Question

Laura, a new graduate from Cornell Unversity’s School of Hotel Administration, could not believe her good luck. She was recently offered a new entrylevel position as an operations analyst at ARAMARK, one of the most admired U.S. companies, according to Fortune magazine (ARAMARK is a leader in professional services, providing award-winning food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world). The reason for Laura’s excitement was also because of the unique opportunity she was getting in her first assignment: she was going to Beijing during the 2008 Olympics to work for ARAMARK food services. Over the years, ARAMARK has provided food services to many large-scale events, including the last 13 Olympic Games. For example, during the 2004 Athens Olympics, ARAMARK worked with its partner, the Daskalantonakis Group (the leading Greek hospitality and tourism group), to provide meals for the largest Olympic Village in history. The Olympic Village in Athens hosted Summer Olympic and Paralympic Games participants, coaches, officials and Games personnel. ARAMARK and the Daskalantonakis Group served more than two million meals to participants, coaches, and officials throughout the 60-day duration of both the Olympic and Paralympic Games. Some of the other large-scale food service events managed by ARAMARK included serving over 340,000 motor fans who attended one of the biggest events in Spain last year: the Spanish Formula 1 Grand Prix in Barcelona. More than 1,100 ARAMARK employees served attendees more than 9,000 fruit dishes, 120,000 sandwiches, 40,000 hot dogs, and 40,000 cups of coffee during the three-day event. Some specialty gourmet dishes were also served, such as barbequed lamb steak, pumpkin and orange soup, and sole rolls with shrimp cream. While preparing for her job interview, Laura had become aware of the large scale of ARAMARK’s food service engagements. However, nothing had prepared Laura for the scale of the Beijing 2008 Olympics food service operations; Laura and all the other new employees had received a pre-event memo from their new boss, which stated that the ARAMARK team would be responsible for serving 3.5 million meals during the event (or 10,000 people per hour) that would not only pack a punch for peak performance but had to have the smells and tastes of home. The food service operations would have a staff of nearly 7,000—including some 230 chefs from 10 countries— to feed almost 65,000 athletes, coaches, officials, and members of the media throughout the Olympics. The memo further stated that ARAMARK’s biggest challenge would be to ensure that the food arrived at the right time, at the right temperature, and in the right quantities. In addition, dining during the Olympics would also be a social experience. Therefore, ARAMARK had to ensure that the athletes and visiting dignitaries got the highest quality service for a great experience. The memo also included a table (see Table 12.4), which listed some of the key inventories that needed to be managed to ensure that the food service operation was successful. After going through the memo and the attached table, Laura wondered if she should still feel lucky or she should start panicking. Her job was to support the assistant director in effectively managing inventory for the food service operations. She wondered if she could apply the concepts she learned about lean enterprise in her final semester operations management class to this first “real-world” job. Table 12.4 Inventory for 2008 Beijing Olympics Food Service Operations To serve a “world menu” of more than 800 recipes throughout the Games requires: • 93,000 pounds of seafood • 130 tons of meat • 38,000 pounds of pasta (dry) • 134,000 pounds of rice (about 20 million half-cup servings when cooked) • 743,000 (or 232 tons) potatoes • 800,000 (or 44 tons) eggs • 1 million apples • 936,000 bananas • 312,000 oranges • 684,000 carrots • Nearly 24 tons of onions • 50,000 pounds of mushrooms • 57,000 pounds of cheese • 190,000 loaves of bread • 5,500 pounds of butter • 16,000 pounds of tofu • 20,000 heads of lettuce All those ingredients will create a rotating menu of: • 320 hot main entrée dishes • 160 vegetable and potato dishes • 128 rice and pasta dishes • 400 different dessert, pastry, and bakery items

QUESTIONS

1. What are the unique aspects of inventory management in large-scale food services such as ARAMARK’s Olympic Games operations?

2. What lean production concepts can Laura apply in the above context? What challenges will she face?

3. What are the limits to applying lean principles in large food service operations such as ARAMARK’s Olympic Games operations?

Answer 1

1. What are the unique aspects of inventory management in large-scale food services such as ARAMARK’s Olympic Games operations?

For such large-scale food supply, there must be many vendors. While much of the products will be Chinese origins, several other supplies tend to be American and European sources. It is because China is using heavy chemicals for development and athletes may be wary of eating the produce. Growing product has to be individually handled and has separate supply chain. All the ingredients for dishes that belong to a particular menu need to be present for the day. Perishable products are supposed to have less lead time while frozen food may be a supply even sooner. MPS needs to be organized in order to decide when the product is to be shipped and how much to order.

2. What lean production concepts can Laura apply in the above context? What challenges will she face?

She has to cut back on waste (Muda). She needs to reduce Supply Muda, Over-order Muda, Transport Muda, and Re-work Muda.

If the supplies are over-ordered, the cost will be increased and the inventory may then escalate and may increase the expense of the keeping. The problem with perishable goods is also that the cost of keeping is very high (due to freezer requirement). If we order ingredients which come from Europe, shipping costs will be incurred. It must be assured that only particular goods are manufactured, and the everything is produced domestically. First but not least, if we do not prepare the meal correctly, then it has to be reworked and it adds to food waste.

She will face the difficulties that wastage would surely arise in this sclae, but she needs to prepare the expense attempt is appropriate and the is not. Waste due to rework is appropriate, because the value is zero. Transportation pollution is appropriate because it can be presented because bringing benefit to European athletes.

3. What are the limits to applying lean principles in large food service operations such as ARAMARK’s Olympic Games operations?

There is trade-off in the dimension between lean management and agile operations. The quick turnover and availability on such a large scale require mobility that will add to the costs due to the high keeping of stock and manpower. The drawbacks of lean concepts are that if we solely adopt lean management, we'll reduce agility. Agility increases productivity in large-scale operations while lean management controls the cost. If Aramark decides to run more such operations in the future, then cost will not sacrifice efficiency.

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