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Running Restaurants is Getting Harder – Part 1

If you are a restaurant manager responsible for one location or thousands of locations, then you need to keep reading.

Is running restaurants getting harder?

Profitability is being squeezed from every direction. From $15 hr minimum wages, increased competition, commodity prices, and technology to name a few.

When I came up in the industry in the 80’s and 90’s running restaurants was physically hard. You worked 80 hours a week, and you almost always worked on weekends and holidays. There were a lot of managers burning out.

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Now it seems like managing restaurants is still physically hard but it’s also mentally hard. You have to concern yourself with gas prices, be on the forefront of technology, and government affairs. You can’t just provide great food and service with a smile anymore and expect to cruise.

We have new $15 minimum wage laws being put into effect across the country, if it hasn’t hit your state yet, don’t worry it is coming. After $15 minimum wages, my bet will be more breaks and shorter shifts.

We have commodity prices being affected heavily by oil and corn prices making menu staples more expensive than they were just a few years ago. Because corn is no longer just corn it is an alternative fuel when oil prices go higher corn prices also rise making it more expensive to feed livestock, to transport food to market, etc.

We are still recovering from several years of drought that drove up feed prices and took their toll on cattle stocks; we should start to see more cattle supply in 2016 & 2017.

Commodity prices fluctuating means that you have to know your plate cost and adjust your menus more frequently or run the risk of running higher than budgeted food costs. Adjusting menus and reprinting carry their costs.

Technology has been a blessing and curse depending on where you sit. Technology is increasing competition in the restaurant industry in several ways.

It is cheaper to start restaurants today than it was in the past. It used to take years of work and lots of money to develop and implement restaurant management systems. Now POS and back office systems have come so far down in price that any restaurant can have a world-class inventory, register, checklist, and accounting system. At NRA this year there was a Free POS system as long as you used their credit card processing.

Before cloud based apps, if you wanted to have a system like OpsAnalitica you would have had to build it from scratch. Developing enterprise level software is incredibly cost prohibitive and in the past ensured that only the largest restaurant chains could afford to have advanced systems.

Our platform was originally conceived when I worked for a national sandwich franchisor with over 4,000 locations. The features in our platform were built to work in a system with a lot of locations and complexity. Now an individual restaurant owner can use the OpsAnalitica checklist and reporting platform for around $1 a day and have the same tools and advantages as their chain competitors.

Restaurant websites, a relatively new requirement in the industry, are getting easier to build and maintain. At NRA this year there was a vendor who had people building their websites on the floor of the show.

In our town, we have a local 4 location Italian chain. Their website and online ordering portal, in my opinion, are as good as Pizza Hut’s; I have used them both in the last couple of weeks. Before the internet, you would have to spend millions of dollars to compete with a Pizza Hut or Dominoes on an ordering system. Now you can get it for pennies on the dollar and as a template that you just plug your logo, menu, and photos into and play.

Technology has made it possible for single locations to reach outside of their normal trade area. Take GrubHub for example, a business that can handle a lot of sales volume can implement GrubHub and can have food delivery outsourced.

They can start impacting restaurants miles away that in the past would never have had to worry about their existence. You now have customers that are close to your location ordering from your competitor when in the past they would have been eating at your establishment.

To read part two click here

Check out this short video to learn more about OpsAnalitica

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FOH Readiness is Key

I’m sure you have experienced this a million times….
 
I’m going to share a story from my days bartending in a very busy mountain town.
 
Spring break was one of the busiest times of the year.  Two-hour waits for dinner and up to an hour wait for lunch. No real break between the shifts because we got the apres ski crowd after a busy day on the mountain. 
 
During March, there would be a lot of cash just burning a hole in our pockets, like most ski town residents we would need to unwind at the end of the night. It could sometimes turn into a 4 or 5-hour process and would inevitably make the next lunch shift pretty rough. 
 
It was always a bad idea when all of us would go out together because now instead of 1 or 2 of the staff operating at 75%, we would have 90% of the staff operating at 50%. 
 
Never failed, every time that happened we’d get an early lunch rush. Side work was half-assed, tables weren’t set, outside heaters weren’t on, umbrellas were down, snow on the front patio. You get the picture. If you are a restaurant manager (or have been one in the past) your blood is boiling now because you know that this shift is your worst nightmare.  
 
We’d ingest as much coffee as we could stand and GO TO WAR!
 
The service was horrible because you are trying to complete side work while serving guests. Drinks took forever because there weren’t enough glasses at the soft drink stations, not enough lemons cut, it was a disaster. It hurt our tips and certainly hurt lunch sales.  
 
