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Restaurant Industry Service Process Design

Executive Summary

Effective service process development and implementation entail the interplay of various operations management considerations and decisions. The central aims of new service design to strengthen a firm’s competitive position and enhance process efficiency. This paper identifies the influential factors in the service process development in light of supply chain dynamics, market variables, and demand and inventory management in the restaurant services industry. Further, the performance objectives that affect the operations management decisions relevant to service process development in the context of the restaurant services industry are discussed.

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Firms set competitive priorities to guide their manufacturing/service process design. In the restaurant business, the service delivery process may be designed to reflect consistent quality, on-time delivery, volume flexibility, or product customization, among other priorities, to bolster a firm’s competitive position. Further, process management decisions related to the process choice, resource utilization, customer preferences, and supply chain management (SCM), among others, must be made to support the set priorities. Efficiency in restaurant service delivery is founded on the principles of effective demand management, inventory management, marketing, procurement, and SCM centered on quality and customer satisfaction. This paper aims to analyze the factors influencing the service process design in the restaurant industry and the operational performance objectives that affect process design decisions.

Factors Influencing the Restaurant Service Process Design

The central aim of service process design is to provide quality and desirable services to customers. A service process has various touch-points, including “people, information, products, and spaces” that customers experience (Johnston & Clark 2008, p. 26). For a restaurant, the points of contact during service delivery include the menu, seats/settings, and waiters interacting with the customers. Service design focuses on “creating and defining” how the various service touch-points interact among themselves and with the customer (Johnston & Clark 2008, p. 32). Therefore, service process design is user-centric, i.e., it focuses on the behaviors, needs, and preferences of clients, suppliers/partners, and/or employees.

Multiple factors can be considered influential in the design and implementation of restaurant service. The factors fall into three broad categories, i.e., service success factors, new service development drivers, and organizational factors.

Service Success Factors

The service success factors are influential contributors to the design of the service process. They influence the capacity of the service to meet customer needs. The first factor is unique or better quality service. A distinctive or superior service is adaptable to the ever-changing customer needs or trends. The design of such a service makes use of modern technology, focuses on quality, has inimitable advantages, and entails substantial resource flexibility (Melton & Hartline 2010). The level of adaptability of a firm’s resources, i.e., equipment, capabilities, and staff, depends on its competitive priorities at the time. For instance, for short-cycle or highly customized services, the design of staff tasks or machine utility tends to favor general-purpose as opposed to specialization. This form of adaptability is known as product customization (Melton & Hartline 2010). Restaurants also use volume flexibility to meet demand fluctuations. An example is a fast-food restaurant operating on a 24-hour cycle to meet market demand.

The second factor affecting the service process is staff expertise. Ideally, competent and skilled staff is required to implement the service and build consumer confidence in the facility. As the key ‘touch-point’ of customer contact, the restaurant staff, including the waiters, influences consumer valuations of the service through a display of “motivation, friendliness, courtesy, and efficiency” (Neu & Brown 2005, p. 14). Further, their capacity to respond to customer complaints helps reinforce positive perceptions of the service. Besides culinary and customer care skills, technological knowledge may be required to strengthen a facility’s online presence and engagement.

The operations manager must make a decision related to the level of worker flexibility suitable for the facility. A flexible workforce can handle multiple tasks or perform any role. However, achieving greater flexibility requires additional training to equip employees with more skills. In restaurant settings, staff flexibility enhances service reliability and optimizes capacity during peak hours. The staffing requirements of a restaurant rely on its volume flexibility. If the service process requires a non-fluctuating output rate, then a full-time workforce is needed. However, if the service involves daily or periodic rises and falls in customer numbers, then the part-time staff would be required to support the core workforce. For restaurants, hiring temporary waiters and servers may be a viable solution for addressing capacity bottlenecks (Chen & Wallace 2011). However, this strategy may be impractical for culinary tasks that require specialized skills.

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Another service success factor is providing a service with a perceptible/tangible identity. Since services are intangible, firms can ensure users identify with their offerings through perceptible product cues. In other words, the service design should reflect the core attributes to enable customers to conceptualize it and assess its benefits (De Brentani 2001). Therefore, a high level of product customization is required to capture the needs and preferences of the identified segments. Customization requires all-purpose equipment; hence, it is associated with low fixed costs (De Brentani 2001). In contrast, providing a specialized service entails heavy investment in tailor-made equipment. However, this approach comes with greater efficiency when the output rate is high. For a restaurant, customized output and equipment selection, including seats and entertainment, would influence the customer’s perception of service quality.

