Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

How to Cut Costs without Reducing Quality


Published on

Success methods you can put to use immediately for power and water use, better purchasing and product specifications, more accurate recipes, labour saving and waste control.

Published in: Education, Business, Travel
  • Be the first to comment

How to Cut Costs without Reducing Quality

  1. 1. How to Cut Costs without Reducing Quality
  2. 2. UNDERSTANDING FOOD COSTS IS NOT ALWAYS ABOUT “WHAT IT COSTS” BUT RATHER ABOUT “UNDERSTANDING YOUR BUSINESS” Servicing quality FOOD offers can always provide significant profitable outcomes to any business. More often than not, the servicing of food can become the CASH bleed losses of the entire business due to operational costs not being controlled from the kitchen production and the service of FOOD The CUSTOMER’S RETURN – when they are pleased with our offer and services they will often come back time and time again.
  3. 3. GOOD AT WHAT WE DO? 90% of the time we are pretty good at what we do in our businesses BUT 10% of the time we are all pretty AVERAGE. On occasion we may even be EXCELLENT at what we do, but this is NOT ENOUGH Understand the STRENGTHS and WEAKNESSES of your business and especially understand the profile of your membership across all food & beverage services areas of your business. SWOT Analysis of your business models Strengths – what we are GOOD at Weaknesses – what we are NOT GOOD at and need improvement Opportunities – what we CAN DO NEW Threats – what will happen if we DON’T DO ANYTHING THE STARTING POINT
  4. 4. AWALYS CONSIDER Clearly understand the PERCEPTION of your business Vs. the REALITY of your operations COMPLAINTS are opportunities to get it right so always listen to your customers and make informed decisions for the right reasons at the right time. NEVER drive RE-ACTIVE management outcomes instead of developing PRO-ACTIVE management principles by engaging your entire Team and your customers so as to focus on the best desired outcomes for your business model. MONITOR the performance of your business regularly and especially the business effectiveness when food PROMOTIONS are on offer. (Ensure correct accounting of special promotions reflected on the kitchen P&L’s.) Food can be a VALUE DRIVER or a LOSS LEADER but your business must always provide a real financial return for your Team’s efforts and your Team’s long term sustainability. i.e. JOB security and Business security FOOD COST PERFORMANCE REVIEW
  5. 5. FOOD COST BENCHMARKS Each and every food service area will have different retail price offers together with differing food menu offers. Minimize the number of retail prices which are closer to each other rather offering multiple prices with wider price ranges. Therefore it should be also determined that each and every food service area has a separate and differing FC% benchmark to achieve. However the overall MIX of sales within all food service areas should always provide a combined FC% that sits within industry BEST PRACTISE Industry best practise benchmarks is achieving FC% of 32% - 36% Wages benchmarks best practise is achieving WC% 42% - 45% Performance Benchmark Policy of individual operations is directed by Executive Management and is always achievable conditional upon good governance and effective controls and information reviews. NOTE: The PROCESS must run the business NOT the INDIVIDUAL All Team members must be part of the SOLUTIONS not part of the PROBLEMS Always consider all the ALTERNATIVES no matter how bizarre Always be prepared to openly listen ,even to “the person washing dishes” Always negotiate with suppliers to operate a Catering advantage by using commercially purchased FOOD PRODUCT drivers
  6. 6. FOOD COSTING ANALYSIS AND MENU DESIGN Most all food operations remain the most critical performance financial RISK side of any operational hospitality business. REASONS: Specifically providing a competent USER FRIENDLY cost control software system supported by a specifically focused Team of cost control analyst/s provide added advantage in immediately identifying cost blow outs and poor outlet performance to direct PRO-ACTIVE and COMPETENT Food Service Management. (highly recommend RESORT KITCHEN RESTAURANT as a minimum) Skills of Chef Managers are not suitably trained in basic business processes and report analysis review as they have focused training as professional trade persons and often do not hold business degrees Most purchased food commodity groups will have static price structures but some will have seasonal market influences directly impacting menu returns e.g. Fruit & Vegetables and Fresh Fish & Seafood All food production involves a degree of processing and control of trim wastage which is not found in beverage sales which can control a live inventory unit transfer and respective charge. FOOD inventory is not suitable to live inventory systems (apart from dry goods) but is better preferred as direct charged due to short shelf life term of fresh produce. FOCUS on minimising as much in house SCRATCH production activity within all kitchens financially assists better control on man-hour activity and finite cost of food products. Consider in-house COOK CHILL production methods. Always ensure that the ACTUAL meals served from the Kitchen truly reflects the THEORETICAL costed recipe which will relate specifically to the loaded POS charges posted to P&L’s REMEMBER rubbish information IN is rubbish data information OUT
