Waffle House is a restaurant chain in the United States that strives to deliver quality food, friendly service, and a welcoming presence to its customers. Waffle House’s restaurants (or units) are ideally organized into districts (three units), divisions (three districts), and areas (three divisions). The current process of assigning units to these structures is a non-scientific method, which results in excessive travel and an uneven distribution of workload for managers.
The motivation of this project is to reduce managers’ stress. Waffle House has identified operational factors that affect a manager’s job such as commute time, employee turnover rate, total demand, third shift volume, security-type incidents, and customer complaints. Waffle House believes these factors directly relate to how stressful a manager’s job is and how difficult a unit is to run.
To accomplish this goal of reducing stress, an optimization model with multiple variations will be implemented to find the optimum groupings of districts, divisions, and areas. This model will bring value to Waffle House by decreasing their annual fuel and operational costs, as well as providing a systematic way of organizing their restaurant assignments in the future. We will also create a quantifiable way to measure how difficult a restaurant is to run, called a Difficulty Index. These metrics will be included in one variation of the optimization model to more evenly distribute more challenging stores across managers.
Waffle House will receive the two solutions using the Manager Commute Model based on their current units. This provides Waffle House with the option to use the solution that works best with their current needs. Also, we plan to deliver a user-friendly Excel spreadsheet with front-end capabilities allowing for the addition and removal of specific units, changes in manager salary and fuel costs, and the inclusion of the difficulty threshold.
Since Waffle House did not originally have a way of quantifying the difficulty of their restaurants, we will also include a program for calculating the Difficulty Index in the Excel interface. This will allow for redistribution of salaries for managers based on the Difficulty Index of the units they manage.
Value and Impact
Our best model for redistributing difficult restaurants decreases district difficulty variation by almost 25%. Our most cost-effective solution saves Waffle House $2.6M annually in operating costs, as well as decreases daily manager travel by 8.6%.
The Difficulty Index alone is a valuable tool for Waffle House to better quantify the difficulty of a manager’s job. Prior to this project, some managers were advocating for higher compensation due to overseeing more challenging stores. Now, using our Operating and Crime Difficulty Indexes, Waffle House has a quantifiable way to justify differences in manager compensation.
This project also benefits the client in ways that cannot be quantified but play an important role in minimizing the managers’ stress. By decreasing the variation in district difficulty, challenging units are better distributed between districts, thus improving district managers’ workload balance. In addition, managers' quality of life will increase due to the reduction in commute time. Based on a 2014 study conducted in Australia, a longer driving time is associated with a higher likelihood of behaviors such as obesity and high psychological distress (Ding et al., 2014). Both of these positive benefits can lead to higher employee retention rates and significantly lower stress levels.