of
how THOB operates.

II. CASE FACTS

● BGRI has 2 stores, one in Tagaytay (BVKT) and one in Manila (BVKM). BVKT
opened in March 2007, BVKM opened in September 2013.
● BVKT has 25 seats and BVKM has 90 seats. BVKT has a gross profit of Php 43.2
million from 2007 - 2013. BVKM earned Php 20 million from September 2013 to
October 2014 and has a net profit of Php 10 million.
● Bawai is marketed to serve authentic home cooked Vietnamese cuisine.
● BGRI is managed by Yong’s children. Vic is in charge of product development, Mon
for marketing, Fermin for finance and Liza is the COO.
● Bawai has 36 secret suppliers in the Philippines but also sources imported ingredients
in Vietnam.
● BVKT supplies trade secret recipes to BVKM and any other stores that would open in
the future. The secret recipes are the base ingredients for Bawai’s menu.
● The House of Bawai is the third restaurant managed by BGRI. It is located in Solenad
3, Nuvali. The project to build the store occurred within 4 months. The staff was
trained in both BVKT and BVKM. THOB opened in May 1, 2015.
● THOB will be open for 11 hours, everyday. This makes their purchasing activity
difficult so it was agreed that their ingredients will come from nearby stores.
● May 1, 2015 was a big day for THOB, they were fully booked but had several
complaints about the food due to missing items including several trade secret recipes.
BVKT was not able to keep up with the demand for the secret recipes because of the
increase in demand and employee turnover.
● Service flow was chaotic, orders were missing and came in late. It was not served as
how Mike sees it.
III. POINT OF VIEW

The case will be analyzed through the perspective of Liza Summers, the chief
operations officer. The implementation however will be charged to Mike Cruz (operations
manager).

IV. QUESTIONS

A.) How can BGRI manage its supply chain to maintain the quality of the food in all of
the outlets without disrupting store operations?

To maintain the company’s image, retain its loyal customers, and attract more
customers, it is recommended that BGRI centralize their supply chain activity by creating a:

ü Purchasing Department
ü Central kitchen/Commissary

Purchasing Department

BGRI’s purchasing department will be responsible for the following:

● Identifying sources of supply.
● Negotiating contracts and nondisclosure agreements.
● Maintaining a suppliers list.
● Obtaining the ingredients.
● Delivering the ingredients.

Advantages Disadvantages

Integrated communication to suppliers (including BVKT for May need to hire additional manpower that would further
the secret recipe items). incur costs.

Easier management of suppliers. May take some time since comprehensive training would be
performed especially in supplier management.
Overall management of purchased supplies, eg. monitoring of
orders, would be performed.

Changes in quantities and delivery needs would be

communicated on-time, enough to allow the suppliers to
change their plans.

Receiving of orders would be checked for compliance to

standards and records of these which will be used for supplier
management will be maintained.

Discounts can be negotiated with the suppliers with the

increased quantity of orders.
Table 1. Comparative Description of a Centralized Purchasing Activity
Implementation

Workforce Summary
Title Number of Personnel # of Working Days Rate/Month1 Per Year

Purchasing Manager 1 20 32,000 384,000

Purchasing Staff 3 24 13,000 468, 000

Driver/ Buyer 3 24 12,000 432,000

TOTAL 1,284,000

Table 2. Workforce Summary for the Purchasing Department

Equipment Layout
Description Quantity Price

Smart Phone (manager) 1 43, 990

Smart Phone (staff) 3 27, 900

Smart Phone (driver) 3 8,550

Delivery Cab 2 1,512, 000

Office Furniture NA 50, 000

Laptop 3 45, 000

TOTAL 1,687,440.00

Table 3. Equipment Needed for the Purchasing Department

Ordering Policy

Figure 1. Ordering Scheme for BGRI

Orders are sent online using a standard template created by the purchasing
department. Weekly forecast is sent every Saturday. This will be the basis for the purchasing
department orders and purchases from the accredited suppliers. A monthly forecast will also
be required from each outlet to plan for uncertainties. Ordering for weekly operations per
outlet will be made twice a week, Wednesday and Sunday. The cut off time is 10:00 p.m. In
case an outlet was not able send their orders, the items delivered to them will be based on
their weekly forecast. Delivery of the orders is done every Tuesday and Friday. Orders made
on a Sunday will be delivered on Tuesday and orders made on Tuesday will be delivered on
Friday. The delivery days are crucial. The delivery on Friday is important for the weekend
supply, Saturday and Sunday are peak days in the restaurant industry.

