Greetings!
Danny and I recently spent a few days in New York City doing research for a client in the full-service Italian segment. We visited all kinds of different Italian restaurants, from the trendy, casual Italo-American sandwich shop Parm to Michael White’s magnificent, pasta-centric osteria Morini. We also took another field trip to Mario Batali’s amazing Italian playland known as Eataly, and we were blown away by the vibrancy of this urban multi-use marketplace. In fact, we continue to be amazed by how the Italian restaurant scene keeps reinventing itself-every time we think the Italian trend has to have gone as far as it can go, we see something new and exciting.
Speaking of new and exciting, we’ve got some new articles for you in this month’s newsletter, including our associate Jim Campbell’s roadmap for fostering all-important collaboration between the supply chain department-which all too often labors in a vacuum-and the finance, marketing, operations and culinary working groups. You owe it to yourself to read it.
To your success,
Dean and Danny
Supply Chain Management: The Value of Collaboration
By Jim Campbell, Restaurant Supply Chain Management
As with any business discipline, Supply Chain Management doesn’t operate in a vacuum—it must be connected to and engage with other corporate or entrepreneurial functions in order to be successful.
Communication and collaboration are necessary between key company departments.
Finance, Marketing, Operations, Culinary, and Supply Chain all have common interests and individual key components that will lead to success. The key collaborative components as they relate to Supply Chain with other disciplines are the development of interdepartmental relationships, broad understanding of menu and promotional products and issues, availability of supply, distribution and cost. Understand that Supply Chain is not in the collaboration business by itself, and that all departments must have interdependent relationships for optimum success.
Here’s how it works:
Finance Department
• Finance creates food and supply budget annually, and without forecasts from Supply Chain the company budgets would be flawed at best.
• Foods, disposables, smallwares, services, etc. make up as much as 40-50% of some restaurants’ budgets. Supply Chain must communicate these costs and provide them to Finance on a timely basis.
• Communications must remain open throughout the year so that any critical deviations from the original budget can be disclosed as soon as possible. Early recognition of cost increases will minimize damage and provide Finance the opportunity to work out solutions with other departments.
Marketing Department
• Collaboration with Marketing is critical to the team’s success, whether working on new menu concepts or a promotional campaign.
• Timing between Marketing and Supply Chain are essential to ensure that all menu or promotional products and materials are available when needed. Prior planning, precise timing and deadlines must be determined by Marketing and met by Supply Chain.
• Planned timing will also enable Supply Chain to negotiate better prices, avoiding last minute demands on suppliers to come up with supplies and “best price.”
• Collaboration is a two-way street, and Supply Chain should provide Marketing with best overall values. Supply Chain can support the Marketing group by providing a calendar of harvest times for fruits and vegetables as well as seafood items that will coincide with best supply and pricing. There are also favorable cyclical pricing periods for specific beef, pork, and poultry items. Marketing will be able to avoid price peaks and take advantage of weaker seasonal markets, increasing the success of their promotional and menu programs.
Operations Department
• Open communications with the Operations group has great value to Supply Chain Management.
• The exchange of information from the field provides input, both positive and negative, about products and services that are valuable in analyzing and decision-making. They also contribute to the negotiation process in a powerful way.
• If Operations believes a supplier is underperforming there are two possibilities. Either Operations does not understand the specifications or the supplier is not delivering the specifications. Regardless of the situation, Supply Chain is responsible for intervening and resolving the issue either way.
• Building a strong link to Operations leads to creative and practical ideas, and ultimately to positive policy changes. Supply Chain is constantly interacting with suppliers and can often offer solutions to the comments and suggestions made by field management or personal on the ground.
Culinary Department
• Supply Chain’s collaborative relationship is most critical and essential with Culinary. This is the ultimate interdependency for Supply Chain.
• Supply Chain must understand and respect the creative nature of the Culinary team. Creativity is the primary focus of what Culinary is all about. Their expertise and knowledge can and should be used by Supply Chain in sourcing and negotiating.
• Culinary must understand and respect the business nature that drives Supply Chain.
• Culinary and Supply Chain can most often find their common ground in “high value,” where quality is obtained at a reasonable or very reasonable price.
• Once Supply Chain understands Culinary’s drive for quality they will be better able to target those products and focus on negotiating the best price.
• Culinary must also understand the focus of Supply Chain to source alternative products and brands of equal quality.
• It can be a delicate balance, but the relationship can be strengthened and developed through common goals of which “high value” is one. There will be instances where Culinary will be most comfortable specifying brands, but for the most part and in the long run focusing on pure quality and specifications as opposed to “brand specifications” is the best path to success.
We have focused on issues and the nature of Supply Chain Management collaboration with Finance, Marketing, Operations, and Culinary. In truth this is just one component of the total collaborative effort. In order to attain the maximum success, each discipline or department must interact will all other key departments. Once interdependency is recognized by all, you will be amazed at what can be accomplished. Collaboration when executed properly yields the best result for all those involved including the restaurant guest. The keys are mutual respect, open and inclusive communications, planning, learning, and execution.
The restaurant business is really just another “team sport.” Call the Synergy team for a consultation if yours needs a little help with the process.
The Finer Points of Good Service
Lately Zagat Survey has been covering customer and employee annoyances on its blog, collecting responses to topics ranging from the 10 Most Annoying Restaurant Trends (“oversize wine glasses”) to the 10 Foods Chefs Most Dislike Cooking With (“balsamic vinegar”). A recent post about The 8 Most Annoying Questions Asked in Restaurants” —by both staff and patrons—got us thinking about service. Which continues to be one of the biggest restaurant-experience bugaboos for Zagat survey respondents and other customers alike, by the way.
