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Next Course Newsletter 
News you can use.
Special Edition
Trends and Technology
April, 2015
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The Main Ingredient
If you are not thinking forward you are
moving backwards is an appropriate cliché to set the theme for this
edition of the Next Course. After looking into my Crystal Ball and
checking in with visionaries from Academia, Finance and Technology one
thing has become clear the speed of change InTechnology and it's
application to the Food Service industry that is underway and some yet
to be determined is the driver of future success and sustainability to
match customer behavior.
According to Seth Godin, author, of The
Purple Cow among many other books talks about being risky is safe and
being safe is risky as you may know already it's your choice to become
irrelevant or sustainable. As an example, I have spoken with two
operators recently in New York City that have being successful for over
twenty five years. With rising prices of ingredients, rent, more
competition, changing demographics, it's becoming a challenge to change
the direction of the sales trajectory. On further probing into Staffing,
Customer Service, Purchasing, Sales Mix, Operating Standards and
Procedures with the operator, I was satisfied the operation pathway
for continued success was assured after all, they have being around for
over twenty five years. When we arrived to the most critical area of
Food Service success, Food and Beverage Cost Control it's where he
became defensive and responses to probing questions became unclear. As
it became more uncomfortable to continue the dialogue we stopped and I
made the point it does not matter how much more sales you achieve if you
do not know what your food cost is and the contribution margin for each
item you will get the same result. That was his "ah ha" moment that
resonate deep within. We continued a little more on the need for a
bookkeeper to keep track of vendor invoice, price changes and the whole
nine yards of Food Cost Control. We parted on my promise to dine a
couple times and report back as we do for most clients.
Here is an example of a traditional Operator
coming to grips with the reality of having to leapfrog from doing
things manually and intuitively , am guessing now, had a good
relationship with his vendors, so he never had to check on them for best
prices and accuracy of quantity and quality and view the invoice as the
bible. Glimpse thru and paid it on time as long as he too was able to
pay the rest of the bills and there was enough left over to make him
happy. Along the way he hired someone to keep track of employee hours
and rate of pay to cut checks at the end of the week, make deposit,
answer the phone and other errand because it was becoming bothersome.
As, what was left over start decreasing he start calling his friends and
family to come check us out , printed menus and distributed to the
neighborhood and businesses in the area and he became happy again. Then
he became confused, with more customers, what was left over were
increasing slightly, remaining the same and at times even decreasing.
Externally, the demographics of the neighborhood have changed, the
behavior of the consumer has changed, and competition increased, the
pathway to the consumer belly and their dollars changed. Along the way I
suppose, a salesperson persuaded him to purchase a Point of Sales
System because it looks good in the business, it collects aggregate of
sales by menu items and the sum of it's parts by hours in addition to
employees hours. Point of Sales systems are great in keeping up to the
minute information on what's happening in your restaurant, if, at the
end of the day, the aggregate is not chopped to a "fine dice" excuse the
pun and reconciled with your inventory whether by sight, forms or
software then you are "flying blind" and your Point of Sales System is
just cosmetic.
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The Chef Table
Additionally,
choosing a POS should be customized to the success of your restaurant
and not just a generic template for restaurant Operations develop for
large scale national brands is most important. It
may be better to have a simple POS that is tied in to a Back of the
House System (BOH) which has your recipes cost out and inventory updated
and is align with your supplier's prices and inventory. This is an ideal end to end use of technology from point of purchase to point of sale. However
there are still "sight" and forms to support the route the ingredients
travel once it arrives at your back door. This is the "moment of truth"
for leapfrogging to technology for your operations continued success.
With the POS ability to collect information and turn it into
data at the end of the day, the trend now is to become more analytical
as profit margins is squeezed thin due to increase cost of ingredients,
labor, and utilities. To offset these increases it becomes necessary
to find ways to operate more efficiently. Choosing a metric as key
performances indicators must be align with your long term mission and
daily actions so there is a cause and effect relationship. Because of
our daily action we are or not meeting our long term objectives.
