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XYZ Rest. has a fully equipped kitchen and do not have much budgetary
constraints when it comes to hiring new staff. Despite all the above
advantages and strengths, XYZ Rest. is still not making as much profit as
other similar operations in Male.
The streets of Male are dotted with all sorts of eateries, from the traditional
teashops to lavazza-serving cafes. The market is already crowded with
convenient choices for the customers. There is tough competition among
caterers.
1. Low profitability
2. General lack of professionalism from employees
3. Customer complaints
The primary purpose of any commercial food and beverage operation similar
to WP and DG is profitability. Just like any other operation, the primary
performance objectives for WP should be the provision of food and beverage
services at the lowest possible cost and the first step towards this is the
establishment of cost control procedures and mechanisms.
In order to understand the cost control mechanisms in place, I sat down with
Mr.Gopal and discussed the current system. I have gone through the monthly
accounts statement provided by him and would recommend the following
changes:
1. Increase the frequency of reporting. The directors should get a weekly
report in addition to a consolidated monthly statement. When we
increase the frequency of reporting, cases of fraud and loss will be
minimized as the management will get the opportunity to react to
anything that needs intervention.
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2. The weekly report should be designed in a fashion that addresses the
following flaws in the current reporting:
3. Direct food and beverage cost should be separated from operational
costs
4. Food and beverages should be separated.
5. Separate analysis for coffee, soft drinks and fruit juices should be
provided. Since it is observed that the staff and management of the
restaurant are not able to understand and maintain the food cost at a
consistent level, it is important that these costs be separately visible.
Coffee and soft drinks do not go through any transformational process
and the yield for these products can be easily determined. For
example, if a bottle of coke costs us one rufiyaa to buy and if we sell it
at ten rufiyaas, the cost percentage is ten and this will be constant as
long as the buying and selling rates don't change.
6. Introduce a triplicate checking system for BOTs and KOTs. This may
require additional investment and retraining of staff but the cost of this
is negligible compared to the effectiveness this would bring to the
control mechanism.
7. Introduction of a par stock level for a la carte items where purchase
requests for the following day will be equal to today's sales.
8. Introduction of stock maintenance and control procedure along with
software that calculates standard yields. E.g. If a kilo of rice produces
four fried rice dishes and if a kilo of rice is take out of the stock that
day, the kitchen should have produced and sold four fried rice dishes
and this should be reflected in the daily sales.
9. Re-engineer or redesign the menu based on the sales records of the
past. Items that do not sell or are slow moving should be taken out of
the menu and standard portion sizes should be established for all
items on the menu.
10.Review the existing point of sale system to establish its efficiency and
capacity to minimize fraud and cheating.
11. Immediate discontinuation of the practice of drawing
money out of the cash collection at the casher's desk for any
reason. If this practice is continued, it leaves a loophole and
encourages abuse by managers and supervisors.
12.Establish stricter guidelines for complimentary consumption.
13.Re-evaluate the costing of all party menus and revise prices of these
menus if necessary.
14.Streamlining the operation and establishing the operation with the
above control and reporting procedures will make measuring the
productivity and profitability easier while closing gaps for potential
fraudulence and cheating.
Professionalism of employees
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different. To do this they need special people to deliver a different standard
of service: service that will require all the customer care buzzwords to
describe. Friendly, efficient, smiling, helpful waiters don't come easy, don't
come cheap and neither do they come in quickly. We, Maldivians have
become accustomed to being served by people from the neighboring
countries. Maldivians do not like to serve other Maldivians and the only time
and place we feel happy to wait tables is when a European or a Japanese
tourist is seated at a resort restaurant. Serving locals is not easy. We
demand more from and show less respect to waiters than any other people.
That is one reason why locals do not want to work as waiters for local
customers.
The difference between good service and excellent service is generally vague
and a lot depends on the attitude of the server. Attitude means a lot.
Customers have never been more educated and they can distinguish a
genuine smile from a forced one from a mile away. No customer accepts
substandard treatment and will not come back to a discourteous waiter.
Waiters can make or break a restaurant's image.
It is therefore absolutely necessary for XYZ Rest. to attract and retain top
talent when it comes to waiters. It is the only way they can get ahead of
competition.
Upon closer observation and further interaction with the staff I find that the
teams there not only lack professionalism but motivation and drive too. It is
true that the management, the manager, assistant manager and the
supervisors are not capable of ensuring the efficiency and effectiveness of
the operation. The management is also not able to train, motivate and
schedule staff. The general feeling amongst the staff is of distrust towards
each other. There is no team spirit and the majority of the employees feel
that they are underpaid. For staff, I recommend the following immediate
actions:
A comparative salary survey be made of similar restaurants
(Nasandhura, Raanbaa and Seahouse) in male and pay should be
adjusted according to market averages or above.
Living conditions for employees should be improved.
In addition to the service charge, a special incentive program should
be started. If we can establish the triplicate checking system, we can
analyze sales by waiter and challenging sales targets should be set for
waiters based on their current performance. This approach is like a
double edged sword, because if a waiter wants to sell more, he will
have more interactions with the customers and thus improve the
standard of service or at least the perception of it by the customer.
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The proposed relocation of the beverage counter is not recommended
for the following reasons.
1. The relocation will place the beverage counter a long way away from
the service area and this distance is too far considering the current
speed of service which is below par. The location of the counter also
means that the waiters will have to make two trips all the way to the
counter, one to place the order and another to pick up the order.
These trips will slow down the service speed and reduce the overall
efficiency of service as there is no guarantee that the drinks will be
ready within a set amount of time and there is no way for the waiters
to know when their drinks are ready.
2. The second reason is that the proposed drinks counter and the hut
simply cannot accommodate the furniture, fixture and equipment
required for a full-fledged drinks counter.
3. The third reason is that the hut is not secure or safe enough for a
drinks stock as it is relatively isolated and made of plywood and
canvass thus easy to break into or vandalize. The nature of the hut
itself makes it unsuitable to house electrical equipment such as
refrigerators and chillers as the plywood and canvass structure is not
strong enough to withstand heavy rain and seawater.
The hut can however be used for promotional activities such as buffets,
cocktail or drinks promotions, or as a specialist counter such as a pasta bar
or as a ice-cream bar.
The proposed setting up of two pool tables inside the main structure where
the cashier and the drinks counter was located may have adverse effects for
sales for the following reasons.
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at the management's discretion. The place should be private, cozy and
comfortable with service personnel to take care of the members. This
club should have its own menu and drinks cards, a smoking n non-
smoking section (if we can spare enough space) and a separate
restroom facilities. May be it’s a better idea to make the whole place
non-smoking as members who wish to smoke can go outside and sit in
the garden.
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Re-evaluate the capacity of the kitchen, in terms of machinery and
equipment, and explore the possibility of introducing our own range of
specialty desserts, pastry and bakery products.
Conclusions
I have not really touched on the operation of D Garden deliberately. From the
accounts I have gone through, from what I have heard from the people
involved in the operation and from the customer feedback of people I know,
it is not worth for us to keep that operation going. I would suggest that we
close the place with immediate effect and use the manpower there at XYZ
Rest. and at least try to generate enough money to cover the monthly rent.
From an operational point of view, keeping the place open will result in
greater losses and intangible damage to our reputation and image.
XYZ Rest. needs to build an image and regain the confidence and trust of the
customers and this will take time. Improvements should start now and
customers should be able to see changes happening. A good start will be the
menu and staff uniforms. These two changes will be very visible and will be a
good step towards confidence building.
XYZ Rest. needs a fulltime Manager who can re-establish the place in the
market. We need someone who can work independently with minimum
guidance and direction.