sha508: foodservice management: control systems and ... · explain the value of foodservice...

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SHA508: Foodservice Management: Control Systems and RelatedSystems


This course includes

Two self-check quizzes

Multiple discussions; you must participate in two

Three tools to download and use on the job

Three Ask the Expert interactives

One final action plan assignment

One video transcript file

Completing all of the coursework should take about five to seven hours.

What You'll Learn

Assess the effectiveness of a foodservice control system.

Assess the effectiveness of a foodservice management system.

Explain the value of foodservice operation systems for menu planning, purchasing, receiving, storage, and production.

Course Description

Control Systems are used to manage costs, minimize loss and to optimize the processes involved in foodservice

operation. Purchasing, production management, scheduling, analysis, reporting, forecasting - everything it takes to create

a sustainable, profitable business requires the right system of methods, controls and protocols.

This course explores the functional roles of foodservice managers and the control systems they use as they progress

toward positions of greater responsibility - from the assistant manager all the way up to the multi-unit manager.

In this course, you'll learn specifically how to establish quality and efficiency control over purchasing, receiving, and

storage of products as they flow into production. Examine the conditions that allow for loss, and develop systems to

prevent it. Using case studies as context, you explore different management roles to assess control systems and their

effectiveness.

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/SHA508-video-transcript.pdf


Click Play to Listen

Stephen Mutkoski The Banfi Vintners Professor of Wine Education & Management, School of HotelAdministration, Cornell University

is the Banfi Vintners Endowed Chair of Wine Education andStephen A. Mutkoski

Management at the School of Hotel Administration, where he has taught since 1972. He

received his BS from Cornell University in 1967 and his PhD in 1976. A former food and

beverage manager and restaurant owner, Mutkoski has been able to combine his

professional career with his love of food and wine. He teaches several food and beverage

management courses in both the academic programs and the executive education

program at Cornell. His "Introduction to Wine" class has an enrollment of over 700

students each term. In the past 23 years he has taught over 33,000 Cornell graduates

about the pleasures of wine and the fascinating story behind each label.

Start Your Course


Module Introduction: Purchasing, Receiving, Storage, and Production Systems

Once the menu has been developed to meet both the expectations of the market and the financial goals of the business,

the operational systems must be established. These systems assure that the correct products are procured and that their

quality and yield are maintained as they flow through the operation and into production. This module covers the essentials

of establishing a professional purchasing system, staffed with employees trained in selecting suppliers and determining

the appropriate buying method for each product, and who are willing to do the research necessary to stay on top of market

conditions and trends. A strong receiving system is important to monitor the performance of both the purchasing agent

and the suppliers; the essential aspects of proper receiving are outlined here.

Once product is accepted into the operation, the storage system must follow guidelines to provide the correct environment

to preserve the quality of the product until it is needed in production. Finally, this module explores the need to set

standards and develop consistency in the food production area. Using standardized recipes and plate presentations can

help assure that consistent, high-quality food items reach the customer.

After completing this module, you will be able to:

Identify the function and components of the foodservice purchasing system, and assess its effectiveness.

Identify the function and components of the foodservice receiving system, and assess its effectiveness.

Identify the function and components of the foodservice storage and issuing system, and assess its effectiveness.

Identify the function and components of the foodservice production system, and assess its effectiveness.


Activity: The Need for Consistency

Customers are loyal to operations that provide them with the appropriate value and consistency of product for the dining

occasion and price. So consistency is a key factor in building repeat business. Without specifications, suppliers are free to

decide what they send a foodservice operation. This freedom introduces too much variability and generally results in

unhappy customers. Specifications are essential if consistency is going to be maintained.

Storyline: The Disappointed Banquet Host

You're the manager of a food and beverage operation in a hotel that does an active and lucrative banquet business. Prime

rib of beef has proved a very popular item for functions. It's efficient to prepare and serve and is quite profitable. Lately,

however, customers are doing a lot of grumbling about the prime rib.

Here are three specific complaints:

"The top portion of the prime rib cut that everyone received at my table was tough compared to the main piece."

"Some of the guests at my table were served nice, thick and juicy portions of prime rib, but mine looked like a

pancake on the plate!"

"This prime rib just doesn't have the flavor and tenderness that I'm used to being served at functions of this

caliber."

It's your job to track down the culprit quickly. You speak with the purchasing agent and she says she is ordering by

specification. Product consistency relies on a tight, detailed spec.


Read: Functions of the Purchasing Department

The key functions of the purchasing department are to research the market, develop detailed purchasing specs, survey

and select suppliers, select buying methods and negotiate the terms, purchase appropriate items for the market, maintain

continuity of supply, review the performance of suppliers, evalutate new products on an ongoing basis, communicate

market and product information to the menu planning and production teams, and maintain a competitve position in the

marketplace.


Read: Skills of the Purchasing Agent

You can't make up for a bad purchase. If your menu features steak at $50 a plate, it's imperative that your purchasing

agent find a reliably available, high-quality, dry-aged sirloin at a price that provides a profit to the restaurant. If purchasing

fails and procures an inferior product, even the most talented chef won't be able to fool customers with an inherently bad

cut of meat. It is also true that if the purchasing agent overbuys, understocks, or overpays for products, the operation will

suffer losses. A detailed purchasing specification can go a long way to ensure the quality and consistency of product at an

agreed-on price. But it takes a purchasing agent skilled in selecting reputable suppliers, negotiating contracts, analyzing

market trends, and evaluating products to effectively procure the food and non-food items required by your operation. The

procurement function is the critical link between your suppliers and your front-of-the-house operations. You can't let just

anyone do the job.


Watch: Elements of a Purchase Specification

Purchase specifications may be a pain to fill out (all that detail!), but the consequences of a vague product description

make filling out the specification (spec) correctly worth the time and effort invested. When your order is accompanied by a

detailed specification, you--not the supplier--control the quality, consistency, and price of the product delivered. Knowing

how to create a detailed product spec is an especially critical skill in countries where uniform standards like NAMP

numbers and grading systems don't exist.


Tool: Specification Sheet Form

Download the Tool

Specification Sheet Form

This utility provides specification templates that can be modified for your operation.

Example:

Product Specification Sheet (Meat)

Menu Item:

Product:

NAMP (or complete description) :

Grade:

Trim factor:

Weight range:

Method of tenderization:

Packaging:

Special considerations:

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_specification-sheet-form_01.pdf


State of refrigeration:

Product Specification Sheet (Fish)

Menu Item:

Product:

Count:

Packaging:

Special considerations:

State of refrigeration:


Read: The Right Supplier

Key Points

Reputable suppliers are essential to success in foodservice.

Background checks and plant visits are necessary research.

Selecting honest and stable business partners now can save a lot of headaches in the long run. The foodservice business

is volatile by nature, so finding reputable suppliers you can count on for timely deliveries of consistent, high-quality

products is critical to the health of your operation.

