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Guest Blog: Never Waste a Good Crisis

David Read of Fourth’s partner, Prestige Purchasing says “the time has come for a revolution in kitchen productivity.”

David Read, Chairman of Prestige Purchasing

The re-opening challenge – As the sector gradually re-opens after the Covid-19 lockdown, it will be faced with multiple challenges in the period before a return to “normality” – whatever that is. Broadly, these fall into three key areas, covering how to:

  • win consumers trust that its ok to return
  • operationally deliver a safe environment for all
  • be cash generative with low volumes during a long ramp up

Why the long ramp-up? Because the economic impacts of the pandemic will be deep, and consumers will be cautious about returning to spaces that are inherently social in nature. The Resolution Foundation has reported that 73% of the population are now living on reduced income and one in three of us report using savings to subsidise living costs. Unemployment will be high, and consumers high on caution and low on cash.

Sam Hart, who co-owns 11 restaurants in London including Quo Vadis and the four-strong Barrafina group is quoted as saying “Many have survived the closure, but the question is how do you survive the reopening?” Or, as Will Beckett of Hawksmoor puts it: “Everyone is nervous about what happens when ministers go on television and say, tally-ho, let’s get on with life,” suggesting that JRS (HMG’s Job Retention Scheme) will likely be turned off. Costs will return. The big question is, will the customers?

Surviving the re-opening – I’ve spoken extensively to catering operators over the past 2-3 weeks, and there is a universal question being asked – “how do we survive through a period of low volumes, and emerge strong enough to be competitive when full trading returns?” This will require new thinking, and much can be learned on this subject by examining a century long innovation process within the manufacturing sector called LEAN.

LEAN has been described as “…a way to do more and more with less and less – less human effort, less assets, less time, and less space – while coming closer and closer to providing customers exactly what they want”. After all, what is a kitchen but an assembly unit that provides the final stage of the manufacturing process right beside the customer?

Our starting point must surely be to understand more closely what is value for the customer, and equally critically….what is not. As an industry I believe we rightly care greatly about choice and creativity, but rarely are the costs of these properly understood against the specific customer value they create. The result is that all too often we build in cost, and then accept it without challenge as an everyday occurrence in our operations. This surely has to change. If not now, then when?

For example, I’ve been in this industry for 48 years and have yet to see any menu development process being led by quantitative research which accurately maps consumer reaction to increases or decreases in the number of dishes on offer. I’ve seen bewildered diners struggling through menus with more than a hundred dishes, and other highly successful operators with less than ten. And there’s scant evidence about the degree to which the act of changing menus regularly adds to or subtracts from revenues and profits. These two decisions alone have a massive impact upon the efficiency of production. If dishes are added to menus without significant consumer impact, then the additional supplier stocking/distribution costs, kitchen preparation and storage costs, labour and wastage involved are a considerable fixed cost.

And this is before any consideration of the mix of bought in ingredients that are fully or partly pre-made, compared to scratch cooking, and the management of waste in the production process.

And don’t forget, a LEAN approach is a dream for supply chain people. When a menu is truly optimised to deliver value then you emerge with an optimum number of dishes, ingredients, pack sizes, storage, kitchen preparation, labour, speed, space, and of course quality. The simplicity that is created provides the ultimate tool to drive value out of supply activity whilst still improving product availability and quality.

LEAN in the world of Foodservice – It’s not as if we don’t have one of the best examples of LEAN right under our noses, in one of the most iconic brands in our sector – McDonalds. Having failed in the movie business Dick and Mac McDonald moved to California to operate a traditional American diner. Pretty soon they realised two key things -the biggest selling product by far was hamburgers, and many consumers seemed to have a preference for speed of delivery of the product, and a lower cost, compared to the traditional slower and more expensive table service. In 1948 they took a risk by streamlining their operations to sell only hamburgers (and a few ancillary items) at a new low cost of just $15c. To facilitate this, they introduced their Speedee Service System – a partially mechanised production process that took much from the early developments of LEAN production at the Ford Motor Co. The rest is of course history, but what they did was create a focused value offering….. that “did more and more with less and less – less human effort, less assets, less time, and less space – while coming closer and closer to providing customers exactly what they want.”

LEAN is a process, not a solution – In the past I have written on this subject and have received some pretty mixed feedback. In some instances, my suggestion has been wrongly interpreted as a plea for some kind of Speedee Service System throughout the industry. Nothing could be further from the truth. What I do believe though is that now would be a great time for restaurateurs to get focused about giving diners exactly (and only) what they really want, whilst raising the game on quality, price and gross margin – by operating with less complexity, less labour, less time and less space.

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