1
Salary Report. Retrieved May 12, 2017 from https://myjobstreet.jobstreet.com/career-enhancer/basic-salary-report.php?
 Figure 2. Timeline of Activities for Establishing a Purchasing Department

Central Kitchen

BGRI should invest in a central kitchen that would serve as a commissary for all of
the 3 stores. This kitchen will provide the “trade secret” products since BVKT was not able to
meet demand. BGRI’s central kitchen will centralize common food production processes
across all branches. The central kitchen will be managed separately from all the restaurants.
It will be an internal service provider for all of Bawai’s outlet. The secret recipe preparation
and processing will be done here and delivered to the outlets with minimal preparation before
serving to the customer. The central kitchen will be a stand alone facility unlike before where
it was operating in BVKT.

Advantages

According to Mohamed (2013) a central kitchen processes more products at a given

time. The food production and assembly process can be standardized and high quality can be
consistently maintained. Because of the volume, BGRI can purchase raw materials in bulk
which could lower its cost (economies of scale). The cooks may also be deployed to other
branches when needed.

Disadvantages

A central kitchen is more system focused than customer focused. Maintenance and
cost of central kitchen equipment’s would be much higher than that in smaller kitchen. It also
needs a significant amount of human capital. Delivering items from each outlets may incur
additional cost and the timing of delivery is very important for food safety (Green 1997).
Implementation

Figure 3. Cook/Chill Process for BGRI Central Kitchen (Green, 1997)

Figure 4. Activities for BGRI’s Central Kitchen

Training and Scheduling

Training of employees for the central kitchen will be important for the success of
BGRI. Training is one strategy to ease employees about change and improve their ability to
adapt to change. The scheduling and staffing requirement will depend greatly on the demand
during slack and peak season. Its is important that each outlet send their forecast so the
central kitchen team will be able to plan accordingly.

Layout and Design

The layout and design of the central kitchen will be based on efficiency of product
flow. The functional areas impact the flow of the operation, and thus, the design of the
kitchen. Based on the flow of food through the system, the layout can be developed.
Equipment

The equipment for the central kitchen is selected for its basic function and for its
ability to increase the efficiency of food production. Factors considered in selecting
equipment include cost, durability, ease of cleaning, and ease of use.

Inventory Management

The central kitchen will have a large inventory of food and supplies. This necessitates
adequate storage facilities. There should also be SOPs for handling food storage due to its
high perishability. Inventory control is important to ensure that the appropriate products are
available when needed and to control costs.

Transportation

Centralizing food production necessitates the transportation of food to BGRI’s

outlets. This requires that the central kitchen have trucks to transport the food. Trucks may be
owned by the department or transportation services can be contracted. The central kitchen
should deliver the food to each outlet and not the other way around to avoid disturbing the
outlets operations.
B.) How can BGRI standardize its service to maintain its loyal customers in all of its
outlets?

Service Blueprint for BGRI

In designing BGRI’s service, a careful assessment should be made of what Bawai’s

market is and the nature of their business. We also looked at what happened in THOB and the
potential market and profitability of the store. The resources and available manpower is also
an important factor in creating a service blueprint. But the most important factor to consider
is the customer requirement and the expectations of the target market.

Restaurants don’t really sell food so much as they sell time; guests are “renting” a
dining seat for a limited period, and the rent charged is the money paid for what they order.
On average, the longer guests stay at a table, the more they need to be spending for the
restaurant to maximize its revenues (Robson 2002). So it is in BGRI’s interest to either
encourage a long stay and try to generate higher revenues at each table, or to increase sales
volume through streamlining the dining experience by creating a standard sequence of
service.

Service design is a very important aspect in managing a business successfully –

especially under the new economy when product alone cannot effectively differentiate a
business from other competitors (Yu and Fang, 2009). According to Larsen et al (2007) an
excellent service design can contribute many benefits or advantages to a firm, such as follow:
brand building, customer and employee retention, better relationships with customers,
customer loyalty, enhance profitability, gaining competitive advantage. It is also able
differentiate a firm from the many other competitors (Ojasalo, 2009).

Service demand is variable and uncertain (Vincent et al 2003). Just like what happen
to THOB, the restaurant was full and they were entertaining VIP guest but only had 3 waiters.
The need for waiters can vary greatly throughout the year depending on peak and slack
periods (Edvardsson 2011). Therefore, firms must decide how much capacity to provide.
Often, employees are somewhat flexible because they can be cross-trained to do different
functions. Sometimes, part-time labor can be used, but because demand is uncertain, extra
labor might need to be available (Magnus and Sara 2010). Since a service design is human
centered, a mistake such as not properly writing orders can lead to delays in the line cooks
service time which can result in longer waiting times as well as customer frustration. As a
result, operational mistakes can use up service capacity because of rework (Len and Nerilee
1995).

Service blueprints covers many elements or aspects. For a restaurant, the various
components to be considered in service design can include: the quality of the services
offered, seating arrangement (Sulek & Hensley, 2004), food quality, servicescape, waiting
experience (Chase, 2004; Wang & Chen, 2012); service process, facilitating goods, as well as
even on training or development of the human capital (Shulver, 2005). Service blueprinting
includes establishing boundaries and the levels of details needed. It also has to identify and
determine the sequence of customers and service interactions. The blueprint should also
develop time estimates and pinpoint potential failure points. BGRI should consider both the
external and internal environment that may affect service design, so to align the internal
competencies to tap into the external opportunities (Susskind et al 2007). This is crucial as
the external environment is never constant, but yet service design must be adjusted and
tailored to suit the external environment.

