Trends and Technology April NewsLetter‏

Next Course Newsletter News you can use. Special Edition  Trends and Technology April, 2015 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.    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. 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 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! 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