Anyone who has ever managed a restaurant has worked a shift like this.  You walk in the door and your staff looks like the slept in their uniforms and don’t get me started about the smell, like a damp cellar.   
 
Instead of proactively managing your shift, you start your day putting out FIRES.  
 
Instead of walking your dining room and checking it for readiness you are herding CATS.  
 
It’s impossible to grow sales in this kind of environment, you are just doing everything you can to get through the shift without a customer screaming and firing the whole wait staff. 
 
In the spirit of this story, we’d like to share our FOH Readiness Checklist. Click here to download it for free!
 
Even if you have a FOH Checklist, you should take a minute and check out ours and compare it to what you are doing as you may find something useful. On the flip side if you notice that we are missing something we’d love to hear from you so that we can add it to ours. 

Operations Data Use Cases Finale

In yesterday’s post, Operations Data Use Cases. We discussed two Ops Data use cases and how Ops Data could be used to make better decisions, drive better operations, and run more profitable restaurants.  In Today’s blog post, we are going to discuss one more use case and draw some conclusions.

Line Pars

Do you check that your different kitchen stations are stocked and that there is enough thawed product to meet your pars every shift?  More importantly do you track that metric so you refer can back to it when looking at sales.  Have you ever considered how much longer it takes to cook a frozen burger patty than a thawed patty?  I’ve heard that it can take up 50% longer to cook a frozen patty vs. thawed patty.  That is the difference between 4 minutes and 6 minutes per patty.  If you were to cook a case of burgers one after the other, the frozen patties would take 80 minutes longer to cook than the thawed patties.

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Ensuring that your line is stocked every shift with thawed product is massively important.  A 50% increase in cook times on a key item like burgers can be the difference between getting a third turn at lunch and having a second turn just sort of fade out.

When you are looking at lunch sales for weeks or months at a time, and you can’t understand why on certain days your sales dip; what else do you look at today?  If you track operations data, you can merge your sales data with other data to try and uncover what may be the cause.

We had a client that determined that on Wednesday’s they always had a dip in sales, they served a ton of burgers at this bar, and they got their food deliveries on Tuesdays.  A lot of the time they coasted into Wednesday lunch with 1/2 their burger par for the shift still frozen which killed their ticket times and their 3rd turn.  It wasn’t until they merged their checklists with their sales and looked at them by days of the week that this reality showed up.

The amazing thing was how easy it was to fix.  They worked with their suppliers to increase the number of thawed burger cases they received and instructed their cooks to ensure that they had enough frozen patties thawing to cover Wednesday dinner and Thursday.  They got their sales on Wednesdays to match or exceed their Tuesday sales, and it didn’t cost them anything but a few minutes of looking at their Ops Data.

Conclusions

Using digital checklists to track your operations data can provide context for your sales numbers.  Remeber, Operations Drive Sales – Sales don’t drive Operations.  Plus well-written checklists guide your managers to look at the most important items of your operations every day.  Digital checklists aren’t going to solve the world’s problems but they are going to help you run better operations.  If you would like to learn more about our SMART Inspection philosophy and what kinds of questions you should be asking you should sign up for our weekly webinar here.

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Operations Data Use Cases

In yesterday’s post, What is Operations Data. We discussed the importance of Operations Data (Ops Data) and how it could be used to make better decisions, drive better operations, and run more profitable restaurants.  In Today’s blog post, we are going to discuss more Ops Data use cases.

Is your manager any good?

The GM of a restaurant has more to do with the restaurant’s success or failure than any other person you employ; the buck stops with the boss, and it is ultimately their responsibility to run profitable operations.  How do you know if your GM is doing a good job?  Do you base that on sales or cost percentages?  Do you base that on complaints and compliments?  Do you base that on how well the staff likes them?  If you are not at the location every day; then how do you know?

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I’m going to tell you a real story from my past. At one point in my career, I was a member of a team of managers that turned in our GM to corporate because he was cooking the books around labor cost.  He was going into the register and rolling back employees times to 40 hours per week on Monday mornings before he submitted the weekly numbers to corporate.  We found out about this because one of our best employees quit when he got his paycheck and all of the hours that he had worked weren’t on there. We found out the GM was doing this for all employees, a lot of employees knew this was happening to them, but they were not speaking up because they were being intimidated.  By stealing from the employees, he was able to keep his labor cost in-line and inflate profits and subsequently his bonuses.

To the outside world, he was running an incredibly profitable restaurant.  Corporate proved that he was stealing, after we tipped them off, by using POS metadata.  Metadata is the data of data.  An example of metadata in a POS might be the server’s name and the time they closed the ticket.  You have the order, but you also have the other data around the order that helps tell the story.  The POS system we used had advanced keystroke logging; it could record what buttons were pushed by what people.  So the forensic team at corporate was able to verify that what we told them was true, and they fired this person immediately.

