Operations data are the data points that are generated every meal period in a restaurant that directly affect sales and profitability. Let’s break it down:
- Marketing activities remind your customers that you still exist.
- People come in to eat at your restaurant.
- You serve them food (operations)
- They pay and leave either happy or sad, eager to share their experience with their friends or trash you on Yelp.
Remember we are restaurant operators and operations are our business. Operations data points are the measurement of our operations. Until this time in the restaurant industry it has been next to impossible to capture, organize, and analyze operations data for even a single restaurant location never mind a national chain.
There are two main reasons for this, the first is that we aren’t a completely automated business. We are predominantly a human business where people, not automated machines are the means of production. Number two the technology didn’t exist or it was too expensive to capture the data.
With the invention of tablets and smart phones we now have powerful handheld devices that can be used to capture operations data. A smartphone used every day to consistently capture operations data can feed a data analysis initiative that can drive down waste and increase profitability.
In the spirit of ops data and running better operations we are giving away our ebook, SMART Inspections, Drive Big Data. Click here to get it delivered to your inbox.
I will leave you with this thought. As technology becomes more prevalent in the industry, the companies that can identify, test, and implement new solutions more quickly will have a distinct competitive advantage in the marketplace.
How could paper checklists be bad? Paper checklists are bad because people pencil whip them or lie on them. We recently conducted a survey of over 100 restaurant owners and managers. 94% of respondents believed that their teams weren’t completing their checklists accurately.
Which raises the question; why would a sane person have their team complete checklists that they know are being lied on?
A sane person wouldn’t, because they know that it is a waste of time and money. It costs money to develop checklists. It costs money to print checklists. It costs money to complete checklists. It costs money to file and store checklists and when it is time to get rid of them it costs money to shred and recycle checklists.
Yet as an industry we do spend money to have people complete checklists on paper even though we know they are being pencil whipped. Why do we do that?
The limitations of paper checklists aside, the fact that we still have people pencil whipping checklists in our businesses is because even a 30% accurate checklist is better than no checklist.
Let’s stick with the thought that even a partially completed checklist is better than no checklist. A person who completes a line check 30% accurately is still checking 30% more items than a person who skips their line check. They have a better chance of catching an error in preparation or finding an unsafe item and correcting it before it get’s someone sick.
Imagine a world where restaurants employees completed all of their checklists accurately and when they didn’t you were at least able to catch that they didn’t and coach them about the importance of doing them correctly. How much better would your restaurant run?
If every shift your team checked everything that was important enough to make it on a checklist. They checked every temp, tasted items, checked sanitation and portion controls. The restaurant when opened was clean and ready for guests.
Do you think that running better operations would translate into more sales, safer restaurants, happier guests, and most importantly more profits?
Of course running better ops would accomplish all of that. If running better operations couldn’t do that then we wouldn’t spend a penny on training or any operational initiative, we would only spend money on marketing because the only way to get sales would be to con people to come to your restaurant one time.
By the way, this is what the restaurant managers and owners told us on our survey. 100% of them agreed that checklists could help them run better and safer operations. That is right 100%.
Because checklists when completed diligently and followed-up on work.
The problem with paper checklists is that you can’t tell when they were started, when they ended, who did them, and if they were pencil whipped. Basically paper cannot help you hold people accountable. Also, this is for multi-unit owners who cannot be in every location every day, you can’t magically see paper hanging on a wall in a restaurant from your office.
What our industry needs is a checklist solution that is as easy to complete as paper checklists but allows us to hold our managers accountable and get visibility into our daily operations.
This solution would need to do the following things to be effective:
- Needs to hold managers accountable by tracking time, location, response cadence, and actual geo location.
- Needs to be able to identify unsafe operating conditions and communicate that to management.
- Needs to as easy as paper to use, with minimal training time.
- Needs to be as flexible as paper being able to capture different types of information, not just True and False questions.
- Needs to be better than paper allow you to utilize mobile technology to take pictures and leave additional comments.
- Most importantly you need to be able to get at the data you are collecting and start using it to make better operations decisions.
A solution that could replace paper checklists and hold people accountable at the store level up through the corporate level of a system could drive better, safer, and more profitable restaurants.
