2013

Chill Out Cafe

ARSHIA GUPTA

PGP/17/014

BHAVNEET KAUR

PGP/17/016

DIPTI JHA

PGP/17/017

SHIPRA AGARWAL

PGP/17/048

U SATYA NAGA VINEELI PGP/17/056

USHA BHAKUNI

PGP/17/057

YASHASVI KANSOTIA

PGP/17/062

Indian Institute of Management

Kozhikode

Chill Out Cafe 2013

Acknowledgement
We would like to express our sincere gratitude and indebtedness to the owner of Chill Out
Caf Mr. Donald for his enormous help and support right from the inception of the project
till the end by virtue of giving us the required information and allowing us to study the
operations of the cafe and personally explaining a few operations, in spite of his busy
schedule and huge workload.
We would also like to take this opportunity to express our sincere gratitude to professor,
Mr. Sanjay Jharkaria for his constant guidance, valuable suggestions and moral support.
The methods and techniques, taught in class, have been very useful in doing the required
analysis.

Section A Group 5
ARSHIA GUPTA
BHAVNEET KAUR
DIPTI JHA
SHIPRA AGARWAL
U SATYA NAGA VINEELI
USHA BHAKUNI
YASHASVI KANSOTIA

Chill Out Cafe 2013

Executive Summary
We as a group have chosen the recently opened caf right outside the institute gate,
called Chill Out Caf, which has become very popular among IIMK students in a
short span of time. We thought it would be very interesting to study as to how the
cafe has aligned itself to serve the requirements of students and also, since the caf
is new, there is lot of scope for improvement.
Chill Out Cafe is a facility based service where customers can dine and enjoy
ambience. Chill Out Cafe offers services at competitive prices and give value for
money. It is affordable for college-goers and reachable from IIM Kozhikode and NIT
Calicut. It is appreciated for good food and music but the service is perceived as
slow. Our team as well is a customer of the same. Having experienced the service,
we were with a view that with little improvements in the operations the restaurant
could do wonders. Due to these reasons, we have chosen Chill Out Cafe as our
Operations Management Project.
This report explains the operation strategy of the cafe, e.g. layout, procurement,
quality management, inventory, location, process flow, etc. The report also focuses
on the issues concerning the eating joints in Kunnamangalam and the steps that
have been taken towards the same. The report ends with a few recommendations to
improve operations of the cafe and how to improve the service during high demand
times.

Chill Out Cafe 2013

Table of Contents
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.

Scope
Introduction & Location
Layout of Restaurant
Service Process, Strategy and Design
Service Process Matrix
Service System Design Matrix
Service Process flow
Service Blueprint
Process Flows
Inventory Management
Quality Management
Capacity Utilization
Resource Utilization
Hierarchy of Issues
Recommendations
Exhibits

5
6
7
9
11
11
13
14
15
18
18
20
20
21
23

Chill Out Cafe 2013

Scope
In this project we have done the operations analysis of Chill Out Cafe, which happen
to be a fast food restaurant in Kunnamaglam. We have analysed how in his limited
resources and equipments, the restaurant is making profits by capitalizing on its
location advantage by targeting the student community from the nearby areas. The
restaurant is in its infancy years and has a tremendous scope to enhance its
operations to make greater profits. By giving a detailed account of the current status
of the inventories, process flows, resources, space and layout of the restaurant we
have given our recommendations which can make the functioning more efficient. We
have also focused on the aspect to overcome the competition which he faces from
the other restaurants in this area. Our analysis and suggestions are based on the
process flows of the most commonly sold items.

Chill Out Cafe 2013

Introduction
Started in January 2013, Chill Out Caf is a one of its kind music themed caf located in
Kunnamagalam, Kozhikode. Situated right opposite to the IIM Kozhikode gate, the caf
caters mainly to students from IIMK and other youngsters in the nearby areas. Donald R
Stanley, the owner of the caf is a native of Calicut who came up with the idea of setting up
a caf so as to attract youngsters who enjoyed good coffee, food and music. The caf
serves also serves fast food and has an unique advantage as the only caf in
Kunnamagalam. Its location surely adds to the lucrativeness as it is a famous hangout spot
for the students of IIMK who take out time to chill here. Inspired by the Jamaican
musician, Bob Marley the interiors are done by using bright colours, posters and
photographs of various musicians, and lamps. The music played is soothing to the ears and
people generally are seen reading books and magazines, chatting or watching movies on
their laptops while enjoying meals. The caf also has an outdoor area where people can
smoke and enjoy the view of the town.

