August 15, 1998
FOR BACK-OF-THE-HOUSE DEMANDS: The All-In-One Database
Modern non-commercial foodservice operations are more complex than ever. Central production kitchens often support a wide range of satellite facilities, as well as commissaries, cafeterias, catering, and banquets. As a result, a heavy burden is placed upon an operator's back-office system to effectively manage the flow of data throughout the entire organization.
Unfortunately, most back-office systems come up short. Why? Often, there are several different systems handling inventory control, purchasing, menu analysis, payables and receivables. Due to poor data interchange, the same information often has to be entered repeatedly. Even in a LAN environment, there is usually a missing piece - such as requisitions and transfers between locations - that must be done manually.
The resulting inefficiency translates into a tremendous waste of time. Moreover, the inherent lack of control invariably leads to a misestimation of food costs, faulty inventory figures, and lowered profitability.
To cope with these problems, many operators are turning to an integrated back-office system with the power and flexibility to handle each of the unique aspects of their business - putting all information into one database that is easily accessible to all operational areas.
Elements of a Good Back-Office System
There are many benefits to an integrated back-office system. They include:
- Just-In-Time Purchasing
The ability to forecast sales based on prior activity and current inventory greatly simplifies and refines the purchasing process. By being able to accurately predict what is needed, guesswork is eliminated and inventory levels are kept at a minimum.
With the level of control this type of purchasing allows, running out of items on one hand or spoilage on the other is reduced or eliminated, significantly affecting the bottom line.
- Inventory Control
Many operators continue to estimate inventory by manual count. But today, that's not enough. A good system can automatically pinpoint what's on order, where current stock is located, what's on requisition, as well as spoilage and loss rates, and other variance.
This type of detailed analysis allows a facility to determine if kitchens are over or under-portioning, if yields are less than expected, and will even pinpoint the likelihood of theft.
- Cost Analysis
In any menu mix, it's important to discover what's profitable, what's popular and what isn't selling in order make the necessary adjustments. And for any intended price change, a prediction of consequences is vital. A good system will be able to easily provide this level of functionality.
Additionally, by using a system that is able to conduct outlet-specific analyses throughout the organization, management can zero in on which units generate profit and where any losses originate.
- Time Savings
Performing administration manually, or with non-integrated systems, is incredibly time consuming. With a system that automates the wide-ranging facets of a complex, multi-unit environment, management personnel are freed up from the constant inputting and updating of information, allowing them more time to concentrate on the bigger picture.
A Case Study
Santa Barbara City College's Hotel, Restaurant and Culinary Department consists of nine outlets and a central commissary. It operates student and gourmet dining, coffee shops, childcare, fast food, catering and banquets.
"We used to have trouble with the back-office until we centralized and automated it," says associate professor, Thomas Smith, who oversees this student-run facility. "Purchasing, costing, and inventory, in particular, were cumbersome and time-consuming."
The college utilizes a central commissary. Each foodservice unit transmits requisitions electronically to the purchasing department. The system evaluates requests against existing inventory, finds the best quotes from its database and generates purchase orders. It also knows where inventory is within the facility.
"Instead of just ordering more of an item, with our Eatec system we are able to spot that ten cases are in the cafeteria that aren't needed right now," says Smith. "This way, we keep inventory at a minimum and use stock efficiently."
Another challenge for the college was the inaccuracy of costing methods. Staff and management had trouble finding information such as invoices, the price of items and package sizes. If a student wanted to implement a new menu item or a special, it was hard to calculate it manually.
"Most would get discouraged," says Smith. "Not anymore. They can predict expenses ahead of time and make adjustments to ensure any changes are both popular and profitable."
Still another cost-related obstacle concerned end-of-the-month bill processing. Students used to reconcile all invoices against statements, a cumbersome process for such a large operation. Now, all purchase orders are automatically entered as journal entries, keeping accounting time to a minimum.
"Take a catering event," says Smith, "we can pre-cost, post-cost, then analyze it to see what worked and what improvements have to be implemented. In most establishments, they are so concerned with service issues that they neglect the cost side. Yet using Eatec software, this analysis can be done in minutes and saves us a considerable amount of time and money."
In the days when everything was counted by hand, inventory control used to be a near-impossibility for Santa Barbara City College. After many days of work, all they ended up with was a total for each item on campus, without any clue what each satellite had.
"Now, we can inventory every entity on its own, as well as the whole establishment," reports Smith. "You can clearly see which units are performing and which aren't. We know exactly where food costs are rising or where sales are dropping."
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