THE PROJECT REPORT about OPERATION MANAGEMENT COMPANY THE COFFEE HOUSE

THE PROJECT REPORT
About

OPERATION MANAGEMENT
COMPANY: THE COFFEE HOUSE

●

Lecturer: Ph.D. Tran Cong Thanh

●

Name group: Group 1

●

Project name: The operation management of The Coffee house

Ha Noi, June 9, 2021

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ASSIGNMENT EVALUATION

%
f

No.

o

contribution

1
●
● Make outline and brainstorm ideas
2
●

Executive summary

● What is the operation
management of the coffee house?

3
● Operation management
objective
4

Vương Duy Việt
(Team member)

Vũ Thành Trung
(Team leader)

100%

100%

Nguyễn Ngọc Hương

●
●

Action management issues
Conclusion

5

Mai
(Team member)

Ngô Việt Trường
●

Inventory management

100%

(Team member)

100%

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Table of Contents
I.

Executive summary .............................................................................................

II. What is the operation management of the coffee house? ..........................................

1.The input ..........................................................................................................

2.The process ........................................................................................................

3.The output ........................................................................................................
III. Operation management objective ................................................................................

1.Coffee quality ...................................................................................................

2.Time ..................................................................................................................
IV. Inventory management .................................................................................................

1.Definition ..........................................................................................................

2.Step for the coffee house to manage inventory .............................................

3.Recommendation ...........................................................................................
V.

Action management issues ................................................................................

1.Supply chain management of The Coffee House ........................................

2.Total quality management .............................................................................

3.Just in time (JIT) ...........................................................................................

4.Forecasting .....................................................................................................
VII. Reference ......................................................................................................................
APPENDIX .........................................................................................................................
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I. Executive summary
Operations management is a field of management concerned with the design and
control of production processes and the redesign of business operations in the production
of goods or services. Related to the management of the entire production system is the
process of converting inputs (in the form of raw materials, labor and energy) into outputs
(in the form of goods and/or services), as an asset or providing a product or service.
Product manufacturing, quality control, and service creation. This report, our group
wants to analyze the operation management of The Coffee house by using the knowledge

we have studied in the subject: Operations management.

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II. What is the operation management of the coffee house?
● Analysis of The Coffee House Operations
There are three main steps of the sales management structure in the coffee house:
input, process and output.
1. The input
The input of the Coffee house includes customers and the ingredients for making
drinks and food.
The ingredients must be strictly controlled to choose high quality, providing the best
beverage experience for customers. In the coffee house, from the first stores, they have started a
partnership with Cau Dat Farm to grow coffee according to our own standards. Through a strict
roasting process under the hands of leading coffee experts in Vietnam, coffee beans with uniform
quality, rich aroma and the inherent balanced taste of Cau Dat coffee beans will be brought to all
stores on The Coffee House system to serve the customers.

The customer comes to the Coffee house to enjoy the drinks and food. Moreover,
this is the place that they can connect to their friend, college or another relationship.

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2. The process
The process of serving drinks and food at The Coffee House includes making coffee
for customers and customer’s care when they wait for their drinks.
" Before - In - After. "
Customers with a need to use store drinks will be welcomed by the employees, who are
instructed to choose suitable beverages for the taste. After receiving the customer's drink, the
employee will have the duty to make the right drink the guest asks for and bring that drink to the
table to enjoy it. If the customer has any other requirements, the staff at the store will come to
service so that the guests' experience is always good.

The employees will instruct customers to enter the cashier's counter to order the
drinks, the cashier will guide the guests to choose the beverages according to the
customer's needs, based on the menu placed immediately, and the small menu is placed
on the menu table. In addition to some exceptional cases at the store, when new
beverages, seasonal drinks, combo, different promotions. At the cashier's shop, will they
need to ask whether they want to try that drink? Not only that, but the stores have snacks
like salty cakes. If combined with the guest's drinks, it adds to guests' meals.
Payment will occur after the order is completed, at the Coffee house's payments including
cash, online banking, card, momo. Since the coffee house uses both mobile apps
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on both IOS & Android platforms in which the customer's information will be stored and

other offers membership, the cashier also needs to ask customers to help customers with
the shopping. The payment is complete; the employee will give his client the invoice and
some table based on the ordinal number on the invoice and not forget to the customer
who used his service.
After ordering and paying, customers will be instructed to sit and wait for their drinks.