Location of the Restaurant

Chill Out Cafe 2013

Layout of Restaurant
Service Area
The restaurant has a rectangular layout. The area has been divided into the following 4
areas:
1. Seating Area It has 4 tables and each has a capacity of 4 people. The capacity of
this area is 4 x 4 = 16 people. The area occupied by each table is 4 x 6 feet.
2. Reception Area The reception or the billing area gives a look and feel of an open
kitchen. This area has drawers under the table where the owner can store inventory
and it is also used to keep the water filter, oven and the coffee machine. The billing
is done manually in Chill Out cafe. Tissues and glasses are kept which can be used
for self-service. The owner keeps one chair for himself in this area.
3. Seating at the reception The reception area has 6 cushioned seats and has a
capacity of 6 people. But this area is seldom used. When the seating area is full, the
people who are waiting can sit here and place the order till the seating area becomes
available.
4. Open Area The open area has 2 tables and each table has 2 seats. So, it has a
total capacity of 4 people. The open area is usually not used by customers for
seating purposes. It is rather used as a smoking area.
5. Kitchen Area The kitchen area has a fridge, the gas-stove and 2 slabs (horizontal
and vertical) on two sides of the walls. It also has a window and an exhaust window
that is used for adequate ventilation and flow of air. He also stores griller, blender
and fryer in the kitchen area.
The below table gives a snapshot of the area division in the cafe, the capacity of each area
and the area in feet.
Region
Seating Area
Reception Area
Seating at the
reception
Kitchen Area
Open Area
Total

Tables
4
NA
6
NA
2
12

Type
of Capacity
table
4-seater
16
NA
NA
1-seater
6
NA
2-seater

NA
4
26

Area in Feet
16 x 6
16 x 24
2 x2

256
384
4

8 x 10
4 x 30

80
120
844

Chill Out Cafe 2013

Service Area Layout - The above image describes the layout of Chill Out Cafe. The door
on the right side marks the entrance to the Cafe. As calculated and observed in the figure,
the total area is 844 in feet and the total capacity is 26.
Strategies for competitive advantage:

Differentiation: Unique ambiance, Varieties of Coffee, Good music

Cost Leadership: Aptly prices food items to suit students
Quick Response: Service quality is good although the timeliness can be improved
upon

Order Winning Criteria For Chill Out Caf :

Aptly priced food items

Variety of items on the menu
Locational advantage
Outdoor Smoking Zone
Availability of charging points for laptops

Chill Out Cafe 2013

Service Process, Strategy and Design

Elements in the design of service organisation
There

are four components that are involved in the design of any service organization:
Target Market
Service Concept
Service Strategy
Service Delivery System

Concepts involved in the Design of a Service Organization

Target Market for this restaurant is people who want to have light snacks and
spend some time with their friends. It provides them with the perfect ambience and
good quality fast food. There are continuously growing and attracting a wide range
of customers due to their unique value but IIMK students have been their major
customers due to their location. As it is just in front of the IIM Kozhikode gate, the
proximity of the cafe makes it a hub for the students of IIM Kozhikode. The closure
of High Octane and IRCTC have increased in the footfall of Chill Out Cafe.
Since the opening of the cafe, it has gained popularity due to many reasons such as:

Non-existence of cafes in Kunnamanagalam area

Easy accessibility
The only fast food restaurant
Taste and quality of food
Popularity of the food items served burgers, cold coffee and sandwiches
Affordability
Ambience of the place Music and lighting

Service Concept and Service Strategy of Chill Out is to offers light snacks like
burgers, sandwiches, French fries, cold coffee and other fast food items that people
can enjoy with their friends; also they provide these in the least time possible and
maintain good quality standards. Further, they provide their customers with a calm
yet youthful ambience through the use of dim lights, interesting seating
arrangement, attractive posters and a funky interior dcor. This allows its customers
to move into a different world with mouth-watering food where they can relax for a
while. Hence people like to come to this place more often for the experience and this
is why Chill Out continues to be one of the most sought after place for youngsters in
the locality.