A restaurant company that could deploy a solution like this and start holding their unit managers more accountable and harness this new feed of operations data could optimize their operations and beat their competition by running more efficiently and making better decisions.
Think about the data that corporate restaurant management has access to today. They have register, inventory/ordering, and customer service data and they use that data to make the best decisions that they can. If you used a checklist solution to capture pertinent operations data at the store level, which would drive better operations. You could also use the date with your other data feeds such as sales, inventory, and customer service to create a complete picture of how your restaurants were operating. Remember that operations affect sales, inventory, food costs, and customer service, its not he other away around.
It would be a major competitive advantage for any restaurant system that took advantage of operations data. Look at how companies like Walmart, FedEx, Nordstrom, and Google use data to streamline operations and generate increased profits. Restaurant chains could do the same thing if they had the data, which they have, but just need to get it into an accessible, usable format.
How do you do this in your chain? You should implement the OpsAnalitica Inspector platform in your system for daily operations checklists and corporate inspections. The OpsAnalitica Inspector will hold your managers and teams more accountable at the restaurant level and our custom reporting and data warehouse will provide you with the data that you need to optimize your business.
The future of the restaurant industry is possible today for those chains that are bold enough to take the first step forward. If you are interested in learning more please click here and set up a call with our team.
Do you remember the Ford Pinto Case from the 70’s? Ford Pintos had a flaw in their design, and if they were hit in a rear-end collision at a speed greater than 20 mph the fuel tank could rupture, and there could be a fire. Unfortunately, several people were killed in accidents because of this issue.
The reason this case is still talked about today is because Ford management knew about the problem and decided based on cost estimates that it was more expensive to fix the cars than to pay the families of people who were killed in accidents.
What does the Ford Pinto case have to do with running a restaurant today?
We recently conducted a survey of restaurant managers and owners. Here are some of the results:
- 100% of respondents agreed that using checklists would help them run more profitable and safer restaurants.
- 88% of respondents used paper checklists in their operations today.
- 94% of respondents believed that their teams were not completing checklists accurately.
I know that none of us want to be a Ford executive from the 70’s in our restaurants. How could you sleep at night knowing that you aren’t doing enough to keep people safe?
If you conduct checklists on paper, and you are like the 94% of respondents who believe your checklists aren’t getting done accurately you have two choices:
1. You should stop doing checklists altogether; why would you waste the money you are spending on labor having people do checklists inaccurately that you don’t use? FYI: we think this is a bad idea.
2. Or, you should start doing checklists correctly and holding your team accountable using the OpsAnalitica Inspector. Our clients see:
- A 1/2 to 1% decrease in food cost when they conduct daily line checks with follow-up.
- Area managers spending more time coaching restaurant mgrs and less time doing busy work.
- Safer restaurants across the board and have the documentation to prove it.
- Increased manager and employee engagement as restaurants start operating safer and more profitably.
You will never get the benefits of doing checklists: better, safer, and more profitable operations; if they aren’t being completed accurately. The problem with paper checklists is that you can’t hold people accountable.
With OpsAnalitica, we drive accountability by:
- Time/date stamping and geocoding each response.
- Calculating how long it took to be completed.
- Showing answer cadence.
- Tracking who completed the inspection and their answers.
- When checklists were started and submitted.
It is only through accountability and follow-up that you can truly get the ROI on your checklists.
I invite you to download our FREE ebook: Restaurant Profits: It’s about Nickels, Dimes, and Quarters by clicking here.
In this eBook we discuss how using checklists can help you improve restaurant profitability. Get you copy emailed to your inbox here.
I was recently talking to one of our clients about the OpsAnalitica Inspector, and he was telling me how it helps their company reduce Food Costs.
See if this sounds familiar, their managers have always been required to do pre-shift line checks. Even before they had implemented OpsAnalitica they did their line checks like most people do, on a clipboard with pen and paper.
With OpsAnalitica, each manager knows that their Area Manager can look at a report and see when and if they completed their line check each shift. Our client said that he first looks for restaurants that aren’t completing their line checks and then he looks for the inevitable increase in food cost that follows. No line check = increased comps. That is one of the ways he determines which restaurants he will be concentrating on.
