Measuring and benchmarking the performance of coffee stores for retail operations

Bridging the Operational Efficiency Differences between Franchisors and Franchisees: A Metafrontier Approach

A franchise business is a contractual relationship in which the franchisor and franchisee should cooperate to promote sustainable growth of their franchise entities. However, it is still unclear whether the relationship between franchisees and franchisors is a principal–agent or a business partner sharing a business goal. Thus, this study is a first attempt to investigate the relationship between franchisees and franchises using metafrontier and bootstrap DEA from the perspective of efficiency. We measured the efficiency of coffee franchises in Korea, which have grown rapidly in recent years despite the COVID-19 pandemic. Based on the bootstrap DEA results, there was a statistically significant difference in efficiency between franchisors and franchisees under the variable return-to-scale assumption. While the main cause of inefficiency in premium coffee chains is attributed to scale inefficiency, most franchisees have pure technological inefficiency. Thus, coffee franchisees can improve the operational efficiency by adjusting their business scale and reallocating service resources. This study demonstrates tailored operational plans to improve the operational efficiency of premium and mainstream coffee franchises and offers strategic initiatives to decrease the difference in efficiency between franchisors and franchisees.

Analysing the critical success factors and the risks associated with third-party logistics in the food supply chain: a case of coffee industry

Purpose

The purpose of this study is to analyse various risks associated with third-party logistics (3PL) in the coffee supply chain and to present a framework that computes the influence of these risks on the critical success factors of the coffee supply chain.

Design/methodology/approach

The risks have been identified through a comprehensive literature review and validation by industry experts. The paper utilises an interpretive structural modelling (ISM) methodology for developing a hierarchical relationship among the CSFs. Furthermore, fuzzy MICMAC analysis is carried out to categorise these CSFs based on their driving power and dependence value. The fuzzy technique for order preferences by the similarity of an ideal solution (fuzzy-TOPSIS) approach has been applied to prioritise the risks associated with 3PL based on their ability to influence the CSFs of the coffee SC. Furthermore, we performed a sensitivity analysis to analyse the stability of the results obtained in this study.

Findings

This study illustrates ten risks associated with 3PL and five CSFs in the coffee supply chain. The analysis revealed that coffee enterprises need to develop a balanced pricing strategy to ensure a sustainable competitive advantage, whereas the lack of direct customer communication is the most dominant 3PL risk affecting the CSFs.

Practical implications

This research provides coffee enterprises with a generalised framework with set parameters that can be used to attain a successful coffee supply chain in any developing nation.

Originality/value

The study contributes to the literature by being the first kind of study, which has used fuzzy ISM-MICMAC to analyse the CSFs of the coffee supply chain and fuzzy-TOPSIS for analysing the impact of various risks associated with the 3PL in the coffee supply chain. Thus, this work can be considered a benchmark for future research and advancement in the coffee business field.

Measuring the Meta Efficiency and Its Determinants on Efficiency in the Korean Coffee Shop Franchise

Previous applications of DEA (data envelopment analysis) models in the field of franchising have been scarce. In particular, measurement and analysis of the operational efficiency of coffee shop franchisors in the explosively growing coffee market in Korea is required. In this study, we categorize 29 Korean coffee shop franchisors into three groups according to their number of franchisees and employ the metafrontier analysis to measure the efficiency of coffee shop franchisors from 2015 to 2018. Based on the results of metafrontier DEA, this study identifies sources of inefficiency within individual coffee shop franchisors to provide insights for coffee franchise operators and investigates efficiency differences between small-chain and medium-chain coffee shop franchisors. Furthermore, the results of bootstrapped truncated regression provide that the external environmental factors affecting the efficiency of each individual group are totally different patterns depending on the franchise group. Based on the analysis results, this study suggests strategic initiatives tailored to individual coffee shop groups to enhance their operating efficiency and identifies the principal operational drivers of the environmental variables to achieve sustainable growth.

Benchmarking company performance from economic and environmental perspectives

Purpose

The purpose of this paper is to develop an approach to measuring the performance of motor vehicle manufacturers (MVMs) from economic and environmental (E&E) perspectives.