That POS metadata is operations data; it was used to tell the story that the sales and cost data couldn’t tell.  Another example of metadata, in the OpsAnalitica system, we record metadata on every inspection, we know who logged in and when then answered each question and how long their inspection took to complete, we know if you pencil whipped or if you took time to answer the questions correctly.

Appearance of the Restaurant

Do you track how ready your restaurant is for each shift?  Do you think that a clean and tidy restaurant is better for guests than a dirty restaurant?  Of course, you do. How would you know if the cleanliness of your restaurant was affecting sales?  Think about the last five times you started your dinner shift and your restaurant wasn’t 100% ready for the shift.  Could you write down those dates on a piece of paper right now?  I would be impressed if you could.  Have you ever gone back and looked at the sales from those nights and compared them to averages sales on those days of the week and the year before?

If you tracked this question on a digital checklist daily and you merged that data with your sales data you could determine how much a dirty restaurant may be costing you per night.  It could be thousands of dollars, or it could be $15.  If you can’t look at sales with other operation factors to provide context, then you don’t know the why behind performance and profits.

One last point to make about tracking data using digital logs vs. digital checklists.  I think digital logs are great for communicating data between managers and between shifts, that is what they are designed to do.  From a query writing and reporting perspective, it is much easier to compare a question or a series of individual data points that are defined than it is to compare the free text that is written in a log.  If you want to use operations data to make better decisions, track specific data points in a checklist and don’t try to compare sales to log notes because it won’t be helpful.

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What is Operations Data?

Since we started OpsAnalitica we have been talking about Operations Data(Ops Data) and how powerful it is and it dawned on me last week that we haven’t taken the time to define Operations Data for our readers.  This is an oversight on our part but one that I hope to correct in this week’s blogs.

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Here are some examples of Ops Data:

  • Ticket Times
  • Temperatures
  • Taste of Soup of the Day
  • Cleanliness of Bathroom
  • Staff Readiness
  • Pre-shift meeting completed
  • Line Pars
  • Staffing % (were you staffed to your schedule or were you short staffed)
  • Food Cost
  • Labor Cost
  • Waste
  • Appearance of Restaurant
  • Sales
  • Day Dots being followed (FIFO)

This list is far from being complete; these items are just a small sampling of the items that good restaurant managers are checking.  Each one of those Ops Data items can affect your operations and ultimately your profitability.  Some of them are easier to track, sales because your cash register does that for you.  Some are harder to track, day dots being followed, because you physically have to go into your walk-in, coolers, and pantry to inspect what you expect.  All of those operations data items help tell the story of your restaurant.

It is in the story of your restaurant where you find out who is a good employee and a bad employee, you start to understand the patterns that you have intuitively known but have never been able to quantify because you couldn’t back them up with numbers. More importantly when you have data, you can disprove assumptions as data sheds light on what is happening.  You may have thought your issue was slow sales because of a holiday weekend, and the real answer might have been that the kitchen was short staffed, you had the sales but couldn’t execute on ticket times.  The operations data when it is consistently recorded in an application like OpsAnalitica can be one of the most powerful tools in your restaurant.

For the next couple of days, I’m going to document Ops Data use cases that will show you how tracking and analyzing data points can help you run better operations.

Day Dots:

We all know that we should be using Day Dots in our operations to ensure that we are following the FIFO inventory methodology, serving safe food, and reducing waste.  If you don’t check your walk-in every day and record that the day dots were in use and that FIFO was being followed; will you remember that you may have had a bad week because of some training issues at the end of the quarter?  Maybe maybe not.  When you are looking at those cost numbers you may attribute the higher waste to some other issue and spend a lot of time trying to solve a problem that has already been solved or wasn’t the cause of your waste issue.  If you had that operations data and you were able to compare it to your cost data easily you would be able to see that you had some new cooks who weren’t following FIFO and you had increased waste until you were able to train them.  After the training, they were fine but during that week before you were able to train them a lot of extra food went bad and was thrown away.

This is a simple example, but it illustrates how important it is to have the complete picture of what is going on in your restaurant each and every shift in a digital format that you can use to compare to other data to make good data-driven decisions.

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The Importance of Line Checks

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I recently stumbled upon a great blog post written by George Barton entitled: “Line Checks: Why So Important?”.  To view the original post on Nightclub.com click here.  Here are the points he makes that I felt were top notch.

