"Paweł, we need to hire more people immediately. There is so much work that we will probably have to introduce a night shift. With the rapid growth of the business, we need to think about moving - this 600m2 site is becoming too small for us," I was really worried. At the time we had 25 kitchen staff, 600 parcels a day and one catering brand.
I was happy that the number of customers was increasing, but I had the impression that costs were rising disproportionately faster. There were more of these things - at least once a day I heard the boss say to the production assistant: "go to the store, we've run out for production". How could this be, when we had exact recipes and shopping lists? In a moment it turned out that the day after we bought things for the social, 6 packs of coffee disappeared - that's how much even the most seasoned coffee drinker wouldn't drink.
One thing was for sure - money was leaking through our fingers. At least it was not a thin stream. I felt like I was fighting a hydra - for every problem, two more seemed to pop up. They seemed to pile up and the more I tried to find out where we were going wrong, the more problems appeared. I tried talking to the staff. I got a number of suggestions, such as that the theft and low efficiency were due to wages being too low, because "employees just have to compensate themselves". I tried talking to catering experts: "Look Paul, this is a specific industry. This is how it is. You can't control everything", "You've got to get good people", "You can't do anything about it, you've got to do everything yourself if you want it to be good".
I finally understood. The real problem was the lack of a map, a structure that would make me aware of which fires I needed to put out immediately because they threatened to collapse the entire structure, and which fires, while undesirable, would not kill me immediately and I could return to them in a moment.
It became my ambition to pass the McKinsey problem-solving test. In the materials I used to prepare, there was a lot of reference to the MECE method. The name comes from the English words Mutually Exclusive, Collectively Exhaustive. For example, a population can be divided into men and women - each person can belong to only one of the two, and at the same time there are no people who do not belong to one of the two. An example where this principle is not fulfilled is nationality - people can change their nationality, they can be citizens of many countries. In such a division, the sum of the sets will be greater than the number of people.
The purpose of this method is twofold:
Make sure we don't miss anything
To spend the minimum amount of time necessary to solve the problem by not having to go back or repeat - everything is sorted.
I began to group my problems into category trees, common themes. As I wrote down and organised the problems and my thoughts about them, things began to fall into a logical whole. I began to see connections and understand where the problem lay.
My views on the need for change were not met with approval. For example, my disagreement with a 50% pay rise was not met with approval. I felt trapped. I wanted the business to be healthy. Conflict with employees and the risk of production stoppages - the very thought of that paralysed me.
I wouldn't be surprised if you've encountered similar situations. Looking back, I think a lot of things are done provisionally, for "holy peace of mind", like a provident loan. It solves the problem in the short term, but then it turns out that the cost is gigantic. Then another loan, and the spiral of debt is so great that it's hard to get out. No one has ever shown me the problems I can face, and I suspect that you will not either. Ignorance and old habits are our common enemy. That's why I'm going to show you 14 places where I've missed out on money, to help you out.
I have created many different categories. So don't get too attached to mine. The key is to group the subject and have fairly consistent groups. Items on individual lists can come and go, but the list of topics is relatively constant.
Purchasing and Suppliers
Warehousing and Inventory
Production and Preparation
Management and Administration
Now I will show you the 4 stages of problem diagnosis:
"Triage - what are the most urgent problems? When paramedics arrive at the scene of an accident, they don't treat casualties on the spot. They make a quick assessment of the injuries and decide who needs help first. It's the same with running a business - I think about which category I need to focus on first because it threatens the running of the business.
My daughter says, "Trousers down, cards on the table" and I think it fits this point perfectly. Once I have identified a category, I try to uncover all its problems. I knew about problem A, but I wonder what is B, C, D. What if you cure gangrene when the flu kills you?
"We play in pairs. - There's a reason they say problems come in pairs, or even in herds. Once I've identified them in point 2, I group similar ones that have a single cause.
"You did not stand here". - At this stage I know which area needs attention first, I have identified all the potential sources of problems that I could, grouped the issues and understood the interrelationships. This is how I arrived at the final list of problems, which I arrange in order. It's important not to jump from issue to issue. Think of it as a street fight. Even if you are an experienced karateka, boxer or other fighter, and no average thug has a chance against you - the force of evil against one. What will you do in such a situation? You will shout: "One at a time! Then the problems will not overwhelm you and you will have the strength to deal with each of them.