Service Delivery System It has no provision for home delivery but the average
time taken for an order (order time) is around 10 to 15 minutes, whereas it goes up
to around 1hr in peak hours. It is thus an indicator of how long the customer must
sit idle before his/ her order gets ready, hence this is one of their drawbacks and

Chill Out Cafe 2013

they need to improve upon the same by either increasing their efficiency or by
inducing more number of employees.
Restaurants in Kozhikode
There are about 330+ restaurants in Kozhikode which includes the Five Star Deluxe Taj
Residency, Hotel sea Queen, etc. but considering our topic we would limit the scope of our
discussion to the Kunnamangalam town only. The competitors to Chill Out Caf are
ultimately other food outlets operating in the town since most of the crowd gets diverted
over their due to numerous reasons : like people usually want to have a complete meal
rather than just snacks, they provide home delivery and apart from that most of the
competitors have a bigger serving area with a much better and well developed operations
system which increases their efficiency multi-fold. Therefore they should focus on
developing their logistics so that they can get the maximum profits out of the business. Our
report highlights all the essential features involved in their daily process and after a detailed
analysis we were able to spot some flaws and general drawbacks that they could mend to
get better returns out of the business.
Direct Competition Faced in Kunnamangalam
Chill out cafe faces a direct competition with the restaurants of Kunnamaglam. A list of these
restaurants is- Pizza corner, Sangmam, Broast, Chicken Chicago etc. All these restaurants
have a larger work force than chill out cafe. Some of them like Pizza corner even have a
system of home delivery. The services in other restaurants is much more faster than chill
out cafe. Though Chill Out Cafe has a competitive advantage over others in terms of cost
and ambience, it needs to improve its service time so that at least it does not lose on the
competition with the restaurants in the nearby areas.

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Chill Out Cafe 2013

Service Process Matrix

The service process matrix for Chill Out Cafe is shown below. It has a high number of
customer interactions but the level of labour intensity is comparably low as compared to
other fast food joints. Hence, we have placed it in the category of Service Shop. The owners
and the stakeholders should emphasise on the needs of the customers on an individual basis
and serve them separately.

Service System Design Matrix

The service system design matrix gives emphasis on the quality and consistency of the cafe
services and its engagement with customers. In this design matrix, we have placed it in the
Face to Face (tight) category. In such a category, there should be high emphasis on
customer engagement and customer satisfaction. The interaction with customers has also
been a key differentiator factor with the competing restaurants in Kunnamangalam.

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Chill Out Cafe 2013

Stakeholders : The stakeholders of the cafe are depicted in the following diagram

Customers

Owners

Suppliers

Creditors

Community

Government

The aim of the current policy of the cafe is to have high level of commitment to customers
and care to customer needs. It believes that customer satisfaction is the way to success.
The owners try to provide good environment and ambience to make customers feel
comfortable.

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Chill Out Cafe 2013

Service process flow

1.
2.
3.
4.
5.
6.

Customer enters and occupies a table.

Menu is given to the customer.
Customer decides on the order.
Customer places order.
The order is noted down and passed to the kitchen.
If there are multiple orders, priority is given to the dishes that take less time to
make. Also, it is ensured that every table gets something served to it. Therefore, the
processing of orders is not on a First Come, First Serve (FCFS) basis, rather it is
based on the ideology that every customer must be provided with something to eat
with minimum waiting time.
7. Ordered food is prepared in the kitchen. Once the food is ready, it is given to the
waiter to serve.
8. The waiter then serves the food to the customers.
9. Once the customer is finished eating, the table is cleared.
10. Bill is prepared for each of the customer, and a copy is retained
11. The customer pays the bill.