Evaluating suppliers requires doing some research. To whittle your list of potential suppliers down to a few promising

candidates, perform thorough background checks. Reliable sources of financial information are Dun and Bradstreet,

Standard and Poor's, or the supplier's bank. Pick up the phone and call a few of their current clients--there's no better way

to check up on their reputation. Before making a final commitment, visit a supplier's facility and request a tour of their plant

and a chance to talk to key employees. You might find that a supplier who looks good on paper doesn't measure up in

practice. When market conditions change adversely, only the strong suppliers have the capability to weather the storm

and keep their performance up to the level promised. This story shows why the lowest price isn't always the best price.

The following is a true story:

A mid-sized hotel doing an active banquet business with excellent prime rib sales wants to lock in a price for this product.

Sarah, the buyer, writes the following specification:

: Rib roast Item

: Roast ready rib Product

: #109 NAMP

: USDA Choice Grade

: 18-22 lb. Weight range

: Aged 14 days Method of tenderization

: Cryovac Packaging

: Shipped refrigerated at temperatures below 38 F.State of refrigeration

Meat Price Relationships

The following charts illustrate the seasonal price

moves in strip loin and brisket.

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She sends that specification out to five different purveyors in January for bids on a contract that will last for eight months.

She knows from following the meat trend reports that beef prices for loin and rib cuts are at their annual low at that time of

the year. She would like to lock in a price close to that low that will take her through the operation's peak summer months

and the wedding season.

She gets the bids back and finds that only one comes in at exactly the current market price for the #109 ribs--the other

four are between 3% and 8% higher. She has never done business with the company Midnightmeat Inc., which came in at

the lowest price, but since she wrote a tight spec, she feels she'll be protected, so she grants them the contract.

For the first three months, things go along nicely and the ribs received are all within specifications. Sarah smiles: she

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https://d31owemgwclw9w.cloudfront.net/content/SHA/SHA508/sha508_121_chrttwo_en-us.pdf


knows the current price for #109 ribs is already 20 cents per pound higher and the price will continue to increase through

the summer. She feels proud and a bit smug for having locked in such a very good deal.

In April, things start to change. Steve, the receiving clerk, notices that the contents of the shipment from Midnightmeat are

very strange. Normally, ribs are packed two to a box, but this time he finds that several boxes contain only one rib, yet

each box weighs over 40 lbs! Upon thorough inspection, he realizes that these are primal #103 ribs with all the short ribs

and waste attached. He starts spending more time with each delivery sending things back. Steve notifies Sarah, and she

voices their complaint to the plant manager on the phone.

As May and preparations for the wedding season get underway, matters get worse. Steve's frustration level rises over the

games Midnightmeat is playing. Oven prepared #107 ribs (with deckle and cap meat) are routinely mixed in with the #109

ribs. Weights on invoices don't come close to matching the weights he totals on the scales. The kitchen is furious because

they're forced either to spend time trimming and fabricating what they're being shipped or to go without for several days on

the occasions they ship product back. Several conversations with the plant manager result in nothing changing.

Sarah realizes she made a big mistake. She went with a supplier she had never done business with before without

thoroughly checking them out ahead of time. She did not tour the facilities or meet with plant management. She put all her

eggs in one basket and will now have to break the contract and seek out other suppliers, who will charge the going market

price (much higher).

But the story doesn't end there. First, Midnightmeat threatens to sue the hotel for breach of contract. This action gets a

lawyer involved and that costs even more money. Three months later, Sarah receives a letter from the judge overseeing

the bankruptcy of Midnightmeat Inc. The judge says that the hotel owes Midnightmeat some $75,000 for product delivered

but never paid for. Fortunately, the hotel enforces a policy that requires the receiving clerk to sign every invoice. When the

Midnightmeat invoices are matched up with billing statements and checks cut, the hotel is able to show that all shipments

they actually received were paid for.

The moral of the story?

Your dream deal can turn into a nightmare if you cozy up with the wrong vendor.


Watch: Methods of Buying

There is no one-size-fits-all buying method. The purchasing agent evaluating the most efficient, cost-effective buying

method for a particular product or group of products must take several factors into consideration. The size of the

organization matters: is it a small restaurant or a large, multi-unit chain? Buying in ample quantities can save money and

assure the product is on hand. Is there sufficient storage capacity to warehouse the items, and can the operation afford to

tie up that much capital? What if the price actually drops after investing in too much product? It takes a lot of time to

research market trends, look over quotes, and negotiate contracts in an effort to secure a good price for quality product on

sensible terms. Can the purchasing agent invest that much time? And are the savings worth the investment?


Watch: Five Stages of Selecting a Supplier

Once specifications have been developed, the next major step in the purchasing process is to select the sources of

supply. Dont think of a supplier as simply someone who delivers your products: get the full value by developing a strong

working relationship. Start by doing your homework, and then select your partners wisely.


Ask The Expert: Purchasing

ARAMARK's John Orobono, Putnam Gibson of Houston's, and Philip Kendall summarize very different approaches to the

purchasing function in their operations. They also divulge the best sources of market information, and describe how

technology, such as the Internet and IT, has affected purchasing's ability to communicate and source information quickly

around the globe.


Read: Evaluating the Effectiveness of Your Purchasing Department

The following is a checklist for evaluating your purchasing departments effectiveness:

How many new products have they tested this past year?

How many discounts have they been able to take advantage of?

How many times have they turned over the inventory in the past month? In the past year?

How many new suppliers have they investigated this past year?

How many emergency deliveries have they requested?

Which market reports are they following?

What buying methods have they utilized that have saved money or created a more consistent cost?

How effective and timely have they been in communicating market changes to management and production?


1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Read: Rating Your Suppliers

It is important to have a standard of reference to use when evaluating suppliers. The form presented below covers the

major concerns of most operations. Changing the weight associated with each category makes this form useful for all

types of foodservice operations. Decide what is most important to your operation and recalibrate the rating accordingly.

It is essential to take the time to tour the purveyor's plant and speak with top management.

Make sure to look at the following:

Size. Can the plant adequately supply your present and future needs?

Staff. Is the staff sufficiently competent and knowledgeable about the product and about business to meet your

requirements and specifications?

Integrity and reputation. Call some of their customers as a reference. Are their customers satisfied with their

performance?

Labor relations. How many strikes have occurred in recent years?

Sanitation and working conditions of the plant.

Purchasing power.

Financial position. Get a Dun and Bradstreet report on the firm.

Management expertise and depth.

Product mix.

Ancillary services. Does the supplier offer storage and tenderization?

Score Card for Evaluating a Potential Supplier

Product

Quality 20

Consistency 15


Mix 5

New product development 5

Service

Delivery schedule 10

On-time delivery 5

Storage service, long-term and short-term 10

Technical services (tenderization) 5

Price

Competitive Prices 15

Terms: length of time quote holds 5

Discounts 5

100%

The weighting of the percentages will vary depending on the requirements of the purchaser. A preferred supplier

rates 85% or higher; an acceptable supplier rates above 75%; an unacceptable supplier rates below 75%.