Metrics can change over time to adjust to new situations. It can be
selected from four different perspectives Customer, Financial,
Operational, Growth and Development. Selecting a few KPI from each
perspective should give you a holistic view on your operation. Example
from the Customer perspective would be feedback from survey to find the
answer to How are we doing?, next, take your pick of the traditional
sales to date figures- or average check to find the answer to - Are we
there yet? - Financial target. Then, comes how long is your cycle
time from order taken to table, How long your customers are waiting for
their food and beverage?. The next question you have to answer is, what
new service/revenue we can create or how are we helping our employees
grow and develop. The list of metrics can be as long as you wanted it
to be. The key is you do not want to play jeopardy with your data,
collecting answers to find a question.
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On the Side.
Externally, everyone seems to be
"tuned in" to their device for work, shopping, places to go-museum, art
galleries now restaurants have to be in that crucial space of Social
media more than ever to compete for customer's attention, appetite and
dollars and create emotional and sensory experiences to want them to
spend time at your restaurant. Then, loop back their physical presence
to social media is the new word of mouth advertising in this era of
social media. And, if the sensory stimulation is not sufficient to
delight the palette or the ambiance transported them to another place,
the background music set the mood for relaxation and the employees have
no personality to share, there is no communal space, insufficient Wi Fi
connection, in the dining experience, then next time they will just sit
at their computer in the office and order online delivery or sit at home
with a book and do the same. After all, why else will they come to
your restaurant but to add a social element? To say it differently, you
have to make your restaurant the "cool" spot to be. Tech savvy, high
energy or laid back, Fun-pairing your food and beverage with other
activities that appeal to your customers, nothing that appear corporate
or stuffy like-"let me check with my manager" kind of thing. to solve a
service request. Creating a burst of emotions "the wow" factor is the
new loyalty building factor now and the future. Expanding the meaning
of hospitality and how Food and Beverage fits in to the mix with
customer behavior can only be accomplished with continuous feedback,
learning and promotional exploration to see what works
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Just Desserts
To encourage efficiency in the workplace the cliche "doing more with
less" is a mantra used in business. It has exercised my mind recently to
separate the more from the less and what we will do with the
difference. If it was a just a subtraction four minus two we know the
answer, but when we want the answer to be one hundred then there is an
inverse relationship between the two terms. The focus here is the use
technology to broaden the gap between more or less and quantify the
result in numbers.
The use of drones and cars without drivers to
replace delivery personnel, the use of digital food service equipment
that does multiple cooking techniques to replace all but the high end
culinary skill, use of digital menu to reduce printing cost, the use of
social media to reduce advertising cost and we already covered Point of
Sale and Point of Purchase therefore the future in restaurant operations
will be all about the customer experience as there is no algorithm to
meet their expectation but your employees. To quantify the less with
numbers a measure must be established. In the National Basketball
Association players are no longer measured by the amount of points they
score, assist, steals or blocked shots, but by how much time they spend
on the floor in an actual game to do so and in the case of points scored
how many shot were taken to get the points. The measure is called
Personal Efficiency Ratings (PER) They measured practice time with each
position coach and other soft measures that cannot be quantify as
example compatibility and locker room presence. Similarly in food
service practice time can be equated with set-up, service for an actual
game and locker room presence to breakdown to determine a Personal
Productivity Rating (PPR) for each employee. Like coaches in the NBA
they can use the information to know which player to use whether on
offense, defense or set plays, Managers in Food Service can now use the
information for scheduling based on meal period, type of service or
event. The saving achieved goes to the bottom line or re purpose to
customer service activities. And, just like the NBA where players are
cut, traded or waived so too, you can fire, transfer or put on the call
list your employees to work.
Of the many traits an entrepreneur
posses like taking risks, keeping an open mind, listening to people for
what they know and not how they dress, look or their age or seeking an
edge for comparative advantage, being risky is the safest bet
Please feel free to pass this email
along to friends and colleagues who could benefit from this information.
They'll appreciate it and so will I!
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The Next Course is the news letter
of HSS Consulting a Global Food Service Consulting Company that offers
proven solution in Operation Management and Design Operating Procedures
to fit Independent owned full service restaurant style of service, menu,
location and market segment. Peter is a Certified Food Executive
To your continued success.
Peter
HSS Inc
  
Office # 347-240-1939 |
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