When you don’t do line checks, you are letting your customer find your mistakes instead of catching them yourself.
In the spirit of this story, I have identified six different types of food comps and what you can do to stop or reduce them.
1. Crazy or dishonest customer
I mention this one first because I believe that the perception in the industry is that crazy customers are the number one reason for food comps but if you tracked your comps by reason my guess is that crazy customers would account for a small amount of total comps.
There are people who don’t read menu descriptions or don’t ask questions. They order food that they hated in the past but want to give another try or they can’t eat because of allergies. These customers don’t want to pay for it if they aren’t going to eat it.
Let’s take it one step further, there are crooks out there, they are a small percentage of people who eat at your restaurant, but they do exist. They order food with every intention of eating some of it and then lying about it to get the dish removed from their bill.
I went through some advanced customer service training when I worked for The Grove in Los Angeles; the training was based on the Ritz-Carlton method. The Groves owner’s standpoint was this, that yes there are people who are going to lie and think they pulled a fast one on you. Those liars are such a small percentage of your customers that it isn’t worth confronting them or allowing your staff to provide less service to them because they believe that the person is lying. The cost to your business or your reputation, if you are wrong, is so much higher than one comped dish. If you allow you or your team to make those judgment calls, and you get it wrong with a genuine person, they may never come back. You just have to suck it up as a cost of doing business.
As a manager, I always had a hard time with this because I didn’t like the feeling I had in my stomach when I could tell that one of these liars thought they were so cool and got away with something. It bothered me, but I grinned and beared it because our owner was right, and when I was able to fix a situation for a customer of ours that we genuinely made a mistake on, I was thankful for the power that I had to rectify the situation and deliver on our service promise.
Now with Yelp and Social media I think this is even more important today to treat every customer like gold because these reviews can live online forever.
You can’t do anything about this type of food comp other than training your servers well around the menu and paying attention to items that are getting returned more than others. If you identify certain items that are returned more often, get them off your menu or ensure that servers are fully explaining the items to guests as they order. Ex “Just so you know this isn’t your traditional calamari that is deep fried and breaded, this is a stewed calamari that is in a bowl of sauce.” Try to head the comp off a the pass with over communication.
2. Server Screw-up
Servers make mistakes. There are any number of reasons for these mistakes: didn’t hear the customer correctly, didn’t ask clarifying questions, didn’t understand the menu item or how the dish is prepared, was overwhelmed at the moment, was hung over or tired.
I was pretty consistently hungover or overly tired in my twenties. When I came into work hungover, I made mistakes, and the restaurant comped some food.
Server orders the food incorrectly and the guest returns it. You solve this by tracking comps by server. You coach and train servers that have more comps and if you can’t fix them then they may not be the right fit for your restaurant. You do pre-shift meetings and evaluate your team before the shift and make adjustments when you have to. Send servers home that are hung over or look like they slept in their uniforms, make an example of people and hold everyone to the level of professionalism that you expect. Spend more time training servers before they hit the floor in their sections, it’s more than just menu knowledge its table management.
3. Kitchen makes order incorrectly
This type of comp is very similar to number 2 Server Screw-up, it’s just on the other side of the house. The kitchen makes an order incorrectly, and the guest returns the item. Kitchen mistakes happen more often when there are modifications to the dish, and they don’t make it correctly. The solution is the same, train your staff to ask more questions. A cook should never complete a dish unless they fully understand what they are doing. Servers should be trained when there are a lot of modifications to an order to go back to the kitchen and explain the mods to the cooks or check with the cooks if they are doable before ordering. If you have cooks that don’t know how to make the menu items, then you have to train and coach them and if they don’t improve this probably isn’t the right restaurant for them.
4. Kitchen makes recipe mistake
This type of comp is different from making an order wrong this is where they made an ingredient, a sauce for example, incorrectly and it tastes horrible. Kitchen prepares food with horrible tasting ingredient and guest send food back.