Activities
Customer deciding the order
Customer placing order
Preparing food
Clearing the table
Getting the bill prepared
Customer paying the bill
Total

13

Time taken (min)

5
1
25-30
2
3
2
38-43 min

Chill Out Cafe 2013

Service Blueprint

14

Chill Out Cafe 2013

Detailed Process Flows

1) Cold CoffeeWhen the order for cold coffee is received, frozen milk is taken out from the refrigerator and
is beaten to break into smaller chunks. After this, the chunks of the milk and coffee powder,
sugar and chocolate is put into the blender. The entire mixture is blended for about 3-4 min.
After the coffee is made, chocolate syrup is added to the glass before serving. There are
daily around 20-25 orders for cold coffee. The process flow is shown in the following process
flow diagram :-

Process Flow Diagram for making cold coffee

2) Burgers
There are two types of burgers available in the cafe Veg and Non-Veg. The processes for
each of the burgers is as follows
a) Non Veg burgers For non-veg burgers, the mix is prepared at home as the food
processor is available in the home only. About 5 kg of chicken is boiled (this is used
for both the burgers and sandwiches) and then mixed with spices and grinded in the
food processes. This process takes about 2 hours. Then the mixture is made into
patties by taking chunks of it and frying. The patties are made so that they are
sufficient for 25 burgers. These patties are taken to the restaurant kitchen, and
stored in refrigerator. When the order for a non-veg burger is received, the patty is
taken out of the refrigerator and is put to warm in the microwave oven for about 1
min. In the same time, the burger bun is grilled in the griller, this process takes
about 10 min. Then the burger is assembled by putting cheese, patty and chopped
vegetables. This process takes about 5 min. The burger is then served with ketchup.
This entire process from receiving the order to serving the order takes about 15 min
to complete.

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Chill Out Cafe 2013

Process Flow Diagram for making Non-Veg Burger

b) Veg Burgers For making Veg burgers, the mixture for the patties is prepared at
home. About 2 2.5 kg of potatoes are put to boil and are mashed and mixed with
peas and other spices. (The same mixture is used for veg sandwiches as well). The
quantity of the mixture prepared is enough for about 10-15 veg burgers. This activity
takes about 1 hour. Then, the mix is brought to the restaurant kitchen and is kept in
the refrigerator. When an order is received for a veg burger, the mixture is taken out
of the fridge and is put to fry to make a patty. It takes about 10 min to make one
patty. Meanwhile, the burger bun is grilled in the griller, this process takes about 10
min. Then the burger is assembled by putting cheese, patty and chopped vegetables.
This process takes about 5 min. The burger is then served with ketchup. This entire
process from receiving the order to serving the order takes about 15 min to
complete.

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Chill Out Cafe 2013

Process Flow Diagram for making Veg burger
3) Sandwiches
There are two types of sandwiches available in the restaurant Veg sandwiches and Nonveg sandwiches. The process for each of the sandwiches is as follows
a) Non-Veg sandwich For non-veg burgers, the mix is prepared at home as the food
processor is available in the home only. About 5 kg of chicken is boiled (this is used for
both the burgers and sandwiches) and then mixed with spices and grinded in the food
processes. This process takes about 2 hours. Then the mixture sufficient for about 15
sandwiches is taken to the restaurant kitchen and stored in refrigerator. When the order
for a non-veg sandwich is received, the mixture is taken out of the refrigerator and is
put to warm in the microwave oven along with mayonnaise for about 45 s. In the same
time, the sandwich bread is grilled in the griller; this process takes about 10 min. Then
the sandwich is assembled by putting cheese, mixture and chopped vegetables. This
process takes about 2 min. The sandwich is then served with ketchup. This entire
process from receiving the order to serving the order takes about 12 min to complete.

Process Flow Diagram for making Non-Veg Sandwich

b) Veg Sandwich For making Veg burgers, the mixture for is prepared beforehand at
home. About 2 2.5 kg of potatoes are put to boil and are mashed and mixed with peas
and other spices. (The same mixture is used for veg burgers as well). The quantity of
the mixture prepared is enough for about 10-15 veg sandwiches. This activity takes
about 1 hour. Then, the mix is brought to the restaurant kitchen and is kept in the
refrigerator. When an order is received for a veg sandwich, the mixture is taken out of
the fridge and is put to for heating in microwave oven for 45 s. Meanwhile, the sandwich
bread is grilled in the griller, this process takes about 10 min. Then the sandwich is
assembled by putting cheese, heated mixture and chopped vegetables. This process
takes about 2 min. The sandwich is then served with ketchup. This entire process from
receiving the order to serving the order takes about 12 min to complete.