  • All scheduled managers during all shifts should participate in conducting line checks.
  • This is an on-going process, an everyday event that should never be dismissed.
  • You should be conducting line checks before each meal period and sometimes during a meal period to ensure that food items are being held at the proper temperature.
  • You can never downplay the importance of your team placing critical value on this initiative. An impactful and top of mind food safety culture will go a long way.
  • FYI:  If you were using the OpsAnalitica Inspector you would be able to have handheld sensitivity guides in the questions help text and could consult standards right in the app as you were conducting the inspection.

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Here is George’s original blog post:

Let’s frame it up.  Food-borne illness, cross contamination and other serious infractions from your kitchens should keep us all up at night and be under constant review. Very obvious!

Your team no doubt has tactics on keeping up with and insuring every customer receives only the best prepared food products as you align with key initiatives, including but not limited to the following:

–      Adherence to Health Department requirements, which is to insure your team eliminates “ALL” Critical and Major Violations.

–      HACCP (Hazard Analysis Critical Control Points) a risk management prevention methodology to insure safe food processes are in place.

–      Adherence to your own brands documented approach insuring full compliance toward food safety.

Let’s examine howline checks in your restaurant supports each of these key initiatives. Initiatives that can pay huge dividends with your objective to serve food you feel confident has been rigorously prepared, stored and produced for your honored guests correctly – the first time, every time.

Who Does It:  We lined out the “why” and now, “who” should conduct line checks?  All scheduled managers during all shifts should participate in conducing line checks.  This is an on-going process, an everyday event that should never be dismissed.   Additional key personnel, store trainers and managers in training should also participate with guidance from leadership.

When to Conduct:  Operations teams with assistance from Training or Learning and Development departments can support and call out best times for these critical touch points.  From my experience with 30+ years in operations, I found the best times to conduct line checks to be:

1.   30-45 minutes prior to the opening shift for the day or as close to opening the doors as possible in order to have as few interruptions as possible.

2.   Mid-day or after the first few hours of operation to insure food integrity, temperatures and quality have not been compromised.

3.   30-45 minutes prior to PM shift or as close to when that shift beginnings as possible.  You will generally have new team members working that shift, therefore it’s critically important to insure the same level of weight is placed on this line check. You will also be teaching and holding new team members accountable for the best food practices you have in place.

4.   Mid PM shift, again to insure food integrity, temperatures and quality have not been compromised.  This is generally when food wells burn out, hot sauce deterioration and a lack of focus tends to take place.

5.   End of the Shift. Based upon how you break down your food stations, this is an excellent time to discard products that cannot make it to the next day.  Produce, cold sauces, soups, dairy and protein all can fall into this category.  Do what’s right, if it’s not ready for another day and does not follow your shelf life guide, TOSS IT.  When in doubt, TOSS IT.

Tools & Best Practice:  There is a plethora of materials, methods and tools to utilize which insures compliance of food safety standards are meet. How does your team stack-up?

•  Well maintained thermometers for temping hot and cold products.

•  Disposable latex gloves which eliminate all bare hands contact.

•  Disposable plastic spoons for soup and hot sauce tasting.

•  Keep all kitchen equipment well maintained and follow a PM (preventive maintenance) regimen.

•  Posted charts and guidelines that call out key points to follow and insure 100% food safety compliance.

•  Hand held sensitivity guides for quick reference are also popular and successful.

Mindshare and People:  You can never downplay the importance of your team placing critical value on this initiative. An impactful and top of mind food safety culture will go a long way.  Showtime line checks – where scheduled team members prepare foods prior to the commencement of the shift under supervision which acts as a training and development tool.  This food safety practice will be rewarding and meaningful for those team members invited to participate.  You should never under estimate their value to your business.

*****

For a Complimentary Assessment on your Operations, contact George Barton at georgebarton22@aol.com, call 321-662-0641or visit gBartonInnovations.com.

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How do you use your operations data?

So you are collecting operations data every day, probably every shift, but what are you doing with it? 
If you are like most operators you are filing it in a drawer in the GM’s office never to be seen again. But what a waste of time and data. Why go through the exercise if nobody ever looks at the data again? I can tell you that’s how your managers feel. 
 
Just take a step back and look at the data you are collecting in your line checks and pre-shift inspections. Close your eyes and think about it for a minute.
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What could you do with that data? How do you think it could affect business decisions is you were able to view this data in usable format over time? 
  • Could you potentially discover an optimal walk-in temperature to reduce spoilage?
  • Could you spot a common trend in your bottom 20% performing locations, or the top 20% for that matter?
  • Could you determine that a hung over Saturday lunch staff is affecting sales tremendously?

There’s power in data, just ask Google and Facebook. If you are making decisions while ignoring important data that is available to you, you’re basically guessing. Sure experience and intuitiveness play a role, but data tells the real story. 