Customers will be served water and enjoy the music.
In addition to the invoices that the cashier gave customers, there would be a copy
of the employee bill that would keep sending the bartender. From here, the bartender
would sort the bill in order and start making things. The implementation of the drink
must comply with the formula and complete within a given time for each invoice, except
when there are too many drinks at the time, the cashier will have to ask for a client's
permission to produce later (from 10 to 15 minutes). After the bartender completes his
part, he will send a drink for his staff to do the rest.
From here on, the staff will finish the drink following what has been specified
from the top of (with a hot drink such as coffee, chocolate, mathe coffee houses will be
left with a long spoon and a paper pipe that is placed) side, which a paper pipe will
accompany. When it has finished, the staff will arrange a drink again and put it on the
tray simultaneously, arranging the proper invoices for that drink and ready to go.
The staff will go to every corner to find suitable tables for the drinks and deliver
them to the guests. When the delivery has been done, the employee won't forget to say, "
enjoy your meal " to customers.
From here, customers will use their drinks if any problems occur such as drinks,
space, etc. Customers can call their employees directly to help if they are uncomfortable,
and the customer can still resubmit their experience at the store through an existing app.
After each app transaction appears a review table for the customer at several stars from 1
- 5, depending on the customer satisfaction level after making the evaluation table, it will
directly be sent to the store manager if there are a low number of issues or issues that
have complained. It's best to make customers experience when using the store at best.

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3. The output
After enjoying the service and quality of the coffee, customers will have the assessment of
the products that determine their brand loyalty. At The Coffee house, they have designed an app
for the customers to respond to their feelings or not be satisfied about the products or staff. Get
feedback on the spot, if there is a problem, they will handle it immediately, avoiding a crisis. For
example, the writer once wrote a review through the app about the coffee cup with some powder
on the bottom, less than 5 minutes later the manager came and asked for permission to make a
new cup. Moreover, when customers order online: for every 10,000 VND, they will get 1 point
and 50 points corresponding to 500,000 VND, you will receive a drink of their choice. Customers
have voluntarily updated their information and they have more motivation to come to The Coffee
House and get the promotion.

III.

Operation management objective

1. Coffee quality
To achieve success today, the last seven years The Coffee House continuously
pursued actual coffee value, "non-season." It's like a religion, in a belief and grit aspect.
Do the right thing; it may not see the short term immediately, but in the long run, you will
surely reap the sweet because it is the right way to go.
The coffee house recognizes that Vietnam ranks second in export but is raw
coffee, used as raw materials for extracting components such as caffeine. We also have

high-quality coffee but no brand and hidden source. That proves that Vietnam can grow
good coffee but depends on buyers, world markets. It’s time to build a reputation
for high-quality Vietnamese coffee.
The coffee house began the journey of self-producing, providing raw materials,
and giving natural coffee to the customers. From the farm at its land bridge: production
according to modern processes to improve the value of Robusta and arabica of Vietnam.
Conservation of typical, yellow cat of local and imported varieties of coffee from Costa
Rica. Testing preparation methods from the world's famous coffee countries with future
goals will bring Vietnamese coffee abroad with a new mentality.
"From farm to cup" – “từ nông trại đến ly cà phê” is the whole process from the
time the enterprise incubation, the harvest control, the preparation, and roasting in the counter.
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Behind the journey a drop of coffee was carried to the customer's hand, the collective
effort of many people. To enjoy a cup of coffee usually only takes 30 minutes, but to take
care of the coffee tree that yields fruit takes three years. And it takes two more years to
get the best quality coffee. The coffee house silently incubates the first coffee trees from
three years ago, as soon as the dream of "THE COFFEE HOUSE" is hatching, and it will
undoubtedly need more "three years" such as this exciting journey.
2. Time
While quality is what customers focus on the most, preparing a drink will affect
the customer's mood to enjoy the drink. Customers do not require drinks to be served
perfunctorily, but they do not want to wait too long for their drinks. Beverages are
required to meet the expected 5 – 10 minute maximum wait time. When managing such a
professional and reputable brewing process, the baristas will not spend too much time

making drinks and cause trouble to customers.
IV.