New Service Development Drivers

The development of a new service requires staff participation and expertise. Therefore, one of the influential factors in new service development (NSD) is staff involvement or engagement. It entails the process of involving the “front-line staff in the development process” (Neu & Brown 2005, p. 14). A staff engagement strategy motivates front-line employees and builds essential skills for new service development. One extrinsic engagement strategy is career training and development. To bolster staff expertise in culinary practices or waitressing, adequate training is required to educate them on the service offerings and delivery strategies. The process of NSD also requires staff buy-in and support, which could be achieved through in-house marketing.

A second influential factor in NSD is the level of formalization within the firm, especially in adopting a new service process. Studies show that the formalization accelerates new service development in most projects (Buganza & Verganti 2006). However, in turbulent times, non-formalized strategies can be more successful than formal ones. For a restaurant, introducing a new menu item or self-service would require flexible timelines as opposed to fixed deadlines to gauge the customer response.

The success of a new service process also depends on management actions. Aspects of top management, including a strong affirmation of staff innovation, risk-taker disposition, and customer focus can bolster new service development. The management plays a role in all the phases of the design process. A common approach used in new service development is the ‘double diamond’ model, which maps out the process from a ‘systems thinking’ or concept level to measurable objectives. The model comprises four stages, namely, “discover, define, develop, and deliver”, as shown in figure 1 below (Chase, Jacobs & Aquilano 2004, p. 55).

Therefore, pro-active management measures are needed to drive the various phases of the service design process. In particular, the management must seek to know the needs and preferences of the consumers through market research. This strategy will ensure that the service ideas are not only desirable but also relevant and responsive to customer needs. For instance, a restaurant can utilize customer feedback to introduce a new item on its menu list. Another management action is the iterative testing of new ideas to transform them into tangible products or services. Modeling the service flows helps refine the service through feedback from the users. The management can act on the views patrons frequenting the establishment to offer more relevant and better entertainment or layout options.

Figure 1: The Double Diamond Model
Figure 1: The Double Diamond Model

Consumer involvement is another influential factor in new service development. From the double diamond model, it is clear that customer involvement is necessary for the ‘discover’ phase. Customer input is particularly significant during the idea generation phase (Melton & Hartline 2010, p. 416). Further, customer engagement throughout the NSD process has a significant effect on “service marketability, launch preparation, and operational outcomes” (Melton & Hartline 2010, p. 417). Therefore, the degree to which consumers participate in service development influences service customization and acceptability. Consumer participation may occur through self-service options, service customization, and decisions on the location or time of service delivery.

Self-service is often utilized in situations where cost is a competitive priority. Patrons often frequent restaurants that offer competitive prices to save money. In the self-service model, a fast-food outlet allows customers to participate in the service process previously performed by staff. In this way, the restaurant can cut down staffing costs that are then passed on to patrons at lower prices. Customers may also be involved in product selection or development. For example, Taco Bell a restaurant specializing in fast-food Mexican dishes runs campaigns to develop the best burritos based on customer recipes. Customers also determine the time and location of service delivery through online orders and bookings.

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Organizational Factors

Market orientation at the organizational level is an influential factor in service process development. It entails organization-wide market forecasting and competitor analysis to identify opportunities for developing and implementing new concepts or service models (Menor & Roth 2008). The key characteristics of market orientation include market research, competitor analysis, and responsiveness to consumer needs (Menor & Roth 2008). For restaurants, the analysis of the target market and competitors can influence the menu and entertainment offerings provided. The advantages of ascribed to market orientation include improved strategy-market alignment, better financial performance, and radical innovation.

Technology utilization also has a significant influence on service development. It defines a firm’s capacity to use technology in service development and delivery. In firms, technology helps bolster service innovation and development to achieve greater “synergy, usability, and support” (Neu & Brown 2005, p. 16). For instance, gourmet restaurants usually deploy marketing information systems to gather consumer data to develop tailor-made services for new markets.

Service operations are influenced by two interrelated factors, namely, the level of customer involvement and capital requirements that have implications for management action. These factors affect four service processes, i.e., “professional service, service shop, mass service, and service factory”, as shown in the matrix in figure 2 below (Chase, Jacobs & Aquilano 2004, p. 64). In a restaurant setup, the professional service may be the high-skill roles offered by a chef. Gourmet restaurants are like a service shop because they offer quality based on the unique needs and preferences of the target segment.

Service-Process Matrix
Figure 2: Service-Process Matrix

The management of knowledge within the organization also influences the service process design. According to Leiponen (2005), an effective knowledge management strategy must involve “external knowledge sourcing” and a framework for knowledge sharing within the organization (p. 192). Besides, a firm’s organizational culture has a significant impact on service process development. A supportive culture built by the management can foster innovation, customer involvement, and market orientation to create capacities for new service development. Moreover, an organizational culture of learning and skill development can bolster NSD efforts.