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Chill Out Cafe 2013

Process Flow Diagram for making Non-Veg Sandwich

Inventory Management
The level of inventory that is maintained at the restaurant is very small. Many of the
perishable items like milk, vegetables, chicken, etc are purchased on a daily basis. Other non
perishable items like spices, coffee etc are bought once or twice in a month. The materials
are bought by the owner himself as there is no supporting staff member. This takes up most
of the time in the morning, and causes the restaurant to open up late in the afternoon.
There are other miscellaneous items such as disposable glasses, tissues, straws etc that are
purchased twice in a month. The detailed breakup of the inventory purchased and other
expenses in the restaurant are given in the following table on the next page.

Quality management
The quality of the products is maintained by keeping a low inventory. All the perishable
items like milk, vegetable, chicken, etc are bought daily according to the consumption.
There is a minimum wastage of the food materials. All these items are stored in the
refrigerator so that they are not spoilt. All the prepared materials like mixture for the
sandwiches and burgers are kept in the refrigerator so that they remain fresh for long. The
food is prepared fresh and served hot to the customers.
The interiors of the restaurant are daily cleaned with disinfectant to keep it free from any
kind of rodents and pests.

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Chill Out Cafe 2013

Inventory Management Table
Monthly expenditure

Groceries
Perishable items
1. Vegetables

Monthly
expenses
(Average)
(Rs)

Quantity used

4500

Potatoes
Tomatoes
Onions
Peas

Frequency of
buying

Purchased
From

Daily

Local
Market

2-2.5 kg/day
1 kg/day
1-1.5 kg/day
1 kg/day

2. Milk
3. Cheese (Cubes and spread)

4000 8 l/day
4000

4. Chicken

8000 1.5 kg daily

5. Bread

Daily
Once in two
days
Daily
Daily

Burger Buns
Sandwich breads
6. Eggs

Non-perishable items
Spices and other materials
1. Spices
2. Coffee
Instant coffee
Roasted coffee
3. Ketchup
4. Fries
Electricity Bill
Rent
Cooking gas
Misc Expenses (Tissues, glasses,
straws)
Total

19

for 25-30
burgers
for 25-30
burgers
3360 200 eggs per
week

600 5 kg/month
2 kg/ month
1000
1500

Twice a week

Twice a month
Once a month
Once a month
Once a month
Twice a month
Once a week

6000
10000
1500
2000
46460

Twice a month

Wholesaler
Local
Market
Local
Market

Wholesaler

Wholesaler
Wholesaler
Wholesaler

Wholesaler
Wholesaler

Chill Out Cafe 2013

Capacity Utilization
Performance measure

Cold coffee

Cycle Time
Flow Time
Throughput
Daily Number of orders
received (Average)
Capacity utilization (9 hrs)
(%)

Burger

Sandwich

Veg

Non Veg

Veg

180 s
420 s
20/hr
25

300 s
900 s
12/hr
15

600 s
960 s
6/hr
25

600 s
780 s
20/hr
15

Non
Veg
600 s
780 s
20/hr
20

32.41

41.67

74.07

36.11

48.14

Blender

Oven

Fryer

Resource Utilization
Resource utilization
Measures
No. of Non veg burgers
Time taken for 1 burger
(s)
No. of Veg burgers
Time taken for 1 burger
(s)
No. of Non-veg
sandwiches
Time taken for 1
sandwich (s)
No. of Veg sandwiches
Time taken for 1
sandwich (s)
Cold Coffee
Time taken for 1 coffee
French Fries
Time taken for fries
Total time utilized (s)
Total time available per
day
Utilization (%)