Note that the weight placed on each category may change from operation to operation. For example, a family

restaurant might put slightly more weight on price, whereas a fine-dining restaurant might be more concerned

with product


Read: Sample Letter of Intent

Setting the correct tone for the buyer-seller relationship is important. If you dont establish ground rules from the outset,

there wont be any and you'll be forced to spend more time trying to correct the situation down the road. Do it the right way

from the start, then maintain that standard.

Sample letter of intent:

Dear Sir or Madam:

We are happy to inform you that you have been selected as a potential source of supply for our restaurant

facility. In order for both of our businesses to prosper, we must develop a good working relationship. This

cover letter, along with our specifications, are sent to you as a first step towards developing good business

relations.

All meats, primals, wholesale cuts, portion cuts, variety meats, and processed and pre-prepared items shall

be purchased through USDA-inspected purveyors only. Beef, lamb, and veal shall be graded Prime or Choice

by a USDA official and no other grades will be received.

All merchandise shall be in excellent condition when delivered and must conform to our specifications. All

items shall meet the requirement of weight range, grade, condition, and quality at all times. Tolerances will be

limited to adverse market conditions and only with our prior approval.

All products will be closely examined upon delivery. Tare weights will be determined for each product and only

net weights will be accepted, rather than any printed weights on the packaging material. All other aspects of

the specifications will be strictly enforced at all times, and it is required that the purveyor cooperate to the

fullest in preparing and shipping products for acceptance. All products shall be in sanitary condition, free from

undesirable odors, blood clots, bruises, discolorations, or other blemishes. In situations where such defects

are found concealed within the product, the purveyor will be expected to make adjustments even after the

product has been accepted.

Any product ordered in the fresh state shall be in excellent condition, possessing the quality, color, and other

attributes typical of that grade and cut of meat. Items called for in the frozen state shall show no evidence of

thawing and shall be packaged properly to prevent freezer burn. If, with just cause, such as late delivery, lack

of staff, or other such emergency conditions, a shipment of products is accepted without thorough inspection

and found to be undesirable later, the purveyor will be expected to pick up the items on the next scheduled

delivery date.


Should you have any questions concerning these policies and procedures, please contact our food and

beverage manager, Mr. Ezra Llenroc.

Sincerely,

Adam T. Rib


Activity: Problems with Receiving

The standard receiving procedure for many foodservice operations is to have kitchen staff sign for and receive incoming

products at the back door. This is the financial equivalent to letting your dishwasher make your nightly deposit to the bank!

The opportunities for loss are countless when deliveries are received without following a rigorous inspection process.

Salespeople interviewed for a recent study believe that less that 10% of hotels do an adequate job of receiving. Delivery

people often let on to the sales and loading staff which of their customers check shipments and which do not. Drivers too

often write N/S on the order form to indicate that no scale was available to weigh incoming products.

The lesson to be learned is that a properly trained receiving staff will have a business-positive effect on an organization.

When the receiving clerk is trained to enforce the purchasing spec by correctly counting and weighing every shipment,

and verifying that the product matches the invoice, mishaps like short weights, incomplete shipments, and inferior quality

products can be discovered on the loading dock. A thorough inspection serves as an evaluation of the supplier's

performance--if you are shorted one too many times, you might consider finding another supplier. Discoveries made in

receiving can even tip off management to a problem with the purchasing agent, who may believe the lowest price is the

best deal, or that it's okay to leave the details of the spec up to the discretion of the purveyor. Errors resulting from

improper receiving can be very costly and will cause problems throughout the operation. As long as the receiving staff

have the authority to deal with discrepancies (like sending items back), problems can be dealt with quickly and efficiently

before any damage is done.

If you have problems completing this activity, please consult the other resources in this section.Note:


Read: Functions of the Receiving Department

All the work that goes into understanding the customer, developing and pricing the menu, and writing specifications can go

out the window if the receiving system doesn't function properly. Establishing proper policies and procedures in receiving

is essential.

This presentation describes six receiving tasks and its related explanation. Select a task to read more about it.


Read: Procedures and Methods of Receiving

Establish a thorough and consistent receiving procedure and it will pay big dividends. Suppliers know who's not checking

their deliveries, and the mediocre product flows in that direction.


Watch: Evaluating the Effectiveness of Your Receiving Department

Is your receiving clerk pilfering merchandise? Is your supplier substituting packaging material for product? While

discrepancies between what is ordered and what is actually received can be the result of honest human error, it's often a

case of unethical behavior on the part of a purveyor, their employees, or even your own receiving staff. Dont risk it: protect

your operation's interests by performing frequent spot checks. You might find you're being robbed blind!


Read: Skills of the Receiving Clerk

Training and experience are necessary for someone to do an effective job of receiving. Putting an untrained person, who

isn't familiar with the products being delivered, on the receiving floor is a recipe for disaster. The word will get back to the

supplier and the games will begin.


Tool: Receiving Report Form

Download the Tool

Receiving Report Form

The receiving report form verifies what came in and how it was distributed. Click the link on the right to download a

printer-friendly version of the report form.

Receiving Report Form

Receiving Clerk's Daily Report

#: Date: Clerk's Name:

Item Quantity Unit Unit Price Supplier Invoice Total Amount Distribution Sundries

Production Storage

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_receiving-report-form_01.pdf


Activity: Problems with Storage and Issuing

The storage system is not exciting, but its function is essential. Can you imagine what would happen if bank employees

recorded transactions only when they were in the mood? Like money in the bank, inventory at a restaurant needs to be

strictly controlled to avoid chaos in the kitchen and confusion in accounting The performance of your storage system

hinges on regularly scheduled equipment maintenance and on properly organizing product within your coolers and

freezers. Improper stacking can impede equipment from functioning correctly.

The economic impact of a properly functioning storage system is increased shelf life and reduced waste. The benefit to

your customer is healthy, safe food. Many health department inspectors will simply order the products in the cooler to be

thrown out if your coolers aren't maintaining the correct temperature.

If you have problems completing this activity, please consult the other resources in this section.Note:


Read: Functions of the Storage and Issuing System

Back-of-the-house systems may not be sexy, but they can make or break a foodservice operation. Every time your

operation loses a product because of deterioration or theft, not only do you lose the profit on that item, but what you paid

for it has to come out of your remaining profits. Storage and issuing are vital systems that help control cost and keep

production running smoothly.

This presentation describes seven storage and issuing system tasks and their related explanation. Select a task to read

more about it.


Watch: Packaging, Shelf Life, and Spoilage

You've got a lot of capital invested in perishable product. Extend the shelf life of your investment through proper packaging

and storage techniques.


Watch: Refrigeration Guidelines

Refrigeration and freezing are essential to all foodservice operations. Setting appropriate guidelines for storage conditions

and the length of time an item can be stored is one more way to establish standards and control product quality and

safety. Perishability can be delayed, but never prevented indefinitely. Pilferage is also a way product loss occurs, so

secure storage is essential.


