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Business Cases

Business Brief - Maximizing Food Service Operations


Organization Description

The client was a chain food service business focusing on Italian and Pizza, both in-house and delivery. The corporate owner had recently taken over the franchise and was working to improve customer service, delivery and profits.

Business Challenge

The business itself was fairly successful from an income point of view, but profits were very low due to high labor, frequent re-do’s and missed orders. According to corporate expectations, stores were expected to consistently reach 85-90 percent efficiency, and this store averaged 25-35 percent. The client wanted to find a solution that increased profit margin, while also decreasing service delivery times.

Proposed Solution

To meet the needs and the cost requirements of this client, L5 Consulting suggested a series of interventions, each one focusing on different areas of the business. As different interventions were implemented, management team members were all trained on how to perform and maintain the activities at the expected levels. The primary areas were:

  • Logistics and inventory management improvement – L5 reviewed product ordering for the previous year and compared that to expected ordering levels. Once ordering levels were compared, L5 implemented a computer process for tagging long-term products that included date of delivery and product expiration. Using the same tagging system, perishable products were stored in smaller dated containers and rotated for maximum usage. Product ordering and inventory levels were measured daily according to usage and ordered to pre-determined levels through the week. Expected levels were physically marked on shelving as guidelines and expected quantity counts were indicated as a verification method.
  • Labor Reduction – Changes were implemented that reduced staff in the business without laying off members (most were transferred to other stores who needed the experience). Customer cashiers were reduced by one person from three, and the extra person was re-deployed to expedite special orders and alcohol on an as-needed basis. Food makers were decreased from five people to three people on weekends; weeknights, they were reduced from four to two, with one person deployed for expediting food to the ovens. Dishwashing staff was reduced from four to two. Corporate practices allowed for up to 10 hours of “indirect” (non-service and non-prep work) in labor per day; since only 2-3 hours were being used, L5 suggested that employees could log on “indirect” and perform deep cleaning of the restaurant without impacting labor. When the next rush would occur, employees would then log on “direct” and continue servicing customers. This would allow for multiple rushes without negatively impacting “efficiency.”
  • Business process improvements – These provided many of the transformational service delivery aspects of the project. On-duty manager was converted to a non-working individual to expedite issues (make change, count down cash drawers during shifts, address customer complaints, etc.), and to monitor labor practices by the staff members. Bus staff (primarily the dishwashing staff) were provided with guidelines and times to clean tables. They were frequently evaluated on adherence to the time frames. Customer wait times for a clean table were reduced to 0-15 seconds.

Results

Service times
In-house service times improved to 25-30 minutes. Delivery times were reduced to 30-45 minutes during the week and 45-60 minutes on weekends.

Labor
Labor costs were reduced to 25-30 percent during the week and 20-25 percent on weekends.

Inventory
Non-perishable inventory levels stabilized, with spoilage being limited to less than two percent. Perishable inventory was reduced to less than five percent.

Efficiency
All transformations were implemented in 4 weeks, and regular efficiency ratings rose to over 100 percent. At the end of the eight week process, efficiency increased even further to 125-135 percent, with spikes to 145 percent on weekends.



 

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