A Project Report

on
Operations Management
of
Subway

Submitted To: Submitted By:

Dr. Sharad Chaturvedi Anshika Bhatnagar
Faculty of Operations Management Roll no. 20
Section A
Fortune Institute of International Business
Batch 2018-20
Table of Contents
Subway.......................................................................................................................................................... 4
Introduction ............................................................................................................................................... 4
Subway India ............................................................................................................................................ 4
Operations Management ............................................................................................................................... 5
Transformation Process ................................................................................................................................ 5
Transformation Process – Subway................................................................................................................ 6
Inputs ........................................................................................................................................................ 7
Process ...................................................................................................................................................... 8
Output ....................................................................................................................................................... 9
Random Disturbances ............................................................................................................................... 9
Feedback Mechanisms .............................................................................................................................. 9
References ................................................................................................................................................... 10
Subway
Introduction
Subway is a privately owned American fast food
chain. The main product of subway is submarine
sandwiches and salads. Subway was founded on
August 28, 1965 by founders Fred DeLuca and
Peter Buck. It is headquartered in Milford,
Connecticut, U.S. Today, Subway is one of the
fastest growing franchises in the world. Since
2007, Subway has consistently ranked in
Entrepreneur Magazine’s Top 500 Franchises
list. In 2015, it ranked #3 on the “Top Global Franchises” list and #1 as the “Fastest Growing
Franchise”. At the end of 2010, Subway became the largest fast food chain worldwide, with 33,749
restaurants, which is 1012 more than McDonald’s.

As per the records till June 2017, it had 45,000 outlets approximately located in more than 100
countries. More than half of its stores are in U.S. It is the largest restaurant operator in the world.

Subway India
Subway opened its first outlet in India in 2001
in Saket, New Delhi. By 2007 subway had 100
stores in India. In 2015 subway completed its
milestone by opening its 500th restaurant in
Mumbai. Currently, Subway is operating
restaurants in more than 70 Indian cities.
 Operations Management
“Operations management is the administration of business practices to create the highest level of
efficiency possible within an organization. It is concerned with converting materials and labor into
goods and services as efficiently as possible to maximize the profit of an organization. Operations
management teams attempt to balance costs with revenue to achieve the highest net operating
profit possible”. (Source: Investopedia)

Transformation Process
The process of transforming and adding value to the inputs in order to produce output for the
customers is called transformation process. Every organization be it product or service
organization, transforms certain inputs into outputs.

Quality of inputs Quality of outputs

monitored monitored

TRANSFORMATION
INPUTS OUTPUTS
PROCESS

Feedback Mechanisms
 Transformation Process – Subway

Random
Disturbances
-High turnover of staff
and sandwich artist.

Quality of -Unavailability/ shortage Quality of

of ingredients. output
input
monitored monitored
-Customer modifying the
order in between the
process.

INPUTS TRANSFORMATION OUTPUTS

Ingredients: -Sandwich
-Bread PROCESS -Customer Satisfaction
-Vegetables
-Chicken and meat
-Sauces
-Salt and Pepper
-Cheese
Transforming Resources:
-Customer Information
-Staff
-Microwave oven
-Toaster
-Sandwich artist
Feedback Mechanisms
-Customer Reviews
-Rising Revenue
-Rising sales volume
-Sandwich quality is maintained
Inputs
Inputs are the resources such as information, raw material, people, etc. that are put into a system
to obtain desired results.

In case of subway, the customers can customize their sandwich and choose inputs they want. The
inputs to prepare a submarine sandwich are:

1. Breads – In breads there are 6 varieties to choose from:

 Italian
 Hearty Italian
 Honey oat
 Oregano
 Multi grain
 Parmesan

The size of the bread can also be selected i.e. whether 6 inches or 12 inches (footlong).

2. Vegetables – Customers can choose from the following vegetables to be added in their
sandwich: Tomatoes, Lettuce, Cucumber, Peppers, Red onions, Olives, Pickles, Jalapenos.
3. Chicken and meat
4. Sauces – In sauces there are mustard, honey mustard, sweet onion, red chili, chipotle
southwest, light mayo, etc.
5. Cheese, salt and pepper also depends upon the will of the customers.
6. Customer Information is required by the sandwich artist to customize the order s per
customer’s wish.
7. The microwave oven and other equipment’s like toaster are placed right behind the counter
to initiate the process with baking the bread.
8. The quality of input is constantly monitored since food safety and food quality are top
priority of subway.
Process
Subway is known for its unique process where process of preparing the sandwich is wholly
customized as per customer’s needs. The customer chooses the inputs ingredients for the sandwich.
It has following steps:

FLOWCHART OF TRANSFORMATION PROCESS

-6 inches
Choose
-12 inches (Footlong)
Size

-Italian
-Hearty Italian
-Honey oat
Choose -Oregano
Bread -Multi grain
-Parmesan

-Add Chicken
-Extra Cheese
Add
-Add Meat
Extras

-Tomatoes -Lettuce -Cucumber -Peppers -Red Chilly -Onions -Olives

Choose -Pickles -Jalapenos
Veggies

-Mustard
-Honey mustard
Choose -Sweet onion
Sauces -Red chili
-Chipotle southwest
-Light mayo

Make it -Add cookie

a meal -Add drinks
Output
Output refers to the finished product. In case of subway there finished product i.e. output is
sandwich which is prepared exactly as demanded by the customers. The major reason behind
having such a unique process where consumers choose their own inputs is consumer satisfaction
which becomes another output for the company.

Random Disturbances
There are some random disturbances in the transformation process of subway like:

1. High turnover of staff and sandwich artist – High turnover can cause a major disturbance
in the process. Men & Machinery are important inputs used in transformation process,
without them the desired output cannot be achieved.
2. Unavailability/ shortage of ingredients – Shortage of ingredients is another disturbance in
the transformation process which can affect the output. In case of subway, it purchases
some of its key ingredients used as inputs from suppliers. In situation of any shortages the
transformation process of subway will suffer. Ultimately, the output will not be as desired.
3. Customer modifying the order in between the process sometimes can disturb the process.

Feedback Mechanisms
To check the execution of transformation process feedback mechanisms is important. The
performance indicators of transformation process of subway are:

1. Customer reviews – Good customer reviews are clear indicators of effective transformation
process.
2. Rising Revenue, rising sales volume and quality of sandwich indicates that the output of
transformation process i.e. sandwiches, and customer satisfaction is achieved in a desire
manner.
References
1. https://en.wikipedia.org/wiki/Subway_(restaurant)
2. https://www.linkedin.com/company/subway-india/?originalSubdomain=in