Evaluate the adoption of an Automated Process (AP) of a restaurant business in South Africa.

You are appointed Operations Manager of a traditional restaurant where the current sales and ordering system are manual. People enter the restaurant; join long queues where they place the orders over the counter. Salespersons write the orders in a book and take 5 orders at time to the production unit situated in another room behind the sales room/reception. Customers are given handwritten pieces of paper indicating their order numbers and told to wait for 10 to 15 minutes. When the orders are ready someone calls out the order number which is matched with the record in the order book before it’s given to its rightful owner. It has been observed over time that the manual operations were creating a lot of challenges including overcrowding, errors in capturing the orders leading to arguments with customers and among employees, rejected orders causing losses, overstaffing and delayed orders among many other problems.

The restaurant is strategically located such that it has potential to serve 750 customers per day as opposed to the current 500 customers per day due to restrictions imposed by space, and slow and inefficient process. The restaurant sells its meals at R60 which includes a mark-up of 50% on material costs.

The restaurant currently employs a total of 30 employees as follows.

• Tellers/Receptionists – 8

• Order inspectors – 5

• Collections – 5

• Production – 10

• Queue controllers – 2

The restaurant operates every day of the week with each employee earning R5 000 per month 2 A recent market survey has shown that demand for food from the restaurant will grow by 5% per annum with the cost of inputs increasing by 10% per annum including labour costs. The selling price is projected to increase by 7.5% per annum

Problem identification:

The traditional means of taking meal orders has led to overcrowding in many South African restaurant. There are human errors in capturing and processing orders that has led to losses. Human errors and overcrowding are the major challenges of traditional system in restaurant business.

Identified solution:

Automate the sales, production, and order collection system in restaurant business in South Africa. The information given below is the indicative impact that automation will have.

Items required

Initial investment: R2 000 000 including installation costs Vibration Gadgets, ordering flat screen monitors and upgrade the IT system by hiring IT specialists who will monitor and maintain the AP. Design life of all equipment is given as 5 years. Maintenance costs average 20% of initial cost per year. 10% of employees will be laid off due to automation of the processes.

Question:

Evaluate the economic benefits and costs of automating the restaurant business. To evaluate the cost/benefit appropriately prepare a 5-year forecast for the restaurant assuming a manual process and an automated process. Do you support the adoption of the automated restaurant business system or recommend the business continue with the traditional system? Justify your decision?