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[Audio] OPERATIONS MANAGEMENT PROJECT : SUBWAY OPERATIONAL ISSUES AND RESOLUTIONS GROUP MEMBERS Glory Ntoiti 301389109 Amos Ibuoye 301320326 Egbule O.E Smart 30134869 Viana Pena 301350697.

[Audio] 1. Introduction The well-known American fast-food chain Subway specializes on selling salads and submarine sandwiches, or subs. Since its founding in 1965 by Fred DeLuca and Peter Buck, Subway has expanded to become one of the biggest and most well-known restaurant chains in the world, with thousands of locations in more than 100 nations. It is a globally recognized sandwich chain, one of the largest quick server restaurants but the company closed over 1,100 stores in the U.S in 2018 and is currently experimenting with changing its core menu to bring in more customers. 2. Introduction The story of Subway begins with Fred DeLuca, a 17-year-old high school graduate, who opened the first Subway restaurant in Bridgeport, Connecticut, with the help of a $1,000 loan from family friend Dr. Peter Buck. Originally named "Pete's Super Submarines," the restaurant was later renamed "Subway" to reflect its focus on submarine sandwiches. Despite facing initial challenges, such as financial difficulties and competition, Subway gradually expanded through franchising. By the end of the 1970s, Subway had opened over 100 locations across the World. Throughout the following decades, the company continued to innovate and expand its menu offerings, introducing new sandwich varieties, salads, and healthier options to cater to evolving consumer preferences..

[Audio] 3. The company's PLA As part of its transformation journey to improve across all aspects of the brand, Subway has spent the past two years optimizing its footprint, using a strategic, data-driven approach to ensure restaurants across the system are in the right location, image and format. Moving forward, Subway is focused on smart growth to boost franchisee profitability and protect the brand's position in the market. This includes efforts to strategically open new locations, with a goal of increasing new openings across North America by approximately 35 percent in 2024 versus 2022. In addition, the brand continues to invest in modernizing its image through relocations and remodels. This year, an additional 3,600 locations across North Americaare expected to be remodeled, taking the total number of restaurants in the current Subway image to more than 10,000 by this summer. As a result of its efforts, in April 2023, the brand achieved its highest weekly average unit volume since 2010. In 2024, Subway is leaning into the momentum it saw last year. Guests can expect exciting new menu items at a great value, as well as enhancements to their in-restaurant, online and in-app experience, with even more convenience for the on-the-go consumer. Smart growth and international expansion will also remain key priorities as the brand works to ensure restaurants are in the right location, image and format, and operated by the right franchisees. Efforts include strategically opening new restaurants, including non-traditional locations, modernizing the image of all Subway restaurants and partnering with franchisees — such as multi-unit owners and Master Franchisees — who have the operating expertise, resources and passion to grow with the Subway brand..

[Audio] 4. To provide a detailed analysis of the operational issues faced by Subway, one of the largest fast-food chains specializing in submarine sandwiches, it's important to delve into specific areas such as training, supply chain management, marketing, and franchisee relations. Each of these areas has its unique challenges that, when addressed, can significantly enhance the company's overall operational efficiency and customer satisfaction. 1. Training Issue: Inconsistent training standards across franchises can lead to varied customer experiences and operational inefficiencies. As a franchise model, Subway relies heavily on its franchisees to maintain the brand's standards. However, without stringent, uniform training programs, service quality can fluctuate significantly from one location to another. Solution: Implementing a comprehensive, centralized training program accessible to all franchisees can help ensure consistency. This program should include not only initial training but also ongoing education to keep franchise operators updated on best practices, new menu items, and operational improvements. Utilizing online training modules could make this more accessible and efficient. Explanation: Implement a centralized, comprehensive training program for all Subway franchisees to ensure consistent service quality and operational efficiency, utilizing online modules for easy access and ongoing education..