A firm’s SCM strategy can also affect its capacity to develop and implement a new service. Management decisions on the degree of backward integration with suppliers can affect fresh supplies or services received. Backward integration involves supplier relationships to boost raw material acquisition or support quality. For example, a restaurant chain can collaborate with certified local suppliers for a consistent supply of beef or groceries or organically produced chicken. This approach enhances the quality and supports inventory management. Some restaurants outsource low-volume tasks to specialized firms to achieve cost savings. For example, small facilities that require few hard-boiled eggs often outsource this function to Atlantic Foods, which can prepare over 10,000 eggs per shift.

Operational Performance Objectives Influencing Process Design/Layout Decisions

The central aim of operations management is to balance the competing interests of its stakeholder groups, especially those of customers, shareholders, suppliers, and employees. The five performance objectives that influence firm decisions related to service design include “quality, speed, dependability, flexibility, and cost” (Heizer & Render 2006, p. 53).

Quality is a crucial objective of operations management. It can be defined as the conformance to the set specifications for a product or service. A focus on quality brings two main advantages to the firm. First, an emphasis on superior quality service reduces customer complaints, which translates into greater customer satisfaction. Management decisions to adopt quality improvement initiatives, e.g., offering meals made from fresh, organically produced ingredients, may be motivated by the desire to improve customer satisfaction and grow revenues for the restaurant. Second, a quality focus reduces errors in the operational processes and activities by improving the response time, which leads to cost savings. For restaurants, rapid response to requests can enhance dependability and create positive consumer evaluations of the service.

The second performance objective is the speed of response, which can be understood as the duration elapsing before a patron receives his or her order or the service requested. The patrons often view a quick response favorably; hence, low response time is likely to increase the return rates. Cafeterias usually use the line flow process or layout to organize their service in a linear sequence. They use a make-to-stock approach to prepare standard items before receiving client orders. This strategy ensures that there are no inventory delays as orders are processed beforehand. Internally, a speedy response contributes to cost reduction through effective inventory management, which lowers the SCM risk. When orders are processed quickly, it decreases the turnaround time of the cafeteria, leading to its optimal utilization.

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The performance objective of dependability emphasizes “being on time” in service delivery (Heizer & Render 2006, p. 54). Customers expect to receive service promptly as promised by the provider. Management decisions to renew or reject a supplier contract depend on the dependability of the supplier. Restaurant management is likely to retain reliable suppliers of groceries or dairy products that require daily inventory replenishment. Late delivery of customer orders can cause dissatisfaction with the service and poor ratings. Building highly dependable systems save time as well as costs and enhance internal efficiencies, which translate to better quality service. Restaurants achieve this through backward integration with suppliers, outsourcing, and in-house factories to supply ingredients such as meat.

Resource flexibility, as a performance objective, entails “being able to change the operation in some way” (Heizer & Render 2006, p. 55). Management choices determine the level of flexibility in a firm. For instance, for a restaurant, items, e.g., dairy offerings, which have a short shelf life or those that require a high level of customization, a highly flexible staff is required to respond to customer requirements and demand volumes. Resource flexibility can involve a service, demand volume, or output rate in a firm’s operations. Operations managers can choose the level of staff flexibility appropriate for the organization. A flexible workforce is ideal for restaurants to remove capacity bottlenecks during high demand situations (Chen & Wallace 2011).

Furthermore, part-time waiters may be necessary during seasonal peaks in workloads, e.g., during dinnertime, to complement the full-time staff. Operations managers must make decisions related to the equipment flexibility depending on the level of service/product customization required. Highly customized products require general-purpose machines, while high-volume and less customized offerings need specialized and expensive equipment to produce (Heizer & Render 2006). Therefore, the restaurant manager must consider the cost vs. customization tradeoffs when investing in equipment.

Cost is the fifth performance objective of operations management. All four objectives aim to produce cost savings by reducing operational costs. The cost structure differs significantly between firms. Restaurants contain costs through effective inventory management to alleviate risks, local sourcing of ingredients, vertical integration, quality improvement, and outsourcing of functions such as hard-boiling of eggs to Atlantic Foods. The internal rewards of a cost-containment strategy include better efficiency and cost savings. The interrelations among the five performance objectives and their outcomes are summarised in figure 3 below.

 Operational Performance Objectives
Figure 3: Operational Performance Objectives


The successful design and implementation of a service process require a strong focus on a firm’s competitive priorities. In the restaurant services industry, the key considerations may include on-time delivery, resource flexibility, service customization, and quality. The factors that influence this process fall into the categories of service success contributors, NSD antecedents, and organizational factors. Further, operations management decisions related to service design are based on five performance objectives, i.e., speed, quality, flexibility, dependability, and cost.


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