Read: Evaluating the Effectiveness of Your Storage and Issuing Department

How long a product will keep depends on several factors, including the original quality of the product, how it is handled,

the storage temperature, and whether it's stored fresh, frozen, or cooked. Your storage and issuing staff should have a

thorough understanding of product shelf life to assure that quality is maintained during storage. Performing periodic

inspections of storage areas will allow you to determine whether they're clean and well-organized. Is the staff filling out

waste reports on items that deteriorate and need to be thrown out? Do random checks of physical inventory show that

counts are accurate?


Read: Storage Forms: ID Tags and Perpetual Inventory Sheet

Storage forms and tags are valuable tools for tracking information about products held in inventory. They identify the type

of product they're attached to, the date the product was issued to storage, and possibly other characteristics, such as its

weight and value. A storage control system, however, is only as good as the employees who maintain it. Properly utilized,

storage tags can provide information you need to take physical inventories, keep your stock rotating, and calculate food

costs; a blank tag provides no information at all.

Control of product in inventory is often simplified by the use of various forms, such as storage tags, issuing forms, and

inventory forms.

Storage Tags

Although forms are helpful, they themselves do not guarantee control over product. Storage tags are used to identify the

type of product they're attached to and the length of time the tagged item has been held in storage. Recording the storage

time is particularly critical in the case of high-priced meat items. With modern packaging systems, it is very difficult to

judge the length of time a product has been kept because the appearance of the product does not change appreciably;

slight changes that do occur generally cannot be seen under the lighting conditions of the normal walk-in cooler.

The simplest form of tagging is to date the case or container in which the product is stored. Along with this initial date, a

warning date might also be applied to signal the time by which the product should be used. Frozen products would have to

be used by this date, but fresh products suitable for freezing could be frozen to extend storage life.

A meat storage tag can be used to identify and date product. One advantage of using such a tag is that it states the value

of the product. A cardboard box simply labeled as "meat" may not be of as much concern as a box labeled "strip loins"

with a stated value of $432.

Usually, the storage tag is a two-part form. One part is sent to the person responsible for the food cost (accounting) when

the product is received. The second part remains on the product until it is issued for use, at which time the production

crew sends the other half to the controller to be cross-checked with the first part.


Meat Storage Tag

As a control device, the tag has a number of advantages:

It forces the person responsible for receiving to weigh each product.

It gives the individual responsible for storage a guideline as to how soon the product must be used and makes

stock rotation easier.

The tags can be the basis for physical inventories and for computing entrée food costs on a daily or weekly

basis.

In multi-unit operations, the tag tells the controller exactly where that product was issued, for proper cost

allocations.

Perpetual Inventory Form

Larger operations with full-time stewards might utilize a perpetual inventory form. This form lists items as they are received

from various purveyors, their unit and total value, and when and where they are issued. A running balance of product on

hand is kept to aid in the purchasing and inventory control.

Received Issued

Date Purveyor Qty. Unit Price Amt.

Issued Req. Balance

Date To No. Qty. Amt. Qty. Amt.


Activity: Problems with Production

Aside from the service system, no other foodservice function impacts the customer as directly as production. Its hard to

keep problems in the kitchen from spilling out to the dining room. The production system is where the skill and art of

cooking meet the requirements dictated for running a profitable business. Quality ingredients in the hands of an

experienced chef hold the promise of an enjoyable meal for your guests. But food isn't always prepared by highly trained

chefs, and restaurant meals aren't one-time creations. An excellent recipe must be reproducible. A reliable production

system turns out consistent, well-prepared dishes, meal period after meal period, even when the chef isn't present. To

accomplish this, guidelines must be clearly set so even newly hired staff can prepare meals that reliably meet customer

expectations within the projected food costs.

A properly functioning production system strikes a balance between quality, process, and speed. The kitchen will operate

more smoothly and efficiently and will experience fewer bottlenecks with a well-trained kitchen staff using standardized

recipes for food preparation. This type of work environment reduces stress and improves morale, which leads to greater

productivity. When run correctly, the production system allows the experience of your best chefs to be leveraged, and puts

order into a potentially chaotic environment.

Read these scenarios and see whether you can pinpoint which of the production tasks is falling through the cracks.

If you have trouble completing this activity, please consult the other resources in this section.Note:


Read: Functions of the Production System

Food production management combines the skill of culinary arts with the fundamentals of good business practices.

Management must hold the production area accountable for its role in maintaining standards and contributing to both the

consistency and profitability of the menu items served to customers. The functions of the production department clearly

show the important role it plays in the successful foodservice operation.

This presentation describes six production system tasks and their related explanation. Select a task to read more about it.


Watch: Recipe and Presentation Standardization

When the quality or presentation of a menu item varies from day-to-day, customers will start to complain. Use of

standardized recipes can alleviate many problems associated with the quality and consistency of your restaurant's menu

offerings, and can also speed up the training of new hires in the production area.


Read: Recipe Standardization Procedure

This document tells all you need to know about how to standardize your recipes, from deciding which recipes to

standardize to a step-by-step procedure committing the recipes to writing. It also contains tips on how to explode recipes,

and a chart listing the standard abbreviations for common weights and measures.

Preliminary Steps

The cooperation of the cook, chef, or anyone else involved in food preparation must be part of the program. You cannot

do this alone. Test a few recipes at a time--perhaps one a week over a year's time. Set up a taste panel, which also

involves employees other than cooks or chefs. With their help and suggestions, develop the recipe, specifications, and

cost of the food. Whenever possible, ingredients like chili sauce, soup, oil seasonings, and even flour should be ordered

by brand name. This will make a big difference in the finished product.

When increasing a recipe, keep in mind that this will entail equipment changes and changes in the method of preparation;

for example, the type of mixer with blade and speed, bowl size, pan size, and baking time will vary, and serving equipment

must be taken into consideration. Various types of mixers perform differently, so when increasing a cake recipe, a larger

mixer is required. The batter must cover the bottom of the mixing bowl for proper mixing.

NEVER increase a small quantity recipe without trying it. Weigh all dry ingredients. If a small quantity recipe is accepted,

increase it to approximately 25 portions--NEVER from, say, 8 to 300 portions; this would be a waste of money. The

increased recipe of approximately 25 must look and taste the same as the basic recipe, which was tested and accepted by

your taste panel. If the recipe for 25 is accepted, then increase it to 50, and then to 100 portions if the 50-portion recipe

was accepted. Each time a recipe is increased, check appearance, palatability, and portion size with the original recipe.

Each ingredient CAN be built up proportionately, if done accurately. ALL INGREDIENTS an ounce or over are expressed

in weight. Any ingredient less than a pound is expressed in ounces; for example, 12 oz. but not ¾ lb., 1 lb. 8 oz. but not

1½ lb. Liquids are expressed in cups, ½ quarts, quarts, or gallons.

Each accepted recipe should also have a cost card. There must be a master recipe file of recipes and cost cards. All

department heads should have recipe files of their own, to be used in their particular departments. A 5" x 8" or 6" x 8" card

is preferred. Always begin and end a recipe on one side of the card. Variations may be put on the back.