Below are examples of problems you may encounter in each of the categories listed. The list is not exhaustive and there will be issues in your business that I have not included below.
Purchasing and Suppliers
1. Lack of regular price monitoring
In the foodservice industry, ingredient prices can change faster than the weather in the mountains. Lack of regular price monitoring is like driving a car without a seatbelt - sooner or later something will happen. By implementing a systematic review of supplier prices, you can react to changes in real time and avoid unnecessary costs. At Flambia Market we have learned that regular price analysis can save up to 10% per month.
2. Ignorance of the supplier market
Not knowing the supplier market is like going fishing without a rod. You need to know all the players in the market to get the best deals. By regularly comparing offers, you can get better terms and avoid overpaying. I remember one time we found a new vegetable supplier who offered better prices without compromising on quality. As a result, we were able to reduce costs and increase margins.
3. Don't compare supplier offers
Comparing suppliers' offers is an important part of your purchasing strategy. It is like the stock market - you need to know where and when to invest. More than once we have found that different suppliers offer the same products at different prices. By comparing quotes, we found a supplier who sold coffee 20% cheaper. This decision allowed us to save a significant amount of money without compromising on quality.
4. Buying branded products instead of cheaper substitutes
Buying branded products is simply paying for a logo. Instead, it makes sense to look for cheaper but equally good substitutes. In my practice, switching to non-branded products in some categories has allowed me to cut costs without compromising on quality.
Warehousing and Inventory
5. Poor inventory management
Poor inventory management is like trying to keep water in a strainer - nothing will come of it. Regular inventory control and the introduction of an inventory management system have helped us avoid wasting products. At Primate, we have implemented the Flambia System, which allows us to closely monitor inventory and order only what we really need.
6. Improper storage conditions
Improper storage conditions really can end in a major disaster. Preventing it avoids losses and waste. In my companies, we regularly control the temperature and storage conditions, which significantly extends the life of products.
7. Excessive or frequent orders
Orders that are too large and too frequent increase logistics costs. The key is to find the golden mean. Here again, the Flambia System came to our aid, which allows us to plan purchases precisely, avoiding excess and frequent deliveries.
Production and Preparation
8. Failure to follow established grammars
Using accurate recipes helps control costs and reduce waste. In our kitchens, every recipe is accurately measured, which helps to maintain consistency and control costs.
9. Poor organisation of work in the kitchen
Poor work organisation in the kitchen is like trying to lead an orchestra without a conductor - chaos is guaranteed. By introducing clearly defined procedures and division of labour, we have been able to increase efficiency and minimise waste. Regular training and systematic organisation are the keys to success.
10. Overly elaborate menus
Focusing on a narrower range allows us to better manage stock and avoid waste. At Primate, we have limited the menu to the most popular items to optimise purchasing and reduce costs.
11. Sub-optimal use of seasonal ingredients
Seasonal products are cheaper and often of better quality. In my businesses, we regularly adapt our menus to seasonal ingredients, which helps to reduce costs and offer customers fresh, local produce.
Management and Administration
12. Lack of price negotiation with suppliers
Negotiating prices with suppliers is essential - it's like bargaining in a bazaar. Applying the Pareto principle and negotiating the prices of the most important products will bring the greatest savings. In our case, negotiating meat prices saved us 15%!
13. Lack of effective reporting
Lack of effective reporting is like driving a car without a mileage meter - you don't know how fast you're going or how much fuel you have in the tank. Regular reporting and food cost control is key to keeping costs down. At Flambia System we use advanced analytical tools that allow us to monitor all relevant indicators on an ongoing basis.
14. Poor internal communication
Poor internal communication is, in effect, a deaf telephone - information is distorted and results are far from expected. Effective interdepartmental communication allows us to better manage resources and avoid mistakes. Regular meetings and clear communication procedures have helped us to significantly improve operational efficiency.
Over time, this method got into my blood and proved useful in many other areas, such as remembering things! By grouping topics into: family, training, production, marketing, legal - it's easier for me to remember everything. I don't have an endless list of things, just baskets that I check in my head.
I believe that together we can bring best practice to the foodservice industry and end the myths that dominate the industry. This article is an excerpt from a guide I wrote for the community of Culinary Entrepreneurs, a new generation of foodservice business owners who are using technology and best practices to deliver the best quality for their customers and professional fulfilment and financial security for themselves.
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