Kitchen recipe mistakes are one of the easiest issues to catch if you do line checks. A manager should taste every sauce, every soup, all side dishes each meal to ensure that they taste the way they are supposed to. Then you can catch your mistakes before your customer catches them for you. Recipe mistakes are 100% avoidable when doing line checks. In our experience, a restaurant that makes more of their food from scratch on a daily basis will see a greater reduction in food cost from performing line checks.
5. Kitchen takes too long to make food
Food taking too long to get to the table is a double a whammy because it is probably affecting more than one table and can generate a lot of comps when nothing was wrong with the food. There are several reasons this can happen:
- The kitchen is just slammed because everyone sat at once.
- The kitchen is slammed because they weren’t stocked to par and not all of their food is thawed and ready – slowing down cook times. This once again should be caught and addressed during the line check.
- The kitchen or the service staff are making mistakes and there a lot of refires that are jumping in line and overwhelming the kitchen staff.
If this is a consistent issue, then you have to take the proper management actions and get the right people on your team.
6. Food runners make mistakes
Food runners sometimes drop off food at the wrong table. I think the rule is that if they leave the food on the table and walk away or the guest touches the food then they can’t give it to the correct guest, and now we have a comp. This is a training and communication issue. They should be trained not to leave a table where there is any question that the food isn’t correct. If they keep the dish on their tray or off the table, they can figure out what is happening and avoid the comp.
After looking at these different types of food comps, you can boil them down to a couple of core issues.
- Managers that have not confirmed they are ready for service – line checks and pre-shifts.
- Bad communication – training and hiring decisions.
1. Using line checks and pre-shifts to confirm that you are safe and ready for service are a no-brainer is the low-hanging fruit in these scenarios because you are 100% in complete control of doing this. Whether you are the manager of 1 location or 100’s of locations you can benefit from implementing a pre-shift/line check protocol in your restaurants. The key to making your line check protocol a success is following-up with your managers on a daily basis to make sure they are doing these pre-shifts correctly. If you implement pre-shifts with follow-up you could see your comps and food waste go down; we’ve seen as much as 1/2 to 2% with some of our clients.
2. Bad communication stems from hiring and training issues and are much harder to address because each person is different and each shift that they work is unique. When you are training your team, make sure they understand the why behind what you are asking them to do. Make sure you train them on using clarifying questions and always to get more information before ringing up an item or making an item.
3. Show the team what comps cost the restaurant. I think that it’s beneficial to do training around food cost and how it affects the business. I’ve seen this attitude where employees compare what they would buy a steak for in the grocery store and how much the restaurant sells it for. They believe that the restaurant is swimming in profits, anyone who has ever managed a restaurant knows the truth.
Hold a training session where you show your BOH and FOH teams the cost of each part of a menu item. Factor in labor and everything else that goes into serving this plate to a guest, go crazy here and really dig deep into your costs. A good way to do that is to divide the average meals served in a month into all of your fixed costs (insurance, rent, loans, etc.) and do the same with your non-food variable costs (profit % of rent, power, etc.). Calculate the true all inclusive plate cost and watch your teams reactions when they understand that there is really only a small percentage of profit on every dish. Explain to them that when we make a mistake or have to comp a dish how that adds up. By explaining the numbers to your team and how comps affect those numbers, you will hopefully see some change in behavior.
If you don’t do this already, I recommend that you track the causes of your food comps in your register system or on paper. It could be as simple as:
- Server Error
- Kitchen Error
- Food Runner Error
- Customer Didn’t Like.
Review those numbers after a period and look for patterns. This exercise should tell you where you can focus some attention to your business.
Comps are a fact of life because we are in a people business. I’m a big believer in Control what you can Control and manage to the rest. So many of the comps that we highlighted were because of a lack of communication between the customer and the server, the server and the kitchen team, the kitchen team and the server, or the kitchen team and the food runners. Those people comps we have to manage to as best we can and make the hard decisions when we have to.
Doing line checks and pre-shifts is part of the control what you can control philosophy. Restaurant managers should be doing line checks every shift and following up with their teams to ensure they are getting done accurately. If you do this, you will be able to reduce comps and food waste.
If you would like to learn more about how OpsAnalitica can help you with line check compliance and reducing your food comps, click here to watch our OpsAnalitica demo video.