Inventory management
1. Definition
Inventory management includes aspects such as controlling and overseeing purchases

— from suppliers as well as customers — maintaining the storage of stock, controlling
the amount of product for sale, and order fulfillment.
2. Step for the coffee house to manage inventory
● Step 1: Statistics of numbers
This is one of the key factors influencing the budget. THE COFFEE HOUSE will
take measures to limit fluctuations in the supply of food in its warehouse. This is also the
most likely stage of the loss. THC used to get this job done.
Make a list of:
Raw material: is a raw material that is sold or kept for production in the future,
sent for processing and bought on the way home: sugar ice, coffee beans, math coffee
house, ice cream ...
Finished product: is the finished product after the product process.Such as
:cakes, bread, etc.
● Step 2: Use the treatment system
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If you want to manage in detail and accurately the import and export situation of
raw materials,

The coffee house uses the software. The recipe declaration of the software
products will take up a lot of time at the coffee house, Include the goods declaration, raw
materials list, then set quantity for each item. With a list of about 100 product it will take
about an afternoon to sell.
You need to input raw materials every day in the software with the recipe available:
Net balance = Beginning Stock + Import - Export
● Step 3: Check inventory regularly to minimize errors
Warehouse management is not easy, there will be a lot of problems around import
and export you have no control, such as the employee forgot
Do not enter the receipt of goods into the software, the staff enter the warehouse
wrong number, sales staff did not enter the software, sold the wrong product, the formula
was much wrong. This makes the data on the software skewed with reality and only
inventory that you know.
3. Recommendation
The solution for inventory management is that the company should apply the FIFO
Method (First In – First Out), this is an important principle in inventory management. First in First out means that the items you first entered need to be used first, which is especially necessary
if you are selling perishable products. Therefore, firms make sure that products are not left in
stock too long. Materials imported first will be processed first, material imported later will be
processed later. So the quality of the drink will be guaranteed.

V. Action management issues
1. Supply chain management of The Coffee House
First of all, The Coffee House has their own supplier which is Cau Dat farm. There,
they provide the finest and aromatic Arabica coffee beans in Vietnam. The Coffee House
also has producers which bring packages and cups. Under the control of the management
team, the quality of these products is guaranteed. The beans after harvest will be roasted,
grinded and stored in cold storage. In every store, the manager of the store orders the use
of term-type orders filled which include coffee beans, milk, takeaway cups, straws, etc,
ordering volume = demand – inventory.
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Secondly, about the inventory file, everyday before work, the manager must
check and calculate the inventory of raw materials. Suppliers will deliver materials to
each store. Thirdly, it is about distribution planning, staff in the store receive and prepare
orders to serve customers at the table. The Coffee House also takes orders via the app,
then the staff prepares, packs and ships the drink to the customer.
Finally, about customer service, THE COFFEE HOUSE welcomes any questions,
comments, feedback and looks forward to receiving your information. Those comments
help them strive to provide the best customer experience possible. Customers can leave
comments on their fanpage or customers can review on the app THE COFFEEHOUSE
and they will try to reply to you as soon as possible.
● Issues
There are a large number of issues in supply chain management but I will share some
main issues which affected a lot. The first one is cost pressure. Labour costs continue to rise and a
lack of local materials. The cost of preserving raw materials is also high. The product that comes
to customers must be the freshest. Secondly, there is a decline in the profit of stores. Determining
the areas that supply chains are impacted by controlling by local policies. This led to disruptions
and bottlenecks due to strict inspection on food safety.

● Recommendation
Communication and collaboration between supply chain control teams, building
business operations, purchasing, logistics, etc. are essential to reducing individual work
and risk throughout the chain. They are taking advantage of the latest developments in
automation to increase productivity and reduce costs, improve storage capacity and
consolidate manufacturing and distribution operations, and maximize service levels,

system flexibility and operational resilience. Firms should try to simplify and improve
the supply chain to increase efficiency and profitability.
2. Total quality management
The total quality management that the coffee house wants to focus on is the quality
of the Vietnamese coffee. Customers experience the best cup of coffee.
“People define good coffee as bitter and smooth. For the past 5 years, our regular

customers say that the coffee is as watery as tea. I travel to many parts of the world, but I
have found that they do not add additives like coffee in Vietnam, that brings me down
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compared to the world. The cultural things are preserved, and what makes us set back
should change. My coffee culture is coffee filter, not marinade coffee” - The CEO of
the coffee house said.
The Coffee House Blend is a unique blend of coffee at The Coffee House chain.
The principle is always put on top to ensure pure taste is sent to customers. The coffee
beans are strictly selected from the ripe fruit of the latest season, are harvested entirely by
hand, reaching the ripe fruit rate accounting for more than 95% of the harvest.
The roasting and blending recipe of Arabica and Robusta beans of The Coffee House creates a
balanced overall bitter, sweet and sour taste, helping coffee to be bold and fragrant.
The Coffee House wants to bring the best service to the customer. In term of Staff, All
staff must experience a severe training course to make sure the unique flavor and therefore the
quality of nutrition for his or her drink consistent with the group’s standards.