Procedure for Writing Large Quantity Recipes

There are several methods of writing recipes for large quantities. The following rules may be applied to all methods.


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Formats may vary, but the procedures for writing a recipe remain the same. Once a format has been decided on, always

use the same format--to change will be confusing to your employees:

Weights and Measures

Abbreviations

Teaspoon tsp.

Tablespoon Tbsp.

Cup c.

Quart qt.

Pint pt.

Gallon gal.

Pound* lb.

Fahrenheit F.

Centigrade C.

As Purchased A.P.

Edible Portion E.P.

Number #

*Industry sometimes used "#" as an

abbreviation for pound, but it is confusing

as it is also used as an abbreviation for

number.

Place the name of the product in the center of the card or sheet -- .preferably capitalized

The classification may be included in the top-right corner (e.g., Entrée: Fish).

Change all ingredients to weights, with the exception liquids.

Place the yield (number of servings) and perhaps the portion size in the upper-left corner. The portion size may

be given in weight or measure (or both), depending on the product or equipment.

Specify the type of pan below the yield. When necessary for clarity, include the measurement as 15" x 10" x 2"

(length x width x depth). Give the largest measurement first. Capitalize the first letter of ield and an. It mayY P

also be helpful to give .the total batch weight or volume

Place the temperature in Fahrenheit or Centigrade in the upper-right corner with the baking time below. The

symbol for degrees (º) is not used (e.g., 325 F). Abbreviate and capitalize the first letter of emp., ime, r., and T T H

in.M

List the ingredients in the order of their use list meat first (usually preparation is needed).except meat recipes:

Capitalize the first letter of each ingredient and capitalize brand names. The amounts of the ingredients are

abbreviated to save space. (See correct abbreviations in Weights and Measures below.) If the ingredient listed

takes more than one line, indent the second line one or two letters, so it can be distinguished as part of the

above ingredients. The first word in the ingredient column should be the food such as , loin; , brown; Pork Sugar


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8.

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2.

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22.

, vegetable not Brown sugar or Vegetable oil. Sugar means granulated; flour means all-purpose; paprikaOil

means Spanish. If others are used, describe them, for example, Sugar, brown; Flour, cake; and Paprika,

Hungarian. When possible, give both weights and measures, as some small restaurants may not have scales.

Weights are more accurate than measures though. If indicating an ounce or more, express the value in weight. If

the weight is under a pound or kilo, express it in ounces or grams (e.g., 12 oz., not ¾ pound).

Use only weights or measurements for which there are exact measuring tools. Do not use 1/8 pound, 1/8 cup,

2/3 tablespoon, 1/5 cup, and so on. State as ounces, pounds, teaspoons, or tablespoons; for example, ½ quart

rather than 2 cups, ¾ quart rather than 3 cups, 1 quart + 1 cup, or 1 ¼ qt. Under 1 pound--use ounces.

When an ingredient is used more than once in a recipe, such as sugar, flour, or cream, this can be clarified in

various ways:

1 cup (1); later on state ½ cup sugar (2) OR

1½ cups sugar listed in the ingredients. In the procedure, state: add 1 cup of the sugar; later on state: add

the remaining ½ cup of sugar.

When a small quantity recipe is increased, the spices are increased proportionately. (This does not apply to

frozen products.) Large quantity recipes such as meats, vegetables, sauces, and soups, should be concluded by

saying, "adjust seasonings."

Use descriptive terms, such as shredded, cut, sifted, or chopped. If descriptive terms are included in the list of

ingredients, they in the preparations procedure (e.g., milk, scalded).need not be repeated

When necessary for clarity, specify the type and/or brand name of the ingredients to be used, for example,

Cheese, Kraft's Blue; baking powder, tartrate; cream, 36%.

Use applicable terminology in the procedure like cream, fold, blend, season, scald, chill until syrupy, and beat

until foams.

Use as few steps a possible in the preparation directions. . Steps may beLeave a space between each step

numbered, but is preferred because this takes up too much needed space for theno number between steps

method. Abbreviate words like hr., min., sec., dia., in the method to save space.

Simplify procedures so as to use a MINIMUM of utensils.

Give directions for special handling of ingredients--list special precautions. Mixing speeds and type of beater and

length of mixing are very important. This will vary with each type of equipment used. Describe what needs to be

done with the cooking equipment (e.g., greasing or flouring).

Begin and end the ENTIRE RECIPE on one side of the card or page. Variations may be put on back. Use of 5" x

8" or 6" x 8" cards is recommended--none smaller. Different colored cards may be used for rolls, cookies, cream

puffs, and so on.

Repeat the temperature and time in the method, such as bake at 350 F. 1 hr.

Weigh pan and scale product into the pan. Pan weights vary.

State the serving portion in ounces or ladle. Give the type of serving dish, if using something other than a dinner

plate. Garnish suggestions are also helpful.

List directions, garnishes, and accompaniments for serving (size or number of scoop) weight or size: 4" x 3"

squares.

Place note variations, and so on, at the bottom so the worker doesn't get confused.

Methods of Converting Standardized Recipes


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2.

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2.

3.

4.

The fraction method:

To convert total yield:

Divide the desired yield by the recipe yield:

New yield / old yield = conversion factor

Multiply each ingredient quantity by the conversion factor:

Conversion factor x old quantity = new quantity

In order to do this in the U.S. system, you will usually have to convert all weights to ounces and all volumes to

fluid ounces. (This in not necessary in the metric system.)

To change portion sizes:

Determine the total yield of the recipe by multiplying the number of portions by the portion size:

Portions x portion size = total yield (old)

Determine the total yield you desire by multiplying the desired number of portions by the portion size:

Desired portions x desired portion size = total yield (new)

Divide desired yield by recipe yield to get the conversion factor:

Total yield (new) / total yield (old) = conversion factor

Multiply each ingredient by the conversion factor

Conversion factor x old quantity = new quantity


Read: Houston's: A Case Study in Quality and Consistency

A good foodservice operation tests recipes, develops menu items, and periodically checks finished products for

consistency. Houston's is so dedicated to quality that they prepare and taste each menu item, including condiments and

salad dressings, every day. No wonder customers are willing to wait an hour for a table!

Houston's in San Francisco is a bustling American grill, part of a chain of restaurants reaching from Los Angeles to

Boston. The menu features a cuisine of distinctively straight-forward, made-from-scratch, American favorites. When

looking for great food, in a great atmosphere, at a great price, Houston's is a top pick for patrons in the Bay area. Course

instructor Steve Mutkoski recently toured Houston's late one afternoon as the staff prepared for the dinner crowd. Making

the rounds of the various foodservice departments, he was impressed by the professionalism of Houston's highly trained

and courteous employees, but his favorite stop was the kitchen, where the Chef Ethan Ashcraft introduced him to what

they call the "taste plate." Armed with an appetite and several dozen spoons, Chef Ethan, the kitchen manager, the

general manager, and any other staff members who care to join them, spend the better part of an hour each day tasting all

items from the menu to ensure that the food is up to spec, and to give them time to adjust items that aren't up to par. And

they don't just sample the features: they start with the soups, move through salad dressings, dipping sauces, side items,

and dessert, and twice a week, they test the grilled meat and fish--items the chef prepares personally each day.