20

Order
received
25
60

Kitchen Griller
25
960

25
600

0
0

25
60

25
60

15
60

15
900

15
600

0
0

15
0

0
0

20

20

20

20

60

780

600

45

15
60

15
780

15
600

0
0

15
45

0
0

25
60
20
60
7200
32400

25
420
20
400
83300
32400

0
0
0
0
45000
32400

25
240
0
0
6000
32400

0
0
0
0
3075
32400

0
0
20
300
7500
32400

22.2222

257.0

138.8

18.518

9.490

23.14

Chill Out Cafe 2013

Hierarchy of Issues

Hierarchy of issues for Chill out Caf

Chill out opened a year back. It has a lot of issues to decide on
Short term issue:
1. Scheduling of job: Currently the restaurant opens at 1 pm because some prior
tasks of bringing the inventory and preparation of filling needs to be finished. They
need to schedule the work such that none of the worker is starved by the previous
worker. Like for example the sandwich filling process starts after the inventory of the
day in brought. So the inventory brining should be completed well in advance so that
there is no delay in opening the restaurant.
2. Scheduling of machines: Need to monitor that the work machines perform on
daily basis. To make a proper use of resources to manage the peak hour rush.
Short- to intermediate issues:
1. Inventory Management: The planning of when to buy the inventory should be
done under this stage. For e.g. the perishable items like the vegetables, milk, and
breads should be bought on daily basis and the non perishable items like coffee,
sauce, tissue paper etc can be bought on monthly basis.
2. Quality Control: The quality of the product should be checked from time to time.
In case of restaurants this can be checked by maintaining the quality of the
inventory and keeping hygiene.

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Chill Out Cafe 2013

3. Forecasting: The forecast of the customer demand and the levels of inventory
needed are a part of this stage. Currently there are 4-5 eating places in
kunnamaglam, on the basis of this they need to forecast how much will be the
demand of the customers.
Intermediate issues:
1. Personnel needs: Currently only two people are employed in the caf. The
intermediate decision to be taken is whether they should hire more people. For eg- A
person separate person can be appointed for cleaning and taking the orders.
2. Facility Utilization: Currently a balcony in the caf is dedicated as the smoking
zone. So sometimes they tables in the balcony are not occupied for the eating
purpose. They need to take the decision to do away with the smoking area so that
the facility utilization can be improved, without much increase in the cost.
Long term Issues
1. Capacity planning: It involves the decision as to increase or decrease the capacity
by taking a look at the trends of the demand.
2. Facility size and Utilization: The current area in which the restaurant is step up is
rented. In the long term they need to decide whether they should continue in the
same space, or move to a bigger space.
3. Product and Process design: The current procedure involves both machine and
manual steps to complete the dishes. For the future they need to take the decision
to involve more machines and food processors to speed up the work.

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Chill Out Cafe 2013

Recommendations
As per our study we suggest the following recommendations1. Increase the workforce: More people should be employed in the restaurant. It will
remove the bottlenecks in the process and make it more efficient.
2. Bottleneck griller: In the process of making both the sandwiches and burger, the
bottle neck is the griller, which takes about 10 minutes. At a time jjust one of each
sandwich can be grilled. So we suggest to add one more griller.
3. Start home delivery: A major chunk of the customers are the students. They
prefer to get the food delivered in their room itself. Pizza corner capitalizes on this
fact to increase their sales. Thus we suggest Chill Out cafe also to start the home
delivery service. It will require a onetime investment of 60000-70000 to buy a vehicle
with a carrier, and he can keep an employee to make the delivery, whose salary can
be made proportional to the number to deliveries he makes.
4. Improve the system of raw material procurement: Currently the owner
himself goes out to buy the inventory. Since he purchases some of the vegetables
from the kunnamaglam market itself, we suggest him to make an agreement with a
nearby vendor to deliver the vegetables at the restaurant itself on daily basis, this
will save his time and he can use this time to make the initial preparation of the
fillings.
5. Increase the use of technology: the bills and order taking system is manual. We
suggest that to improve the documentation and speed up the process, he should
computerise the system. We also suggest installation of a card swipe machine,
because these days the use of plastic money has increased. Computerization requires
initial heavy investment, but it pays off in the long run.

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Chill Out Cafe 2013

Exhibits
The ambience and sitting area of Chill Out Cafe is shown pictures in Exhibit 1

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Chill Out Cafe 2013

Menu of Chill Out Cafe in Exhibit 2

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Chill Out Cafe 2013

26