Here are some specific do’s and don’ts for rendering good service:
• The owner, a manager, a star-server, the chef… someone should always be scanning the dining room to make sure everything’s going well. You don’t have to be standing around to notice when a customer is frantically waving arms to get someone’s attention
• Servers never refer to guests at a table as “you guys,” as in “Are you guys ready to order?” Well, maybe at Brick House
• Water glasses are kept filled
• Appropriate utensils and other eating aids have been delivered before or along with the course in question: steak knives, oyster fork, extra napkins with the barbecued ribs
• This is a point of argument, but we believe that individual plates should not be picked up when other people at the table are still eating—unless someone has pushed their plate aside to sketch their new house on a cocktail napkin
• Servers are trained to have at least some understanding of body language and group dynamics so they can judge the energy and mood of the table. Are they getting acquainted after not having seen each other for six months? If they haven’t even opened the menus perhaps now is not the time for a three-minute recitation of specials
• Speaking of specials, the kindest approach is on a separate menu (as opposed to verbally), unless there are only one or two, and always with prices
• Employees are generally happy with their jobs, function well with their colleagues, are capable of working as a team, and won’t be bringing a bad attitude or the idea that “this isn’t my job, it’s the busser’s” to the table
• If a server simply cannot get to the table s/he should at least say “I’ll be right with you” or send someone else over to help
• The check is not automatically placed in front of the man. In fact, unless someone has specifically asked for the bill, it should be left in a neutral place
• Remember Steve Martin in the movie “The Lonely Guy”? Avoid asking “Just you tonight?” or “Are you alone?” of an arriving guest or when first approaching the table. (Better scenario: The host asks “Hello. Table for one?” and then informs the server… or removes the extra place setting as a cue)
• Other rules for singletons: Don’t stick them at the worst table in the house, and don’t give him/her short shrift because his/her check might be lower than the adjacent deuce’s. Experienced diners—and many road warriors are these days—can tell
• Keep “notes” on regular customers, ranging from favorite table to what kind of Scotch they prefer. They’ll love you for it
• Hire for passion and personality, train, reinforce, offer constructive criticism, repeat
Need help whipping your service into shape? Contact Synergy Restaurant Consultants for a free consultation
Life in the Age of Yelp
Talk about game changers: Crowd-sourced social media review sites like Yelp have put the fortunes of businesses like restaurants into the hands of mainstream consumers, rather than just the paid and published reviewers. And that has really changed the way your patrons and potential customers get and share their information.
For one thing, Yelp has profoundly affected how customers find you. For instance, your Yelp review will pop up in results after your restaurant’s name is input into a search engine like Google, second only to your website—an indication of Yelp’s growing popularity and relevancy. And guess what happens if for some reason you don’t have a website, or rely solely on Facebook?
The volume of reviews is important to search engine rankings, too, since search engines favor accurate and complete business listings.
Of course, many people searching for a place to dine go straight to Yelp, finding your business review-first. The statistics are impressive: The company claimed a monthly average of 66 million unique users during the last quarter of 2011 (the last period for which such data was available), and the number of mobile users at five million and counting as of November 2011.
Yelp reviews can have a significant bearing on sales, especially for independent restaurants. A recent Harvard Business School study revealed that a restaurant that boosts its Yelp score by one full star can see revenues increase 5 to 9% (chains did not see the same kind of bump in response to an improved score). Another issue that apparently affects Yelp reviews is daily deals; according to another Harvard study, people who visit a restaurant on a deal are more likely to give it a negative review.
And while Yelp has a review filter to weed out either customers or business owners who are loading the results, the situation can be as fraught as the old days of fine dining when losing a Michelin start could be the death knell for a restaurant.
Not surprisingly, operators tend to have a love-hate relationship with Yelp, but it’s smart to learn what you can from the site and its users.
Monitor What People Are Saying About You. Not just on Yelp, but on other review sites, too, like Urban Spoon and local directories. If this sounds like a lot of work, there are services and tools that you can subscribe to that will help you stay on top of new reviews, including Google Alerts and Yelp’s own tracking tools.
Yelp Can Be a Warning System. Pay attention and you may learn something that you wouldn’t have otherwise noticed, like a snippy bartender, erratic quality of a popular menu item, out-of-whack price point compared to competitors, or a reservations policy you didn’t authorize. While any customer can have a bad experience on one visit, read all your reviews to see if any patterns emerge. Develop Policies for Whether and How You Will Respond to Reviews. Here’s where the pedal really meets the metal. Yelp allows you to respond either publicly or privately to reviews, both good and bad, and the stories of business owners who have converted complainers to loyal customers are legion. And the instances of an operator declaring war on reviewers —and vice versa—are the stuff of legend.
Monitoring reviews and responding, however, takes time. Naturally, this has led to a flurry of new businesses that will manage your SEO (search engine optimization) and online reputation—for a fee. Consider asking a trusted employee or associate, perhaps someone who works in the back office, to monitor and flag reviews; they can also handle favorable reviews, which basically just call for a simple thank you if you do decide to respond. Good customers can also be solicited, to write a counter review, but that can lead to other problems.
Whatever you do, never answer in the heat of anger. Yelpers yelp because they are vocal and plugged in, and an abusive response can easily backfire on you.
Tip of the Month
Not everyone can employ a star bartender like PDT’S Jim Meehan, but they can certainly gain inspiration from his new book “The PDT Cocktail Book,” which should be a must-read for anyone who wants to up their craft cocktail game. Other sources we like are the exhaustive site Drinks Mixer, the free Mixology Drink Recipes app for iPhone, and the oldie but still goodie drinks database from Esquire magazine.