Design/methodology/approach

Eight measures are identified for benchmarking the performance from E&E perspectives. A new company performance index IMVM is constructed to quantitatively generate the historical data of MVMs’ company performance. Autoregressive integrated moving average (ARIMA) models are built to generate the forecast data of the IMVM. The minimum Akaike information criteria value is used to identify the model of the best fit. Forecast accuracy of the ARIMA models is tested by the mean absolute percentage error.

Findings

The construction of the index IMVM is benchmarked against three frameworks by six benchmark metrics. The IMVM satisfies all of its applicable metrics while the three frameworks are incapable to satisfy their applicable metrics. Out of 15, 4 MVMs are excluded for benchmarking future performance due to their non-stationary time series data. Based on the forecast IMVM data, GM is the best performer among the 15 samples in the FY2018.

Originality/value

This research highlights the environmental perspective during vehicles’ production. The development of this approach is based on publicly available data and transparent about the methods it used. The data out of the approach can benefit stakeholders with insights by benchmarking the historical performance of MVMs as well as their future performance.

Supply chain performance measures and metrics: a bibliometric study

Purpose

The purpose of this paper is to review the existing literature on supply chain performance measures and metrics (PMMs). It provides a critical evaluation of 234 articles published in past 24 years.

Design/methodology/approach

The paper examines the studies published from 1991 to 2014 by adopting the bibliometric technique of citation and co-citation analysis.

Findings

The analysis of the results indicate that the number of articles on supply chain PMMs is increasing at its fastest pace in the past few years. Furthermore, the study identifies some of the most influential articles on performance measurement and metrics. Finally, it concludes that there has been a transition from traditional to more sophisticated performance measurement system.

Research limitations/implications

This study focuses only on supply chain performance measurement and metrics and excludes research on performance management and control. Thus, researchers may explore and extend this area of research.

Originality/value

To the knowledge of the authors, this is the first study to review the literature on supply chain PMMs by using citation and co-citation analysis. The study includes 234 articles over the time of 24 years (1991-2014).

Measuring the performance efficiency of Turkish electrical machinery manufacturing SMEs with frontier method

Purpose

The purpose of this paper is to concentrate on measuring and evaluating the performance efficiency of electrical machinery manufacturing small- and medium-sized enterprises (SMEs) in Turkey. The industry-based efficiency evaluation provides management with information including the relatively best practice firms in the observation sets and locates the relatively inefficient firms by comparing with the frontiers.

Design/methodology/approach

In this study, an evaluation model, based on previous literature and recent industry SWOT analysis, is proposed to carry out efficiency analysis for electrical machinery manufacturing SMEs and output-oriented CCR data envelopment analysis methodology is used to find out frontier SMEs. The proposed efficiency measurement model is used for 93 SMEs from electrical machinery manufacturing sector.

Findings

Rely on the model results, efficiency score of the firms are compared and enhancements required for becoming an efficient unit are denoted. This study is based on previous research model that was carried out for ten different industries. The results indicated that 39 out of 93 companies efficiently performed in general perspective. The analysis also resulted that firms have significant resource excesses and shortages on outputs.

Originality/value

The distinguished way of this study is to evaluate Turkish electrical machinery manufacturing companies’ resources relying on performance efficiency model that compromises of strategic competitive priorities and also the model provides enhancement opportunities to SMEs for being more competitive in the sector. The characteristics features of the firms are offered with respect to demographic, financial and quality perspectives.

Strategic resource management model and data envelopment analysis for benchmarking of Indian retailers

Purpose

– The purpose of this paper is to use strategic resource management (SRM) model and data envelopment analysis (DEA) for benchmarking Indian retailers. The study ascertains, how a retailer can benchmark its performance at company level, global level, store level and finally at merchandise category level using diverse strategies for inventory, space and people.

Design/methodology/approach

– The paper aims to use SRM model, for evaluating and comparing the performance of two generalized retailers Shoppers Stop and Trent. These two generalized retailers are benchmarked with another best-in-class retailer, Wal-Mart using the SRM model. The benchmarking exercise brings out improvement directions for the Indian retailers. In the next part of the study, economic efficiencies of 11 generalized retailers are ascertained using DEA model. Finally, a study is conducted to understand, how SRM model can be used as a planning tool for deciding alternative inventory, space and people strategies at store level as well as at merchandise category level.

