Discounts for Better Profit! We Invite You to “Lean Your Whole Restaurant”; Reduce Chances for Financial Losses and Deficits
It’s well known that cost management is imperative in making a restaurant business profitable and grow, because restaurants have lots of details that cash can leak through. So, if management is good, the restaurant will have a high chance of being profitable.
One system adapted for restaurant cost management is the “lean” concept. Big restaurant brands have applied the lean concept produced good results, not only in cost management but also in the work effectiveness of employees and delivery of service that impresses customers. Let’s take a look at how leaning can produce these results and why restaurants should use the concept.
“Lean” to Boost Effectiveness, Reduce Loss and Increase Profit Opportunities
Lean” means “thin”. When compared to our figures, lean means making the proportions right. When the proportions are right, you are flexible, vigorous and energetic with great physical performance. As a result, your ability to engage in activities will be effective with better quality, health and cheerfulness.
Now, back to restaurants. In the different processes taking place inside a restaurant each day, many parts cause losses or waste. When we mention these words, people often focus on their ingredients. In reality, however, waste can occur in any restaurant activity, and waist is a primary reason for higher cost with loss of quality and effectiveness Therefore, applying the lean concept in restaurants is a way to eliminate or reduce wastes occurring in the restaurants’ activities, so they add value to the restaurants.
A frequently encountered example is the peeling of garlic and onions. Entrepreneurs might think buying unpeeled garlic and onions is cheaper than buying ready-peeled ones, or that 5-10 per kilogram is more affordable. When you calculate it, however, the restaurant has to lose at least one employee to sit and peel garlic and onions, and it might take up to two hours before the peeling is done. Let’s say the employee’s pay is 20 baht per hour. That’s a 40 baht loss.
If the restaurant switches over to buying pre-peeled products that are a bit higher in cost than 5-10 baht per kilogram, but do away with the need to have employees sit and peel them, employees will be able to do other things to increase the restaurant’s value. Which of these choices do you think is a better savings on costs?
“Lean”, the Killer of 7 Wastes in Restaurants
In applying the lean system in a restaurant, it is necessary to first understand and identify the 7 wastes, since the understanding will create a process for finding out how to apply lean.
1. Overproduction – This is waste resulting from excessive production, which makes it necessary to discard leftovers. For example, food serving sizes might be too big, or the vegetables used to decorate plates might be so much that they exceed what the customers want. Otherwise, the buffet line might output a lot of food right before the restaurant is closed, so food is leftover, which eventually becomes wasted money. As a result, it is necessary to apply lean guidelines to reduce waste such as by analyzing causes for daily leftovers to set waste reduction targets.
2. Transport – Waste from transportation is frequently encountered in SME restaurants. Sauces might run out, so restaurant employees have to run out to buy. Fish sauce might run out, so an employee has to go out and buy it. Each trip, whether to the market or a store, will create expenses. Even an employee moving f rom one station to another station can waste the restaurant’s time. If the entrepreneur can manage travel expenses to make them more efficient, cost can be reduced. For example, switch over from heading out to buy to using a delivery service or plan each purchase cycle to make each trip worthwhile.
- Movement – Loss from movement often occurs as a result of problems in the layout of the restaurant arising out of lack of consideration to waste of work time. For example, the freezer and refrigerator might be placed far away from the cutting board or the slicer machine, so employees have to waste time walking back and forth. Otherwise, the utensils station might be placed at the back of the restaurant so that employees have to spend more time clearing tables. If lean can be applied to manage this part, such as by arranging the kitchen layout so that employees have to move as little as possible out of their work stations or by arranging the utensils station somewhere in front of the restaurant, must of the waste in this area can be eliminated and employees will be less exhausted.
- Over-processing – Losses might occur due to having too many or too repetitive work processes such as by buying ingredients to cut and dress them yourself or wasting time boiling soup or coming up with your own sauce recipes. If you can lean this part by buying pre-processed ingredients or using processed sauces as a base for new sauces, wastes can be reduced without reducing productivity.
- Waiting – This means loss from customers having to wait. It happens frequently, and restaurants turn tables more slowly as a result. With fewer customers come fewer sales opportunities. Moreover, customers might be unhappy about it. If waste in this area can be managed by having customers pre-order or by using a queue system in which customers can reserve tables and make their orders can make it easier for restaurants to plan production. Payments can also be changed so that QR codes are used to reduce time in accepting money and giving change.
- Inventory – Waste from ingredient storage can happen frequently in restaurants that don’t manage stock effectively such as restaurants in which people stuff whatever they buy into the refrigerator and pull them out for use according to habit. When the time comes, they just buy more to add to the inventory without actually knowing what is in stock or what is about to expire or whether or not something has spoiled inside the refrigerator. This is a waste area that greatly impacts cost.
For the lean guideline in this area, it is necessary to create an inventory system for accepting ingredients and using them based on the FIFO-LIFO principles and to regular inspect the inventory, especially daily, in order to find out how much is left and how much has to be bought. Do this, and you will effectively prevent waste.
- Defects – This is a waste from production such as by taking orders incorrectly, serving foods to the wrong tables, the kitchen preparing the wrong menu items, and food tasting so weird so that customers don’t eat but ask for a refund instead. To reduce waste in this area, a work standard can be created and employees can be trained to enhance work effectiveness.
In conclusion, the lean concept is a process for managing, revising and minimizing wastes in every work activity in order to increase work effectiveness and deliver maximum value and satisfaction to customers while cutting restaurant cost in terms of both expenses and time spent in poor-quality work.
