Reducing Wastage of Food

Items at Fusion Cafe

Submitted to:
Prof. Arun Paul

Submitted by:
Krishna Kumari Sahoo (UM14029)
Rakshit Mangaroliya (UM14088)
Mayank Kaushal (UM14148)

ACKNOWLEDGEMENT
We would like to thank Prof. Arun Paul for his guidance and teaching,
throughout our work. We would also thank him for sharing his gamut of knowledge
pertaining to the subject, Total Quality Management & Six Sigma and giving us an
opportunity to draw from his experiences. His entire pedagogy certainly helped us
get a better perspective.

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Table of Contents
Choice of Situation

Problem Statement

Data Collection

Data Analysis

Suggested Solution

..11

Conclusion ..12

SITUATION ANALYZED
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Food wastage is a great issue in small eateries as well as in big restaurants. This happens due to
various reasons covering many possibilities. We identified Fusion Caf, located in the vicinity of
XIMB campus and tried to identify the possible reasons of this problem.

Details of the restaurant

Restaurant Name- Fusion cafe
Owners Name- Mr. Jahangir Saiyad
Address- NALCO Nagar, Chandrasekharpur, Bhubaneshwar, Odisha
Contact No- 094377 71912

Definition of Problem
Since the caf we did study on is not large enough(in terms of revenue) to invest in technology to
have superior performance in terms of cost cutting by minimizing the wastage, whatever they
produce is dependent on their gut feeling, historical experiences and seasonality(like weekends,
festivals) etc. We went to the place and talked to owner about this problem and he accepted
incurring losses due to wastage of raw materials as well as some finished food items.
The quantity they produce as well as the raw materials they order is based on following:
1.
2.
3.
4.
5.

The footfall they estimate

Lead time of delivery of materials
Perishability of certain items
Discounts offered based on quantity
Their storage capacity

Data Collection
We visited the local outlet of Fusion Caf, and collected sample data for the variable that
is forecasted demand for food item and actual demand for the same. From that we calculated the
amount and proportion of food wastage. Then we used this data to draw P-chart for amount of
waste. The data collected and final control chart is drawn below.

No
of
da
ys
1

Estimated/Forec
asted Demand
for Food Items
70

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Wasta
ge
6

Proporti
on
wastag
e
0.09

Pbar
0.07

Std
Dev
0.030

Standardi
zed Value
0.52

UCL
1

LCL
-1

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31

75
45
42
40
45
65
70
75
45
42
40
45
65
70
75
45
42
40
45
65
70
75
45
42
40
45
65
70
75
45

4
2
3
4
5
7
5
3
1
4
3
5
5
4
5
2
4
3
5
3
4
6
2
3
2
4
4
5
4
5

0.05
0.04
0.07
0.10
0.11
0.11
0.07
0.04
0.02
0.10
0.08
0.11
0.08
0.06
0.07
0.04
0.10
0.08
0.11
0.05
0.06
0.08
0.04
0.07
0.05
0.09
0.06
0.07
0.05
0.11

0.029
0.038
0.039
0.040
0.038
0.032
0.030
0.029
0.038
0.039
0.040
0.038
0.032
0.030
0.029
0.038
0.039
0.040
0.038
0.032
0.030
0.029
0.038
0.039
0.040
0.038
0.032
0.030
0.029
0.038

-0.56
-0.67
0.04
0.75
1.08
1.19
0.05
-1.02
-1.25
0.64
0.13
1.08
0.22
-0.42
-0.11
-0.67
0.64
0.13
1.08
-0.75
-0.42
0.34
-0.67
0.04
-0.49
0.50
-0.27
0.05
-0.56
1.08

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

Tools Used
We used Fish Bone Diagram to understand and identify the possible reasons of the
wastage that is happening and drilled down to the most important factors among them, which is,
as per the owner, the fault in forecasting the demand. We tried to identify the days on which they
need to be more careful about the demand estimation by drawing a P-chart for wastages and kept
the control limits at 1-sigma level, since the wastage, however small, has a very heavy impact on
the bottom line of the caf.
The data (based on the memory of the owner and trend of footfalls, like maximum on weekends,
a bit less on Fridays and least during weekdays) was collected for the last month, i.e. August
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-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1

2015. Even though the data was not precise, it helps us to roughly identify the possible reasons
and to reduce them, if possible.

Analysis of data
1)P-chart
1.50

1.00

0.50
Standardized Value
0.00

-0.50

-1.00

-1.50

2)FISHBONE Diagram

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UCL
LCL

We have tried to analyse the problem of food wastage in fusion caf with the help of fishbone
diagram. We identified four major problem due to which the wastage of food occurs.
1

Forecasting Accuracy:
This has been primary reason why the food wastage has been happening. When we
looked at why the forecast is not accurate we found two causes.
1 Demand is not smooth.
Since there is uneven demand even in normal days it has been found that it
has been very difficult to cope up.
2 No Sophisticated technology available.
Since the Caf does not have sophisticated technologies to estimate
number of customers it receives and expects to receive this has been the
issue.

Perishable Items:
Most of the items in food processing are perishable and not using them in time leads to
food wastage.
1 Freeze storage insufficient size
Problem in varying demand hence overbought perishable items become waste
due to storage problem
2 Inventory management problem
Improper inventory management causing food to perish

Overcooked

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Two major reasons why food items are overcooked are

1 Communication gap with the waiter
Sometimes wrong signs in conveyance or handwriting problem
2 Cook estimation error in dish inputs
Cook has overproduced raw inputs then the dish requirement
4

Customers Wasting Food

Two major reasons why Customers Wasting Food are
1 Taste not preferred
Taste perception is the reason why some customers waste food
2 Dish size underestimated
Wrong estimation of dish size many times customers waste food by over
ordering.

Suggested Solution:
From the control-chart analysis we can see that the control variable food wastage is out
of limit following a certain pattern i.e., on weekends. Hence we came to the conclusion that the
forecasting process of food demand is not efficient in the weekend. It is over-estimated and a
process modification is necessary. As a solution to this issue, we propose that Fusion Caf should
bring down their food procurement quantity from current limit by certain amount as suggested
by the control chart.
From the fishbone diagram or the cause-effect diagram, we identified the possible causes
for the problem of food wastage and sorted the ideas into useful categories. We suggested all the
possible solutions cited above to the management of fusion caf, and requested them to further
analyze to find one root cause or work on all possible process improvements one by one.

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