[Audio] 2. Supply Chain Management Issue: Managing a global supply chain poses significant challenges, particularly in ensuring the freshness of ingredients and managing costs. Subway's heavy reliance on fresh produce and meats means any disruption in the supply chain can quickly affect its operations. Solution: Strengthening relationships with local suppliers and diversifying the supplier base can mitigate risks associated with supply chain disruptions. Additionally, investing in supply chain technologies like blockchain for better traceability and inventory management systems can enhance efficiency and reduce waste. Explanation: To manage its global supply chain effectively, Subway should strengthen ties with local suppliers, diversify its supplier base to reduce disruption risks, and invest in technologies like blockchain and advanced inventory systems for improved traceability, efficiency, and waste reduction. 3. Marketing Issue: In recent years, Subway has faced criticism for its marketing strategies not resonating well with younger demographics or addressing health-conscious consumers' evolving tastes. Solution: Revamping marketing strategies to focus more on digital platforms can help Subway connect with younger audiences. Emphasizing the quality of ingredients, customization options, and introducing new, healthier menu options can attract health-conscious consumers. Collaborating with influencers and leveraging social media can also enhance brand visibility and engagement..

[Audio] Explanation: Subway should overhaul its marketing strategies to better engage younger and health-conscious consumers by focusing on digital platforms, emphasizing ingredient quality and customization, introducing healthier options, and using influencer collaborations and social media to boost visibility and engagement. 4. Franchisee Relations Issue: Tensions between the company and its franchisees have surfaced, with complaints about high operational costs, lack of corporate support, and stringent operational guidelines. Solution: Improving communication and support for franchisees is crucial. This includes offering more flexible terms, better marketing support, and assistance in managing operational costs. Establishing a franchisee advisory board can also help address concerns and foster a collaborative environment. Explanation: To alleviate tensions and improve relations with franchisees, Subway should enhance communication and support, offer more flexible terms and cost management assistance, provide better marketing support, and establish a franchisee advisory board for a more collaborative approach..

[Audio] 5. Solution Subway, a fast-food restaurant chain, has faced several organizational challenges over the years. However, the company has implemented several operational solutions to combat these challenges effectively. Here are some of the operational solutions Subway used to address their organizational challenges: Menu Innovation: To combat declining sales and changing consumer preferences, Subway introduced new menu items that featured healthier options and plant-based alternatives. By expanding their menu, Subway was able to attract a wider range of customers and regain market share. Technological Advancements: Subway implemented various technological advancements to improve their operational efficiency and customer experience. They introduced an online ordering system, mobile apps, and self-service kiosks, which allowed customers to place orders faster and more conveniently. Store Renovations and Redesigns: Subway recognized the need to update and renovate their stores to maintain a fresh and inviting atmosphere. They carried out store redesigns and renovations, focusing on modernizing their interior layout, improving customer flow, and enhancing the overall dining experience. Supply Chain Optimization: Subway worked on optimizing their supply chain to ensure the efficient delivery of ingredients to their stores. They implemented inventory management systems, streamlined their distribution processes, and collaborated with suppliers to improve the quality and consistency of their products..

[Audio] 5. Employee Training and Development: Subway invested in employee training and development programs to enhance the skills and knowledge of their staff. They provided comprehensive training on food preparation, customer service, and health and safety protocols, ensuring that employees deliver high-quality service to customers. These operational solutions have helped Subway address their organizational challenges and maintain their position as a leading fast-food restaurant chain. By focusing on menu innovation, technological advancements, store renovations, supply chain optimization, and employee training, Subway has been able to adapt to changing market dynamics, improve customer satisfaction, and maintain their competitive edge in the industry..

[Audio] References https://www.modernretail.co/retailers/why-subway-still-faces-challenges-despite-recent-sales- growth/ https://www.restaurantbusinessonline.com/financing/why-subway-facing-crisis https://graduateway.com/subway-operations-management/ https://www.cnn.com/2023/07/08/business/subway-overhaul-seeking-buyer/index.html https://panmore.com/subway-operations-management-10-decisions-productivity-case-study Restaurants, S. (2023) Subway® Accelerates North America Growth Strategy with five new multi-unit owner agreements, PR Newswire: press release distribution, targeting, monitoring and marketing. Available at: https://www.prnewswire.com/news-releases/subway-accelerates-north-america-growth-strategy-with-five-new-multi-unit-owner-agreements-301798376.html (Accessed: 29 March 2024)..