  7. 7. FOOD PREPARATION PRODUCTIVITY & “SELECTIVE VALUE ADD” PRODUCT EVALUATION Developing menu design with theoretical correct margins and retail benchmarks is only part of the solutions in managing operational food offers to our customers The hard part is often the ACTUAL daily ongoing performance of the model to achieve the THEORY. In leading the service deliverables and promised outcomes, mandatory attention must be directed towards all manual activity involved in preparing and servicing the menu product, but also the amount of wastage trim loss of any one particular ingredient also investing man-hour input. NOTE: CRITICAL PATH PLANNING PROCESS - a determined focus needs to be start at the END i.e. PRESENTATION and CONTENT Minimise the items on the plate to no more that 4-5 actions or items Firmly consider what real bottom line return is afforded by continuing to invest man-hours in processing or production of any one ingredient Strictly consider all low cost per kilo base produce being outsourced and invest in-house man hours on value adding HIGH cost products which adds real value to maintaining these activities in house All COST ITEMS whether in-house produced or outsourced supplied need to be assessed to always provide the business return Regular updated industry advice on newly developed products will permit use of VALUE ADDED or PROCESS COMPLETE products The final objective must be to maintain all productivity actions efficiently controlled focused strictly on the QUALITY, APPEARANCE and FINISH of the products served. (“Art on The Plate”) Negotiating special priced “ONE OFF OFFERS” from suppliers when invited will also assist business returns
  8. 8. FOOD SERVICE COST PERFORMANCE REVIEW Service models can be either A ‘LA MINUTE (a ‘la Carte) cooked to order from a displayed menu choice OR BUFFET SELF SERVICE which can be bulk cooked and carved to order OR BANQUET SERVICE (Table d’hote , Buffet or Cocktail Finger Food) When evaluating theoretical costs for menus offering per plate e.g. a ’la carte or a pre-plated banquet meal, all items can be definitively costed by weighing or identifying all raw ingredients that compose up the dish. When evaluating theoretical costs for menus offering a Buffet all you can eat style service including Banquets, an average weighted allowance per each item per person should be applied Costing our BUFFET menus should be based on actual CONSUMPTION then supported by kitchen production cooking with what the allowance per serve should be rather than permitting to cook what CHEFS think you will need. This production process must be scientific in calculation rather than permitting individual guesswork. CONSUMPTION based allowances is based on what our customers on average actually consumed every time a person dines in a Buffet environment and reverses the focus in forecasting production. By determining HOW MANY persons you expect to have in per service, will in turn permit a simple calculation to now advise CHEFS what production VOLUME of food items they must only cook based on how many covers expected per any one service. This model is simply about the theoretically volume to be consumed which is defined upon that average weight a consumer will eats every time a service period is provided. To confirm the variables of “OVERS & UNDERS” in forecasting production over any one month, the number of forecasted covers per service is compared to the actual covers served (and revenue provided) and a total monthly report simply displays the accuracy for your FORECAST Vs ACTUAL. If controlled correctly you will find better control of forecasted production with better accuracy of the forecast of customers.
  9. 9. KITCHEN PRODUCTION BUFFET FORECAST CONSUMPTION ALLOWANCE PER PERSON – means weighing all raw items produced to served Vs. all leftovers not consumed Every Item will on average be identified as per grams per serve consumed Every production schedule now advises all CHEFS what amount to cook based on FORECAST of covers FORECAST Vs. ACTUAL tracking over any one accounting period (4 Weeks / Monthly) will provide a definitive OVERS or UNDERS for the period FORECAST ACCURACY – will be identified upon end of each period / month and can be altered accordingly FORECASTS - must be provide by FOH managers who will now focus on HOW many customers are expected KITCHEN PRODUCTION – must now be specifically guided by covers forecast which auto calculates how much of any one raw product is to be cooked
  10. 10. REVIEW SALES MIX DATA WITHIN ALL FOOD SERVICE AREAS Statistical sales data is captured via POS systems within most every modern business system today. HIGH CRITICAL RISK IMPORTANCE – “STARS Vs. DOGS” Identifying and controlling what best SELLS and what DOESN’T SELL. RULE OF SALES SUCCESS If it doesn’t sell why keep it If it doesn’t make a profitable margin why invest in the liability of costs to keep it
  11. 11. • PRODUCT SPECIFICATIONS • Often the best source for purchasing detail to your specific product requirements will be the suppliers already acting within a HACCP food safety program as part of their supply business model. • Reviewing the information contained within so as to enable and assist your TEAM in developing written product documentation best suited to your business. • • EVALUATING ROSTERED MANHOURS - LABOUR COST SAVINGS • Critical path analysis of rosters is a very good process for identifying unnecessary wasted hours always questioning WHY. • Clearly identify actual tasks of each person rostered to confirm best performance practise of TEAM objectives. • Productivity is enhanced best when working within objective, empowered, motivated TEAMS. • Start as ONE group finish as ONE group.