● Issues

The issue of processing drinks of The Coffee House is that when we receive
customer complaints about the quality of the drink, we will have to review all the parts of
operation from importing the ingredients to the processing staff and how to preserve the
materials. Moreover, the attitude of the staff is sometimes unpleasant.

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● Recommendation
For the drink, The Coffee House ought to verify the quality of products that
suppliers have provided. When using a machine, every day, we must clean all of the
machinery and examine them every two weeks. If something goes wrong, we must do
maintenance to ensure the food's quality. The process of labor recruitment is carried out
strictly and fairly and training must be conducted regularly. To improve workers' sense of
responsibility, they are forced to be punished if they are wrong.
3. Just in time (JIT)
● Definition:
Strategy to increase efficiency and decrease waste by receiving goods only as
they need them for the production process, reducing inventory costs.. In the F & B
chain , it means to produce right after receiving orders.
● Matter of F&B chain:
The speed at which goods are delivered to clients is a major factor of customer
satisfaction and competitiveness. The more quickly a product is cycled, the more profit
the brand earns. Suppliers of material sources require technological investment and
employees to maintain, they must always contain large amounts of ingredients and be
ready to deliver at time. If suppliers excess or little than actual need, there will be waste

or slowdown in process causing great loss in money. Customers require fresh and healthy
drinks, suppliers can cause some products to become unqualified to be used, an accident
related to food poison can damage the image of the brand heavily.
● Objective of JIT as solution:
Customizing products as needed, improving the features of the products, and
improving satisfaction. Control the delivering rate, make it easier to estimate the amount of
ingredients needed to be stored, decrease the amount of waste in both material technology, and
humans to operate the storage. Keep the quality of products, from the beginning to the end as
packing and serve to buyers, to avoid any accidents that can happen in the process. Shortening the
time of supply leads to faster product cycles, helps firms to gain more revenue, and allows them
to spend extra stocks on other activities (HR training, technology...)

● Implementation of JIT in beverage chains:

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There is a recipe for each kind of drink, bartenders will receive orders and use
raw material to do drinks. When the material in storage is not full enough, it is a signal to
fill the storage. Staff will not do orders if the number of materials does not reach the
quality. This also helps the storage process, as it provides average sales each day , the
forecast will be much easier , so that waste of material and other resources are minimal.
● Benefits of JIT:
Sufficient reduction of warehouse expenses: Companies using JIT can reduce their

storage expenses and costs associated with warehouse management (its rent, upkeep,

stores etc.).
Saving money: JIT users can save money spent on extra stock that is lying on the shelves
waiting for an order to come. Inventory levels are relatively low, so is the risk of having extra
stock. This also means a benefit for the customer - as the lowered operational costs may bring a
drop in end prices, which brings more demand and more market share.

Time is money: JIT implies that the amount of time needed for supply chain
turnover is small. The quicker retailer or manufacturer ships the order to an end customer,
the better. And logically, the quicker he gets the components or goods from a supplier, the
better. JIT strategy helps to quickly adapt and react to customer demand change,
increasing the sales of top-demand bestsellers while lowering the production or supply of
unwanted goods. Drawbacks of JIT:
Domino effects: If a consistent and stable supply chain is broken, the damage is terrible.
If any problem occurs - either a force majeure, human-caused issue, even a time gap

- the result is considerable for each player. Schedules are tough, and any delay or shift
can again damage the supply chain triggering a domino effect.
● Recommendation:
Invest more money in HR training: This method allows firms to minimize the
number of employees, but those staff must cooperate well to make the chain work. If a
problem arises for any cause, it will quickly break down all parts of the supply chain. So
that each staff must communicate and coordinate effectively to figure out suitable
solutions. As a solution, more investment in HR management will be needed to keep the
process working well, specially training employees to multi-tasking will enable them to
work as a team and solve problems quickly.
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False forecast and resource supply matter: As the information is from store to
store, using sophisticated inventory analytics and tools is highly recommended, to keep
the reports in time and exactly, thus replacing calculations by humans with computer AI,
is a good way to figure out customer trends and sales numbers.
4. Forecasting
● Demand
The Coffee House has over 100 stores across Vietnam that serve over 40,000
customers a day. As the behavior changes due to customer taste, THE COFFEE HOUSE
must update the new trend. The Coffee House should use a quantitative approach to
improve the quality of products which will satisfy customer’s desires in real time.
● Issues
Stiff competition: Because of the huge demand for coffee- even in social situations,
it is not uncommon to find a coffee shop in every corner. There are many choices such as
Starbuck, Highland, ...
Customer service: Customer service has a huge influence on customer loyalty
and retention. Provide training for your staff on how to relate with customers and good
teamwork to ensure fast deliveries.
Managing employees: Human capital is usually the trickiest resource to manage
in operating. Take the time to intimate your employees on the objectives of the business
so that they can work towards the same goals.
The goal of THE COFFEE HOUSE is to improve the quality of the product to enable
them to deliver happiness to the customer. They still maintain their 4 values to retain the
customer which are Sincere, Caring, Creative and Brave.
● Management
Automate inventory ordering by using a technological system which is POS system .