Findings

– Based on the data for the year 2011-2012, Trent’s performance is comparatively better than Shoppers Stop. The paper offers suggestion to improve its performance. Next, it was found that the performance of Wal-Mart is superior to the two Indian retailers. The study offers direction to the two retailers to devise appropriate strategies to improve their performance. The study further ascertains the relative efficiencies of 11 generalized retailers in the country. Finally, an illustration of how a retailer can use the SRM model as a tool for planning alternative strategy for inventory, space and people in a particular merchandise category is offered using data from a retail firm. The study has used “Jeans” and “Toys” as two categories to demonstrate this concept.

Practical implications

– The examples considered in this paper can be used by practicing retailers to plan and benchmark their performance.

Originality/value

– The study proposes a method, by which retailers can examine ways to plan and improve their operations and profitability by using the SRM and DEA model. The study is therefore relevant to practicing retailers as well as academicians.

Consistency of strategic and tactical benchmarking performance measures

Purpose

– The purpose of this paper is to examine the consistency of benchmarking performance measures and to investigate the impact of organizational size and managerial positions on the deployment of strategic and tactical benchmarking performance measures.

Design/methodology/approach

– A set of eight hypotheses was used to examine the consistency of the benchmarking performance measures and the impact of organizational size and managerial positions on selection of strategic and tactical benchmarking performance measures. A questionnaire-based survey data were used to test the hypotheses. The target population was manufacturing firms in Midwestern USA; the sample covers organizations in a variety of industries. Out of 91 completed surveys received, 84 surveys were usable resulting in a response rate of 17 percent.

Findings

– The paper found evidence of misalignment between organizational goals and objectives and proactive development of organizational core capabilities. The result also indicates that managers with high-level positions as well as managers from large organizations placed higher emphasis on strategic benchmarking performance measures.

Research limitations/implications

– Research is general and not industry specific.

Practical implications

– Effective performance measurement is a critical element of organizational success. It requires a thorough understanding of organizational strategy and deployment of the strategy into consistent sub-strategies.

Originality/value

– For effective benchmarking, managers must develop a complete understanding of their own business strategy and choose long-term and short-term benchmarking performance measures that are consistent with organizational strategy.

The links between just-in-time practices and alignment of benchmarking performance measures

Purpose

– The purpose of this paper is to examine if there are links between just-in-time (JIT) practices and consistency of benchmarking performance measures at various levels of organization.

Design/methodology/approach

– A set of ten hypotheses were used to examine the differences between traditional and JIT organizations in the effectiveness of benchmarking performance measures. A questionnaire-based survey data were used to test the hypotheses. The target population was manufacturing firms in Midwestern US; the sample covers organizations in a variety of industries. Out of 91 completed surveys received, 84 surveys were usable resulting in a response rate of 17 per cent. Out of 84 usable surveys, 33 organizations were grouped as JIT and 51 as traditional organizations.

Findings

– JIT organizations are better in recognizing external environmental factors, developing organizational core competencies, building learning organization through knowledge workforce, and using a broad and balanced mix of performance measures that are consistent with organizational strategy.

Research limitations/implications

– Research is general and not industry specific.

Practical implications

– Effective performance measurement is a critical element of organizational success. It requires a thorough understanding of organizational strategy and deployment of the strategy into consistent sub-strategies and action plans.

Originality/value

– The benefits of JIT principles go beyond inventory management. These principles can be applied to other areas such as effective performance measurement.

Benchmarking the performance of department stores within an income elasticity of demand perspective

Purpose

– The purposes of this study are twofold: first, the authors attempt to confirm the effect of the income elasticity of demand in the retail industry by investigating the performance of department stores; second, the authors measure and benchmark the performance of individual department stores in order to develop strategic insights.

Design/methodology/approach

– The authors employ data envelopment analysis for measuring and benchmarking the relative performance of department stores by using pertinent variables collected over a five-year period – 2006-2010.

Findings

– The results confirmed that the luxury department stores were more sensitive to an economic cycle, and all department stores in this study demonstrated higher performance in recent years, except for one discount department store that showed consistently deteriorating performance over the observation period.

Research limitations/implications

– The limitations of this study include the use of financial data from companies' annual reports, along with the limited number of decision-making units and variables.

Originality/value

– Major contributions of this study include the confirmation of the effect of the income elasticity of demand in the retail industry in general and suggested strategic implications for specific department stores, which are not found in the current literature at the time of this study.