Blog Posting #4

Terry, Lisa, Breaking Down the Fudge Factor, Hospitality Technology Magazine, October 2007

Breaking Down the Fudge Factor

Summary
This article by Lisa Terry deals with restaurants applying analytics to take the guess work out of food preparation. Restaurateurs have found recently that in back end restaurant management systems that include forecast-driven production and menu analysis systems there is time, energy, and money that can be saved. These reduced labor and inventory costs allow for reduced waste, fresher food, tighter delivery cycles, menu changes, promotions, greater manager accountability to ultimately improve the guests experience and enhance the workers performance. Chris Rodrigue, CEO of Taste Buds uses software from Compeat. It works on a four to seven point reductions and restaurant operators are able to use solutions that allow them to see, control and scrutinize their costs. Taste Buds specifically uses time and motion studies to determine the processes involved in preparing dishes and is then able to forecast what's made and when. Another secret they feel is calculating a daily par level rather than averaging across days. These tools can also make ordering more accurate by recommending orders based on forecasts, not just previous orders. It works well when new items are added to the menu. Additionally, these tools provide real-time visibility. Which helps chains and franchise systems greatly! You must train managers and franchisees to use these systems properly though. And the secret of effectively employing back end solutions is to use them in an environment where they can do the most good, and then stay committed to doing the work. This tool is an integral part for the future of restaurants.

Reflection
I found that this article was very well written and informational. As a future restaurateur I will definitely look into top of the line back end solutions systems because of their effectiveness in the hospitality industry. I was surprised at the effectiveness of Taste Buds food costs decreasing from 31 to 27.5 and labor costs from 12.5 to 11 percent because of back end solution systems. These systems are not only increasing productivity but additionally creating more time and energy for management to focus on marketing concepts to increase future revenue for companies. Arby's uses Restaurant Technology inc. to help in the ordering and food preparation as the franchisee enters recipes into RTI's menu analysis tools to be able to see their impact on food costs, paper costs, and revenues and gross profit. These tools are essential for any franchise company and will help the company greatly in the future.