May 2004

la Madeleine improves food cost management with EatecNetX
By H. Rae Gibbons

The rustic and inviting French-country décor of la Madeleine Bakery, Café & Bistro provides an enticing backdrop for its freshly prepared menu items. The bakery opens in the morning with the scent of warm bread and croissants coming from the ovens. And throughout the day guests can enjoy a variety of signature dishes, such as Rosemary Rotisserie Chicken, Caesar salad, tomato basil soup and Herb-Crusted Pork Tenderloin. The first la Madeleine opened in 1983 in Dallas, Texas and today there are 62 locations throughout seven markets including Dallas/Fort Worth, San Antonio, Houston, Baton Rouge, New Orleans, Atlanta, Washington DC and Phoenix.

In order to consistently and effectively manage food costs and production at all of its bakeries, la Madeleine implemented EatecNetX, an enterprise back-office solution from Eatec Corp. La Madeleine uses the system for purchasing, receiving, inventory control and production management, as well as for inter-site requisitions and transfers among its bakeries. Since implementing EatecNetX, la Madeleine has improved its purchasing processes and increased efficiency in the back of the house.

Previously, la Madeleine managed its food costs through labor-intensive manual data entry/spreadsheets that were then entered into its accounting software system. With the introduction of EatecNetX, the chain has discovered a solution that automates the process; saving time and enabling the company to analyze the data in order to better manage and forecast its daily production needs. Richard Hodges, director of learning for la Madeleine, says, “We needed a system that would allow us to manage and maintain actual foods costs and compare them to an ideal or theoretical food cost.”

EatecNetX also uses daily sales data, imported from la Madeleine's point-of-sale system, to create inventory depletion and profit analysis reports by bakery.

After the initial implementation, la Madeleine began testing EatecNetX for purchasing at several sites by connecting the system to its main ingredient supplier for the automatic exchange of purchase orders and pricing information. By doing so, la Madeleine can order items electronically and can verify vendor deliveries without double entry. The system also allows for easy recording of miscellaneous charges, messaging on shortages and suggested orders driven off of ideal usages instead of just pars. Furthermore, the system interfaces to la Madeleine's financial system to simplify the invoicing process even more.

Living the dream
La Madeleine’s in-house IT department began its search for a foodservice management system by looking into four providers, and eventually selected Eatec.

After choosing the system, la Madeleine rolled the system out gradually. “First we rolled out the invoice and inventory modules. Then a month ago, we rolled out production and planning. And now we’re working on the ordering module,” says Hodges.

And although la Madeleine has only been using EatecNetX since September 2003, Hodges, who has experience working with both the front-of-house and the back-of-house technology, attests that “Our rollout of Eatec has made a dramatic change in our business process that will lead to better management of our ingredient costs.”

“I’ve worked with a lot of different types of food cost software in the past, and I’ve never worked with a system that has as much potential as EatecNetX. What this system can do today is what we all dreamed about technology being able to do years ago,” adds Hodges.

As with any new system, the managers were initially weary of the change in their routine, but are now starting to realize the benefits. “Our bakery managers are the ones who use the system, and, as with any technology implementation, there was some resistance to the change at first. But now that they’ve had some time to learn the system, they’re at the point where they are seeing the benefits because the processes have gotten faster and faster. And the payoff is with the details we get out of it — the ability to analyze that data and react to it.”

Up to par
EatecNetX offers a means to quickly and efficiently analyze the data from the bakery’s sales history, which makes it easier to forecast usage. Hodges says that at this time the financial benefits have not been fully quantified. However, one major advantage is that it has improved the company’s process of updating pars — how much food should be made and how much should be ordered. “The managers used to have to sit down and run loads of reports, use a calculator, and spend 4-6 hours updating pars, but with EatecNetX, they have the ability to update pars in 10 minutes. It makes it that fast.”

Streamlining the process for calculating pars and forecasting usage has certainly eased the mind of one of the company’s bakery managers testing the ordering applications of EatecNetX. According to Hodges, the manager used to insist on placing orders himself because he was the most familiar with the manual system and the usage of product in the bakery. Now, with EatecNetX in place, the manager is comfortable enough to allow other managers to place orders because he is confident that it will be done well with the aid of the technology.

Looking forward, Hodges feels confident that EatecNetX will continue to be a good fit for la Madeleine. “To be able to look at the sales and purchasing history in a useful manner and make decisions in a time efficient manner,” notes Hodges, “is truly what an automated system should allow you to do.”

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