Question

Identify a business that you are familiar with or have dealt with in the past (coffee or fast food shop, etc.) and comment on two activities that you have observed that, in your opinion, are non-value-added. What recommendations would you make to the business to improve the situation?

Answer 1

Business that I familiar with, is that Fast Food Shop and there are few activities where there will be no value added in certain circumstances like purchase of raw materials more than required and the second one is the cooking/making of more food than actually required to sell on that day.

Purchase of raw materials more than required:

Most of the raw materials used in this fast food have some expiry date and anything is purchased more than the requirement will be wasted, and the cost of such raw materials do not add any value to the Fast Food Business. The recommendation to improve this situation is that, based on the recent business flow and season, estimation of sales should be done so that based on such estimated sales, how much raw material will be required daily or weekly can only be purchased. Since, it is a food business so it is suggested to purchase the raw materials daily or weekly based on their nature/durability. Also, purchases of raw materials can be estimated based on the closing stock and requirement in estimated sales.

Cooking/making of more food than actually required to sell on that day:

In order to develop in fast food business, the first thing is to provide quality food to the customers. To provide quality food, there should be proper plan on the quantity as well while preparation of food. If not then the cost of such food will be wasted and add no value to the business and moreover, it results into losses.

The recommendation to improve this situation is that, based on the daily sales or specific day sales, preparation of the food should be planned.