Cambridge Brewing Company Lindsey Childers Saipriya Sen Kohli Juliana Salgueiro Meredith Sciarrio.

Cambridge Brewing Company

Lindsey ChildersSaipriya Sen KohliJuliana SalgueiroMeredith Sciarrio

Agenda

Restaurant BackgroundOverview of Current ScenarioObjectives and

Recommendations◦Reduce TAT during peak hours

◦Define and track KPIs and best practices related to food cost

Background on RestaurantOpened in 1989 and located in Cambridge,

MAOpen for lunch weekdays, dinner nightly,

and brunch on Saturdays and Sundays◦ Peak shifts: Thursday-Saturday evenings

Capacity: 120 seats in restaurant with 80 seasonal patio seats open only May-August

Brewmaster, General Manager, and Executive Chef manage day-to-day operations

In 2010: $2,869,634 in sales and $498,857 in net income

Overview of Current ScenarioTAT is currently high during peak hoursDifficulty handling high volumeLong waits during peak hoursCurrently don’t track food-related KPIs

◦ No measure of how they are performing or impacting profits

◦ Food cost increasing at a higher rate than revenue growth

Objectives

1) Reduce TAT at peak time by 8 minutes through changes in staffing and work flow process

2) Define and track KPIs and best practices related to food costs

Objective 1: Reduce TAT During Peak Hours

CBC peak hours:

Peak time: Thursday, Friday and Saturday Night

Peak hours: 6-9pm (3 hours)Peak time revenue (total)= $17,411Peak hours revenue

80% x Total peak time revenue (80% is approximate amount) = $ 13,929

Peak hours revenue as percentage of weekly revenue = 26%

Actual scenario: TAT from the time a customer orders to the time the food arrives is:

Total time: 1,200 sec. – 20 minutes

Total time: 1,790 sec. – 30 minutes

Objective 1: Reduce TAT During Peak Hours

120 seconds

Non peak times:

120 seconds 720 seconds 180 seconds60 seconds

290 seconds

Peak times:

290 seconds 720 seconds 370 seconds120 seconds

Bottleneck with staff

Bottleneck with staff

Bottleneck in kitchen

Recommendation: Increase the capacity of the grill• Burgers represent 28% of food sales• Current capacity: 12 burgers at the same time • Current cycle time: 1 minute• Increase by half the size of grill will allow CBC to

produce double the amount of burgers

Gain: reduce start of cooking process by 30 seconds

Objective 1: Reduce TAT During Peak Hours

290 seconds 290 seconds 720 seconds 370 seconds120 seconds

260 seconds

Recommendation: Rearrange the kitchen layout

Objective 1: Reduce TAT During Peak Hours

290 seconds

260 seconds

Gain: reduce the time to start cooking from counter time by 15 seconds

290 seconds 720 seconds 370 seconds120 seconds

245 seconds

Recommendation: Include one more employee in the kitchen staff• The grill is used for burgers and also for 6 more dishes• Only one person is responsible for the grill production

and burger assembly, creates bottleneck and increases prep time

• By having one employee to control the grill and another employee to assemble, they could reduce the production time

Cost: $210/weekGain: Reduce the assembly process time by 90 seconds

Objective 1: Reduce TAT During Peak Hours

290 seconds

260 seconds

120 seconds290 seconds 720 seconds 370 seconds

245 seconds

30 seconds

• We defined an optimal ratio (total customers/total shifts) and found that the optimal number of customers per server would be 49. Then, we suggested a new schedule:

Recommendation: Reallocate the front of house staff• When we analyzed the ratio of server per customers, we

identified an discrepancy between non-peak and peak hours

Objective 1: Reduce TAT During Peak Hours

Staff

M T W Th F Sa SuDay 3 3 4 4 5 4 4Night 4 5 5 6 5 5 3

Customers per Server

M T W Th F Sa SuDay 34 34 35 33 29 30 34Night 28 44 52 57 73 89 28

Staffing Proposal

M T W Th F Sa Su

Day 2 2 3 3 3 2 4

Night 2 5 5 7 7 9 5

Recommendation: Reallocate the front of house staffGain: reduce time to enter the order in the system to the non-peak

time reduce time of taking the dish in the kitchen and serving to

the customers to the non-peak time

FROM: 1,790 seconds to 1,295 seconds => Reduction of 495 seconds

Objective 1: Reduce TAT During Peak Hours

120 seconds290 seconds

Peak times:

290 seconds 720 seconds 370 seconds

260 seconds 30 seconds

245 seconds

120 seconds

Proposal process:

245 seconds 720 seconds 180 seconds30 seconds

120 seconds 180 seconds

Total gain projection

Objective 1: Reduce TAT During Peak Hours

Suggestion Detail Decrease in TAT

Investment

Add Grill Capacity

Increase grill capacity (so that it can take up to 35 patties)

30 seconds

$10,000 (one time investment)

Additional BOH Staff

Hire or increase staffing during peak hours by one person in BOH

90 seconds

$ 840 (monthly)

Change kitchen layout

Reassign coffee and prep counters

15 seconds

None

Staffing FOH Redistribute current staffing

360 seconds

None

FROM: 1,790 seconds to 1,295 seconds => Reduction of 495 seconds

or 8 minutes

Total gain projection: Per peak hour

Objective 1: Reduce TAT During Peak Hours

Total customer

Thursday

91

Friday 97

Saturday

119

Additional customer

12

13

16

Average check

$18.21

$20.45

$18.18

Increase in

revenue

$220

$365

$289

Total gain projection: 1 month

Increase in

revenue

$9,285

Margin22%

$2,042

Total cost projection: 1 month

New grill

$10,000

Increase in staff

$840

Additional Gains• Higher customer satisfaction = lifetime value• Shorter lines to be seated during peak hours• Increase in server efficiency and attentiveness• Higher employee satisfaction

What is Food Cost?

2008

2009

2010

28% 29% 30% 31% 32%

30.00%

31.30%

31.50%

CBC Current Food Cost

Industry standard metric that tracks inventory carry costs and profitability

Industry standards for successful operations range from 28% to 35%

Objective 2: Define Food Cost KPIs and Best Practices

Total food and non-alcoholic beverage salesTotal food and non-alcoholic beverage cost

=

%

Current Food Cost Control Practices at CBC

Quarterly Inventory – performed by chef, not reviewed by owner, and not used as a food cost tracker

Menu Changes – 4 to 6 times a year, mostly for seasonality

Receiving – all vendors are required to take product to storage area where quality and accuracy checks are performed

Chef performs all food prep with the exception of weekends – prep cook is employed to deal with peak times

Objective 2: Define Food Cost KPIs and Best Practices

Suggested KPIs for Tracking Food Cost

Food Cost KPI for tracking

Metric Description

Inventory Variance – allows for tracking waste

Comparing theoretical stock to on hand inventory

Menu items sold – currently estimated

Menu Mix – allows for knowing which menu items are most impactful on profits

Tracking actual plates sold expressed in percentage or figure

Spec Audits – chef works stations with team

Variance Allows chef to see how items are used

Objective 2: Define Food Cost KPIs and Best Practices

Suggested Best Practices

Best Practice Gain

Ensure order accuracy and quality at receiving door before vendor puts away

Reduction in overall touch costs

Spec Audits done on each kitchen/beverage station and food prep on a random basis

Reduction in overall waste, food cost, and touch costs

Inventory on a more regular basis

More accurate ordering practices, reductions in food carry costs

Objective 2: Define Food Cost KPIs and Best Practices

Possible Schedule for Implementation

Responsibility of Head Chef:

Objective 2: Define Food Cost KPIs and Best Practices

M T W Th F Sa Su

Reconcile Variance

Random Spec Audit (once a month)

Midday meeting with Management Team

Inventory

Questions?

Thank you!