A POS enables you to keep track of all your inventory, preventing losses from theft and
errors made when taking orders from customers. It also helps baristas and chefs work on

orders swiftly and efficiently.
Customer service receives feedback from buyers about the quality of their drinks,
what customers want, which seasonal drinks they like so THE COFFEE HOUSE will
develop a suitable menu for each season based on customer needs.
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● Recommendation
Developed a new type of snack and offered it to customers on the house after
purchasing beverages such as: Peanuts, chips, etc
In the coffee market, there are very few cafes that offer free snacks to customers
after they order drinks. This service will make a difference for The Coffee House. The
prices of these snacks are very affordable but can imprint on customers' minds a new way
of serving. Because many customers will feel short when only drinking one cup of
coffee. These snacks will not affect the sales of other cakes in The Coffee House because:
snacks will not only make customers full but also snacks will mainly be salty. Makes The
Coffee House will lead cafe market in terms of this service
Opening a souvenir shop at the store not only helps the restaurant increase
revenue but also enhances the brand awareness of the coffee house to customers.
VI.

Conclusion
Through this report, the managers can understand clearly the system in The Coffee

House. And with above suggestions, a ground will be put forward for The Coffee House to have
next strategies in the future. In general, The Coffee House has achieved proudly results in the

process of building the brand. Service in this coffee shop is highly appreciated in private cafe
industries in Hanoi. Thanks to this report The Coffee House will find out the best solutions to
reduce the cost as low as possible and to provide the best value to the customer.

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VII.

Reference
1. The Coffee house, About the coffee house, available at
< [view at May20, 2021]
2. Brands VietNam, Team mAPP, The advantage of The Coffee house when
they use app, available at
< [view at May20, 2021]
3. Tapchicongthuong, Supply chain of The Coffee House:
[view at June1,2021]
4. The coffee house, Hanh trinh tu nong trai toi ly ca phe, available at
< at June1,2021]
5. The coffee house, Quality of coffee
[view at
June 1,2021]

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APPENDIX
GROUP WORK –EVALUATION

Assignment Topic

Assessment activity

The Operation Management of The Coffee
house

Group Presentation and report

1. What proportion of the group work did you contribute, in % terms?
GROUP 1
No.

Full Name

1

Vũ Thành Trung

2

Ngô Việt Trường

3

Nguyễn Ngọc Hương Mai

4

Vương Duy Việt

2. What was your key learning from this activity, both in relation to the topic
covered as well as the group activity itself?
The subject helps our team gain experience and knowledge about the operation
management. We understand how to analyze and better understand the process in the operation
management in a company. We can apply what we've learned about this subject to real-life
circumstances like The Coffee house and it helps us to remember longer. Furthermore, we also
realize that there are a number of outstanding issues affecting the operation management,
negatively affecting productivity as well as profits. We also feel lucky to be able to act as the
people who make suggestions to solve the business problems.

In addition, this is also an opportunity for us to work as a team, listen and share
ideas, discuss problems and come up with solutions to improve the quality of reports as
well as create good results for the team.
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3. Do you have comments on the task, process or group dynamics (e.g. that

would help us to improve and develop the task for next year)?
My team has no idea about the mission nor the motivation. But if there is an actual
business tour, it would be perfect!
4. Please state how you used the group feedback to develop your group report.
In order to be more effective when working as a team during this covid season, we
have set up a facebook group where we can chat. At the beginning, we called a video on
messenger to discuss the ideas that should be included in the report, all parts of the report we
discussed together to clarify on the content, then the team leader would divide the tasks equally.
Every week, we would discuss difficulties such as not finding information or how to present it
into the assignment. During the process, we openly share our thoughts with the teammates so that
other members can offer feedback and help us improve our part.

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