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Yelp responds to critics

On May 22, 2015 we wrapped up a blog series on Yelp. Click here to read the wrap up post. As a Yelp user I recently conducted a search for a restaurant in West Palm Beach and I saw this new message, starting with “Your trust….”, from Yelp right below Recommended Reviews.

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I clicked on the link and read the page where Yelp gives their side of the story on reviews and yelp advertisers getting preferential treatment.  Yelp went so far as to provide examples of how users can prove to themselves that Yelp doesn’t alter reviews. I ran the test search that they provided, ironically the top two businesses that were returned had closed.

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With their test search none of the top results were current advertisers. I did a secondary search of motels that were pet friendly in Odessa Texas trying to see if the Quality Inn that was returned on my google search would show up, they did but they weren’t currently advertising. The top search result was an ad for the La Quinta, see screenshot.

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When you look at the search results you will notice that the ad spot doesn’t show the star rating or the number of reviews like the other results. It is also apparent that the it is an ad with the yellow and white ad flag in the upper left corner.

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When I clicked into the ad, I got the normal Yelp page and saw that this particular property had a 1.5 Star rating with plenty of bad reviews.
In our last blog on Yelp we called on Yelp to provide more transparency about reviews. This is a good first step. Here’s a link to the Yelp FAQ, http://www.yelp.com/advertiser_faq.

“Moneyball approach ” to managing multi-location restaurants

The question is: Which data? What things should our “Moneyball scouts ” be looking at?

That’s where SMART Pre-Shift Inspection Protocols come into play.

With the SMART Pre-Shift Inspection Protocol, you can leverage your workforce to collect data, which will let you draw correlations between operations, sales, and costs. That will help you determine your shortest path to optimized profits.

Old Pilots Don’t Crash. Old Restaurants Managers Do. Ever see an old pilot skip a pre-flight checklist? Nope. That ’s why so few planes crash. Ever see an old restaurant manager (over confident that he knows it all) crash a restaurant? Yup. Happens all the time. That’s why we have to bring the rigor of the pre-flight inspection to the management of restaurants.

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SMART Pre-Shift Inspection Protocol™ is a checklist system, not unlike the pre-flight checklists that pilots run through to ensure safe operations. Except that the restaurant data that’s captured is not viewed in isolation, nor just logged and stored and never looked at again. 

The SMART Pre-Shift Inspection Protocol is performed by your workers at any skill level, using a tablet or iPad to log in the restaurateur’s most valuable assets: “in-game data.” 

Since this approach is a protocol (a programmatic workflow, based on a pre-established critical path), the SMART Pre-Shift Inspection Protocol is not dependent on the skill levels of your workers. The intelligence is embedded in the protocol itself. Literally anyone can run the protocol. 

Learn how to write your own SMART Pre-Shift Inspections at our FREE Webinar on July 14th @ 3 PM CST. Click here to register today!

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Prices Are Starting To Rise

A couple of interesting stories came out today in the restaurant industry.

One, which is not such good news for Subway, being that Jarrod’s house got raided this morning in connection with an investigation into child pornography. That will certainly bring on some unexpected brand damage.

The other being that Starbucks is raising prices on coffee even though coffee prices, as a commodity, are going down. It’s not a huge increase. An article on nrn.com stated that some drinks will increase 5-20 cents. For example a large coffee will increase by 10 cents. But you add in the additional spread from the decrease in commodity cost then that can add significant profit.

The article sites that most consumers won’t notice the increase as most of their most popular drinks are not going to be affected by the price increase. Also food items will not incur an increase. The increases will vary by area of the country and the product.

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This is just the beginning of a trend that we’ll be seeing for the foreseeable future. With all the pressure from the Affordable Care Act and increases in minimum wage, restaurant operators are running out of options. You can only cut product and labor costs so much without affecting quality in a way that upsets your customers. Consumers will just have to live with the fact that going out to eat is going to cost more money.

We will also have to get used to less human interactions and more digital ordering either through an app or an onsite kiosk, and even a robot cooking their burger and fries. At the NRA Show this year we saw some neat things, including robots. Click here to check out a previous blog post on neat things from the NRA Show.

Restaurant operators will have to embrace more technology to help run more efficient operations and to cut down on labor intensive tasks. Also they will need to take a look at their operations and make sure they are running as efficiently as possible and are using data to drive decisions.

Learn how to write SMART Pre-shift Inspections at a free webinar next Tuesday at 3 PM CST. Click here to register. The webinar will focus on helping your managers run great shifts every day, creating a better customer experience and increased profits.

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