On this particular afternoon, the first item to slide onto the tasting counter is the Firehouse Chili, made with grilled sirloin,

beans, and topped with cheddar cheese and onions. On deck, waiting to be sampled, are 12 ramekins of salad dressing,

including Caesar, Honey Lime, Thai, Mustard Honey, Thousand Island, Chef's dressing, and Caramelized Garlic--all made

fresh daily. To prevent taste clashes, Chef Ethan plucks a clean spoon from the bin between each item, in addition to

cleansing his palate with a sip of water. He maintains a continuous monologue throughout the tasting, describing how

each item is prepared, what it might be paired with, and the criteria used to select the raw ingredients. For example, Steve

learned that to control the consistency and freshness of their tortilla strips, they fry their own product in house every day.

In order to taste what the patron tastes, the group of testers dip the tortilla strips in the assortment of five dipping sauces

featured on the menu. Next out: couscous--all nine varieties offered as a side item.

French fries, Chef Ethan explains, are the hardest item to keep consistent: new crop, old crop, and mislabeled place of

origin are among the many variables that are constantly changing. So they switch potatoes whenever needed and vary the

cooking time--one day 45 seconds, the next a minute and a half--to achieve the desired result. And then the oil changes!

To maintain shape and monitor quality, they cut their fries with a hand slammer, not with a machine.

A bowl of fresh, richly colored field greens appears. They toss the greens themselves, from cases of different varieties

they mix to their specific proportions. On to the vegetable platter, the vegetarian black beans with brown rice cooked in


vegetable stock (all stocks are created in house, of course), a parade of sandwich toppings, and their famous spinach,

prepared with a cream sauce and artichokes, and served with tortilla chips.

The meat, fish, and poultry are a feast for the eyes as well as the palate. Salmon that Steve claims "literally melts in your

mouth," pork chops "like I've never seen," brined for 2 to 3 days and then slow roasted in the oven before grilling. The

brining cooks it, leaving the meat incredibly moist with a delicate pink hue that some customers find disconcerting, so Chef

Ethan has his servers take the time to educate guests on the safety and superiority of this cooking method. The fillet is

certified Prime Angus, aged in house for a full 21 to 25 days, and so tender you can almost cut it with a spoon. Hamburger

is made from rounds of chuck they purchase every day and grind at their own facility. Chicken tenders are deep fried in

Houston's own delicate batter, which resembles tempura.

And the desserts... pure torture!

As part of their thorough training regimen, serving staff at Houston's must attend 5 to 6 taste-plate sessions to become

familiar with the cuisine. When training is complete, they're tested on their knowledge of the menu items; to pass and be

allowed on the floor interfacing with customers, an employee must be able to speak knowledgeably about each menu

offering to the chef's satisfaction.


Read: Evaluating the Effectiveness of the Production Department

The following suggestions can give managers a better understanding of how their production system is functioning and

what it contributes to the operation.

Observe some aspects of production daily.

Look for bottlenecks or inefficiencies and work with the team to reduce them.

Require each section of the production department to file a daily waste report to track excess ordering.

Require each section of the production department to file a leftover report to track overproduction.

Require a customer-return report log indicating the reason for the items rejection; indicate overcooking, over

seasoning, toughness, and so on.

Require a yield or number-of-portions report on roast items such as prime rib, top sirloin, leg of lamb, and crown

roast of pork.

Periodically conduct an inspection of the set up rooms and mise en place.

Periodically observe at the expediter station to see whether the portions and presentation standards are being

met.

Participate often in taste-plate sessions to reevaluate all foods on the menu.

Review daily POS system information to track the number of covers produced by the kitchen during each hour of

operation.

Review total sales and sales-mix reports to see whether any section of the kitchen is over- or understaffed.

Review daily and weekly food-cost reports.


Tool: Three-Part Menu Item Planning Guide

Download the Tool

Three-Part Menu Planning Guide

This downloadable, three-part menu planning guide is a tool designed for the menu planner to ensure that recipes,

equipment, cost, and purchasing data are recorded. It provides management information on which to build the total menu

plan. The parts of the menu planning guide are the production standards planner, the standardized recipe (presented in

the resource titled "Recipe and Presentation Standardization") and the pre-cost entrée calculation form.

https://d31owemgwclw9w.cloudfront.net/content/SHA/SHA508/sha508_157_form_en-us.pdf


Module Introduction: Control and Management Systems

This module explores the functions of management and looks at the stages foodservice managers grow through as they

progress from assistant managers to unit managers and finally to multi-unit managers. The Leasing vs. Operating case

introduces the perspective of different levels of management, and gives you the opportunity to put yourself into several

management roles and react to different proposals provided in the case. You also look at various devices such as

schedules, forecasts, and operational statements managers use to guide their operations and monitor the effectiveness of

each of the other foodservice systems.

How does loss typically occur in a foodservice operation? This module explores the causes of loss and covers the

techniques the control system can use to prevent loss from happening. Evaluating the effectiveness of the control system

is also discussed.

After completing this module, you will be able to:

Identify the function and components of the foodservice control system, and assess its effectiveness.

Identify the function and components of the foodservice management system, and assess its effectiveness.


Read: The Control System

Control systems arise in response to problems that exist in a foodservice organization. They come in two types. The first

kind of control system alerts management when a problem occurs somewhere in the operation, serving as a tripwire that is

activated at the point and time a loss originates. The second type of control system is usually put in place as a preventive

measure to discourage problems from occurring.

Every system within the foodservice operation needs a set of standard operating procedures to guide it and to control

outcomes. The control system helps managers assess to what extent the actual results compare to the forecasted results.

There are many ways to control potential avenues of loss, such as a lock for your storage area to reduce opportunities for

theft, or a new computer system shared by purchasing and receiving. Carefully crafted controls should help the operation

run more smoothly, but not be so cumbersome that they hinder the operations ability to function properly.

It is essential that management assess all areas and put the resources where they're needed most. A control system is

only worthwhile if it doesn't create new problems while attempting to cure other ills. For example, what is the value of a

system designed to eliminate $500 worth of loss per month if the system itself costs $1200 a month? You might be better

off with a different solution.

Periodically checking the performance of these systems is necessary to measure their effectiveness. Random audits,

showing up unexpectedly, and conducting surveys, all help monitor and improve the control system. One thing is for sure:

when you implement a control, someone will try to beat it or find a shortcut around it.


Activity: Losing Control

This scenario covers a few of the common causes of loss to an operation. See if you can suggest a control that would

minimize the risk of each type of loss recurring.


Read: Functions of the Control System

Standard operating procedures (SOPs) are the building blocks of every system. The control system is in place to help

management monitor how effectively each system is functioning and whether it's adhering to the established SOPs. The

control system functions to keep the operation on target and to identify problems when a system doesn't function properly.

