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Home / Uncategorized / It’s All About Numbers: Performance Measures to Enhance Operational Effectiveness

It’s All About Numbers: Performance Measures to Enhance Operational Effectiveness

We all know
foodservice operations are busy places! There is a continual balancing act between
managing the resources needed to prepare and serve safe, high quality food, and
controlling costs in order to stay in business. Owners, operators, and staff
are all challenged to be efficient and effective
in completing duties and achieving results. This is known as productivity.
Another definition for productivity is the effective use of resources to
achieve operational goals. But here is the question – how do we know that our operation is productive?

There are a
number of performance measures that can provide feedback to managers regarding
effectiveness. In this first blog for May, we will discuss some of these tools
and how they might be used for a foodservice. These assessments can track the
effectiveness of many aspects including operational, financial, food safety,
customer service, and human resources. Comparison with industry (external) or
internal benchmarks can provide useful feedback on performance.

In the
second blog for May, we will discuss some strategies to improve labor
productivity, such as time-motion economy, ergonomics, and work simplification
principles. As a side note, some research has found that the application of
these techniques not only improves consistency and quantity of work, but leads
to less fatigue and injury by workers – so a win-win!

There are
many metrics that can be used by foodservice managers. There isn’t one best way
to track operational productivity, but the key is to be consistent so that trend data are captured. As noted earlier,
measures address different aspects of the operation. Below are a few to
consider for use in your operation to track productivity.

Operational Metrics

Many onsite
foodservices use meals per labor hour; however, this can be affected by
procurement form of food purchased. Food cost (a financial measure) may be
higher if convenience forms of product are purchased, say fresh-cut produce,
but there will be savings with fewer labor inputs needed to contribute to the
meal. Another measure larger operations (with multiple functional areas, such
as sit-down restaurant or catering unit) or sites (like different schools in
one district) might use is labor hours per unit.

Financial Metrics

Food cost itself
and food cost as a percentage of revenue, also known as food cost percent, are
very commonly tracked to assess financial effectiveness of an operation. If
this isn’t being done within the organization – it should be! Tracking trends
and other inputs related to food purchases helps in making decisions about
labor needs and product sourcing. A general rule of thumb is food cost percent
should run about one-third of operating costs.

third to half of operating costs typically falls within the expense category of
labor. Some operations track labor cost per unit and/or labor cost as
percentage of revenue. Many external variables will affect this, such as
whether there is a local minimum hourly wage or the work force is unionized.
Every time a foodservice is open, there needs to be staff present. So the
operational challenge is to figure out the number of staff needed to complete
the identified tasks at the assigned times. Of course this means some knowledge
of how busy the operation is going to be! When scheduling staff, managers will
generally have a sense of historical needs (i.e. it is a good bet Saturday
night will be busier than a Sunday morning for a hamburger joint) and any
community events that might increase sales. Having too few staff leads to
shortcuts being taken, which can affect quality and safety of food served—and
that will only affect the operation negatively in the long run. However, no
manager wants to pay to have staff standing around chatting with each other
about their latest tattoos while ignoring customers! The type of operation,
including menu items and service style, will affect staffing needs. It doesn’t
take the Rosetta stone to decipher the magic number, but it does take knowledge
of the tasks to be completed, awareness of anticipated needs, and observation
of practices to determine staff schedules.

Food Safety Metrics

This is where we like to focus because we recognize that even one whisper about poor food safety practices at an operation can be the death knell with social media very quickly spreading the word. The Centers for Disease Control and Prevention, along with the Food and Drug Administration, have data that show poor employee health and hygiene practices are leading causes of foodborne illness.  Managers should observe when and how hands are washed and whether gloves are used correctly, including changed when tasks are changed. FoodHandler has great tools for training on these topics. 

A good
manager also should be tracking the inventory of supplies like soap, disposable
towels, and gloves. If stock moves slowly, that is a clue (a red flag) that
handwashing is not occurring when and how it should be, or gloves are not being

Time and temperature logs of storage units, end-point cooking temperatures, and temperature of foods on serving lines are all important to document. In earlier blogs we talked about the importance of time and temperature controls and FoodHandler has developed logs that can be downloaded as well as some great looking graphics that can help remind staff about these best practices.

Customer Service

customer satisfaction is important because if you don’t have a customer coming
through the door, you don’t have a business! Obviously, customers express their
satisfaction and dissatisfaction in different ways. Some will be very vocal
(both positive and negative), while others will be more passive. Common ways
satisfaction is tracked is through guest interaction (this is part of
management by walking around), meals sold, or revenue generated. Of course,
external variables need to be noted, such as the polar vortex that caused a lot
of shut downs this past winter, as well as whether an operation increased menu
prices or had promotions. Operations may track customer satisfaction with
follow-up surveys, although it takes a motivated person to respond to these.
Other operations may use a ratio of customer complaints to total customers during
a set time period.

Human Resources Effectiveness

Experienced managers know the value of a long-term employee. Clues that there is trouble in the ranks can be identified through excessive absenteeism or employee turnover. Running short staffed takes its toll on the team, affects quality, and can lead to accidents. Tracking work place injuries is also useful as this identifies needed training or protocol changes (those standard operating procedures we discussed earlier).

In the
second blog for May, we will focus more on strategies to maximize human
resources. All too often, employees are busy without being effective. You have
all heard the phrase – spinning their wheels. Well, we will cover some ideas on
how to “work smarter, not harder”, which can lead to increased productivity,
improved quality, and safer food!

Risk Nothing!