Indeed, this is even more crucial for BGRI who just stepped in a larger market by
establishing THOB as its first commercial restaurant. In a way, it can be simply stated that
good service design can contribute to BGRI’s financial and non-financial performance.

Creating Quality Home Style Service

Bawai’s started with a small restaurant in Yong’s home backyard. Even with
its expansion in Manila, the aim of BGRI is to continue what it had started and bring the
home-y feel in the metro. With THOB, the legacy should continue. Even if the store is
located in a mall, guest should feel right at home when they come in. They should feel the
warmth and acceptance just as when they visit a home of a friend or a work mate. Customers
should be welcomed with a friendly and smiling face that can cheer them up when they enter
the store. Brenn should foster a strong workplace culture or workplace spirituality that is
highly consumer oriented. To do this BGRI should have strong focus on the welfare of
employees to drive internal marketing, ensuring employee satisfaction as a way to engage the
employees towards achieving superior customer satisfaction.

Servicescape

This includes the stores ambient conditions, spatial layout and functionality, signs,
symbols and human elements. BGRI should aim for an excellent atmosphere and decoration
design, which can be characterized as a warm and inviting house. They can take advantage of
the interior spaciousness of the floor plan, and quaint touches which contribute to the art,
aesthetics, and humanities of selling home style authentic Vietnamese cuisines. The store
must have informative and yet nicely decorated menu boards that fit the entire concept of
delivering unique Vietnamese cuisine.

Implementation

Implementation in service design is challenging and complex. It not only involves

products and technology, but also people and organization. To implement a service, people
and organizations need to change, that is not always easy to facilitate but not impossible
either (Warwick et al 2014).

It is important that BGRI employees understands the service concept and is motivated
to implement it. To do this it is important that the employees clearly understands their task
and do not feel forced to change. Especially when the employees are relatively educated and
used to autonomy in their work it can be crucial that they understand the goals and see the
possibility to reach the goal before asking them to change how they work (Lin et al 2011).
One way to do this is by involving the employees form the beginning of the service design
process and use workshop to give employees power and a collective ownership across all
stakeholders (Donetto Et al 2014).

The more resources invested in earlier stages the more likely a successful
implementation. However, there will always be some problems and resistance when
implementing change, therefore it is important that Brenn, Paul, Mike at Shyle is on-board
 and know how to deal with problems quickly and creatively. According to Burns (2006), in
transformation design, they seek to leave behind not only the shape of a new solution, but the
tools, skills and organizational capacity for ongoing change. This will empower the
management to continuously improve the service after implementation.

If the service design is not anchored the right places in the organization, the chances for a
successful implementation decreases. Therefore, the leaders of Bawai also need to be
involved. Designers can support decisions by measuring the results. To prove the results a
baseline and a goal is needed. At the beginning of the service design project, it is therefore
smart to make some key goals and decide how to measure them. A good rule of thumb for
what to measure is what feedback will increase the probability of employees and
management to improve the service, and create a culture of improvement (Sangiorgi 2011).
Implementing BGRI’s service design is not the end because the design process on principle

never ends.

Figure 6. Service Design Implementation Loop

V. CONTINGENCY

A.) PURCHASING DEPARTMENT

ü Consolidate the orders of all the outlets and send it to the suppliers directly. This will
warrant free delivery from all of the suppliers because of the larger volume.
ü Have the suppliers deliver to all outlets regardless if they meet the minimum
requirements. To compensate, BGRI can pay each supplier a delivery fee.
ü Find 3- 4 reliable suppliers that can provide all of BGRI’s needs then arrange for them
to deliver to all outlets for free. In exchange, BGRI will have to provide a blanket
order paid thru post dated checks or security deposits.

B.) CENTRAL KITCHEN

ü Train the head chef/kitchen manager of all the outlets in making the secret recipes and
have them sign nondisclosure agreements. This will enable all of the outlets to make
the secret recipe.
ü Close the BVKT restaurant and have all of the staff focus on making the secret
recipes.
 C.) Service Blueprint Risk Management

Risk Impact Management

Complexity of the Service Resistance of employees and Involvement of all people

Standards management concerned.

Poor performance after Loss of sales and Define the service blueprint
implementation. competitiveness. goals specifically and create
performance measures for
ease of evaluation.

Limited resources during Delayed implementation. Design the manpower

implementation and lack of requirements well and
manpower. forecast needs so recruitment
could be expedited.

Difficulties in employee Problems during the Service design workshops and

compliance implementation phase and seminars for all employees.
standardization of service
standards

Table 5. Service Plan Contingency

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