This presentation describes five control system tasks and their related explanation. Select a task to read more about it.


Watch: Control System Considerations

Control is often viewed as something you impose on employees. In truth, it should be a way of helping them excel in their

jobs through expert guidance. Every system needs some level of control to function properly; how much depends on the

system. When controls are not in place, losses occur.


Ask The Expert: Control Systems

These experts point to several reasons for loss in a foodservice operation, from waste caused by overproduction and

ordering products you can't use, to theft of actual sales and product. Hear what advice they give for controlling loss. A

simple solution is to walk around and keep your eyes open. For a more integrated approach, listen to John Zillmer's

testimony of how their Eight Steps system, which controls food production processes from receiving to leftover utilization,

has reduced loss and reaped a 3% to 4% reduction in food cost for certain ARAMARK locations.


Read: Evaluating the Performance of Your Control System

Managers rely on daily, weekly, and monthly reports to gauge performance. While the reports may indicate the existence

of a problem, they will not pinpoint the problem itself. Spot checking the system is a necessity. Random audits, showing

up unexpectedly, and conducting surveys, all help monitor and improve the control system.

There are four basic techniques used to evaluate the control system. In smaller operations, the manager may be

performing the control functions as well as evaluating their effectiveness.

Accounting and Financial Analysis

Reviewing budgets, labor schedules, sales forecasts, P&L statements, and operating ratios are all ways of monitoring the

effectiveness of the operation and the overall control system. If forecasted and actual results are in line, and customer

satisfaction remains high, then the systems and controls are functioning properly. If there is a significant discrepancy, it

could mean that the control system did not pick up the problem soon enough for the manager to make the necessary

adjustments. For example, if food cost for your fine-dining restaurant was budgeted at 35%, but the actual cost came in at

30%, this might look good at first. The reality may be that the guests were served lower quality product or smaller portions,

which may well have diminished the perceived value of the experience. The lowered standards should have been picked

up by the control system long before the monthly statement came out.

Internal Audits

The control system manager should conduct the following types of internal reviews or audits on a random basis:

Invoice audits to recheck the product that was received and accepted by the receiving clerk

Guest check audits to make sure servers and bartenders are correctly recording everything served

Random cash-drawer audits to check on cashiers and bartenders

Inventory audits to verify the accuracy of information previously recorded

Service audits to monitor service level and service standards

All of these audit-like activities reinforce the standard operating procedures that employees should be following.

Management should review the numbers and the results of these activities when evaluating the effectiveness of the

control system.


Observation

The control system manager should be physically present throughout the operation and periodically observe the work of

employees in different departments to monitor effectiveness and efficiency. Spotters and silent shoppers can also be

employed by the control system to observe and report on employee performance and activity levels. Examining the

number of reports generated and the actions taken on them is another way to judge the effectiveness of the control

system.

Survey Method

The control system manager can conduct surveys of guest satisfaction and employee satisfaction, and conduct exit

interviews to monitor qualitative issues. These surveys are actually a control to monitor the effectiveness of both the

overall operation and specific systems such as production, service, and human resources. While surveys like these may

be more qualitative in nature than an accounting ratio, they can provide essential information for the manager to redirect

systems.


Read: he Management SystemT

Managing a restaurant business is not a relaxing profession, and is certainly not a hobby--a notion many people in other

occupations seem to hold as true. Entrepreneurs naive enough to open a restaurant with no previous exposure quickly

discover first hand that the business is fiercely competitive and best suited to experienced professionals.

Being a restaurant manager is demanding precisely because it entails working in a high-pressure, hands-on environment,

while at the same time standing back to take in the big picture. A good manager is not just another set of hands to fill in

where needed, although the person will have gained insight from working up through the ranks and seeing the operation

from all angles. A professional manager focuses on results; by delegating day-to-day operations, the manager can be

present to assure quality of service and product, keep costs on track, and strive always to guarantee the satisfaction of

both customers and staff.

This section focuses on the management system's role as the overseer of all other systems. The management system

plots both the long- and short-term direction of the operation; it sets and monitors business and financial goals, manages

assets and assigns resources, positions the enterprise as a positive force in the community, and tracks trends in the

marketplace. It provides leadership to the entire operation and motivates employees to keep on track and be their most

productive.


Read: Leasing vs. Operating

Key Points

"It was well understood that the decision to enter into leased operations would ultimately have a direct effect at the

individual property level bottom line. It would also have an impact on Majestic Hotel Corporation's long-term operating

profits. Bilder believed that the first GM who succeeded in showing positive results from the lease of his restaurants could

command a place in the company spotlight for quite some time."

by Christopher C. Muller, School of"Leasing vs. Operating Hotel Food & Beverage Outlets The Majestic Hotels Corporation"

Hospitality Administration, Boston University, and Derek McCann, General Manager at Loews Ventana Canyon Resort.

This lease case is rich with information to be analyzed from a managerial perspective. It moves beyond managing a single

system or food and beverage outlet to managing the assets of an entire property. In addition, the case indicates how the

management decisions made at one property can have a significant impact on the reputation and assets of the entire

chain of properties. As you read this case, put yourself into the various managerial positions and realize the different

perspectives that each player brings to the organization.

Once you've familiarized yourself with the case, you can continue going through the rest of the activities in this section or

go directly to the self-assessment "Resolution of Leasing vs. Operating."

View the article

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_221_lsoprtcase_en-us.pdf


Read: Functions of the Management System

The management system functions as the overarching system that guides a business toward achievement of its goals.

Management creates the business entity and the business plan. The management staff develops, monitors, and controls

all other systems in the organization. In a multi-unit hotel or restaurant chain, several of the functions of the management

system are divided between corporate management and unit management.

This presentation describes ten management system tasks and their related explanation. Select a task to read more about

it.


Read: Classical Management Processes

Effective managers allocate appropriate amounts of time for planning, organizing, directing, and controlling. How do you

spend your time on these managerial functions? If you're devoting a lot of time to directing and controlling, it may be

because you didn't invest enough time up front in planning and organizing.

This presentation provides information on the value of planning and organizing up front in order to balance the amount of

controlling and directing you will need in the long-term.


Watch: Development of a Foodservice Manager

This presentation was extracted from a seminar given by Bruce Raterink, director of training for Carl's Jr. Restaurants,

during the National Restaurant Association Restaurant Show in Chicago. Mr. Raterink uses the analogy of a firefighter to

describe the stages of development of a foodservice manager. His descriptions of the foodservice manager's activities and

focus at different stages of development are excellent and insightful. After reading the descriptions, think about how you

spend your time and what your daily activities are. Knowing where you are in the progression may help you work toward

the next stage and on to the professional manager level.

is a chart that describes how a foodservice manager mostThe Move Towards Independence: A Development Process

likely approaches planning, organizing, leading, controlling, motivating, and staffing activities at each of the six stages of

development.

https://d31owemgwclw9w.cloudfront.net/content/SHA/SHA508/sha508_224_mmgtstages_en-us.pdf


Ask The Expert: The Management System

Experts in the field describe the long journey a person must travel to become a general manager of a foodservice

operation and give the traits they look for in the ideal candidate; among them, a strong work ethic, intelligence, leadership,

compassion for the business and for people, a sense of style, high standards, resourcefulness and courage, energy and

enthusiasm, and of course, exceptional communication skills.


Read: Making the Transition from Single to Multi-Unit Fast-ServiceManagement

Key Points

"Simply put, once the single-unit manager has made the move to multi-unit management, he or she is no longer directly

responsible for the outcomes of the single unit operation; rather, in an indirect manner, the multi-unit manager is

responsible for the multiple organizational outcomes of each of the units under his or her jurisdiction and must change

management styles accordingly."

"Making the Transition from Single-Unit to Multi-Unit Fast-Service Management: What Are the Requisite Skills and Educational

by Mark A. Mone and W. Terry Umbreit, Hotel and Restaurant Administration, Washington State University.Needs?"

This article analyzes what it takes to profitably monitor several geographically dispersed fast-service operations by

compiling the survey responses of 164 district, area, and regional managers.

View the article

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_making_transition_en-us.pdf


Read: Attentional and Interpersonal Characteristics

Key Points

"What qualities are required of successful managers in busy, upscale restaurants? They seem to need the street sense of

a circus ringmaster, significant planning ability, and the capacity to take action guided by their plans and their awareness.

Furthermore, they must interact well with their staff and guests while being able to work alone on behind-the-scenes

matters."

by"Attentional and Interpersonal Characteristics of Restaurant General Managers in Comparison With Other Groups of Interest"

Robin W. Pratt, Department of Organizational Studies, University of San Francisco and David L. Whitney, Central

Michigan University.

What group of highly confident, extroverted professionals possesses the competitive nature of an Olympic athlete, the

discipline of a Navy SEAL, and the concentration of an air traffic controller? Why, top-performing general managers of

busy, upscale restaurants, that's who. This study used the Test of Attentional & Interpersonal Style (TAIS) to identify the

leadership qualities common among successful GMs, and compared these traits to those reported by other successful

business leaders and top sales people, as well to the profiles of other industry groups.

View the article

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_AttentCharacter_en-us.pdf


Read: Management Tools for Financial Analysis

Key Points

The volume forecast helps managers develop a staffing schedule and order products.

Budgets and income statements help managers focus on financial results and goals.

Managers live and die by forecasts, budgets, schedules, and operating statements. These managerial tools help

managers to keep their operations running smoothly and to control financial outcomes. Without these tools, the business

outcome would be left to chance, which is never a good thing in any business.

Volume Forecast

The volume forecast is used by management to develop a staffing schedule and purchase orders to obtain needed

products. This forecast is built off historical information, reservation data, and knowledge of current events that could

affect volume.

Staffing Schedule

A staffing schedule is developed from the budget and forecast. The staffing schedule provides management with a

snapshot of operational coverage every day of the week. If new business is booked for a banquet or reservations are

higher than normal, the manager knows who is available to call in. The schedule also gives employees a better lifestyle by

providing them with a regular work schedule and consistent days off. .See a sample of a month-to-month staffing schedule

Budgets

Budgets help keep the operation on track to meet the financial goals. This example of a payroll budget was developed

based on the forecast of volume for this time period. The budget makes sure adequate labor is available to meet the

demand while keeping labor costs at the appropriate level.

https://d31owemgwclw9w.cloudfront.net/content/SHA/SHA508/sha508_228_schedule_en-us.pdf


Download a printable version of this budget

Income Statements

Managers look at income statements and various ratios to judge the effectiveness of their operations and to take

corrective action. The following table shows the operating percentages for seven different types of restaurants. Note the

variation in the mix of sales and the variation in food cost, payroll cost, occupancy cost, and so on. The combination of

food cost percentage and labor cost percentage (prime cost) is an example of an important indicator of a business focus

and potential profitability. A description of the restaurant types is provided below the table.

1 2 3 4 5 6 7

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_228_budget_en-us.pdf


SALES

Food 85.0% 100.0% 95.0% 100.0% 77.0% 65.0% 91.0%

Beverages 15.0% 5.0% (3) 23.0% 35.0% 9.0%

Total sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

COST OF SALES

Food 45.0% 34.0% 31.6% 42.0% (1) 45.5% 42.0% 35.0%

Beverages 30.0% 23.0% 23.0% 33.0% 28.0%

Total cost of sales 42.8% 34.0% 29.0% 42.0% 40.3% 38.9% 34.4%

GROSS PROFIT

Food

Beverages

Net sales 57.2% 66.0% 71.0% 58.0% 59.7% 61.1% 65.6%

OPERATING EXPENSES

Payroll/related expenses 20.0% 30.0% 36.0% 19.0% 34.0% 38.0% 38.5%

Advertising/promotion 2.0% 0.5% 3.0% 3.0% 2.5% 1.1% 1.5%

Franchise fee 4.0%


1.

2.

3.

4.

Other operating expenses 9.0% 10.2% (1) 10.0% 9.0% 8.5% 13.0% 11.0%

Total operating expenses 31.0% 49.0% 35.0% 45.0% 52.1% 51.0%

Profit before occupancy 26.3% 25.3% 24.0% 23.0% 14.7% 9.1% 14.6%

OCCUPANCY COSTS

Rent (2) 15.0% 5.0% 8.0% 4.5%

Real Estate Taxes (2) 1.0% 1.3% 1.5%

Depreciation 2.5% 3.9% 4.3% 2.2% 2.6% 3.5% 3.5%

Insurance 0.3% 0.4% 0.4% 0.6% 0.3% 0.5% 1.0%

Total occupancy costs 3.8% 19.3% 9.7% 10.8% 4.2% 5.5% 9.0%

Profit before corp. OH, interest, & income taxes (2)

22.5% 6.0% 14.3% 12.2% 10.5% 3.6% 5.6%

Types of Restaurants

This is a steakhouse operation (part of a multi-unit chain) that operates with a relatively high food cost 45%

(which provides customer value), but they are able to run at a relatively low labor cost (20%) because of high

volume and short service cycle time. This produces a prime cost of 65% and gives this operation a 26.3% profit

before occupancy, taxes, and insurance.

This is a downtown coffee shop that achieves a prime cost of 64% (34% + 30%) and a profit of 25.3% before

occupancy, taxes, and insurance. Unfortunately, the city location makes rent a high 15% of sales, which

significantly decreases the profit.

This is an office building foodservice operation that achieves a relatively low food cost of 31.6% and a 36% labor

cost for a 67.6% prime cost. This operation shows a 24% profit before occupancy, taxes, and insurance.

This is a quick-service restaurant that achieves a 42% food cost (this includes paper supplies) and a low 19%

labor cost to produce a prime cost of 61%. This operation shows a 23% profit before occupancy, taxes, and


4.

5.

6.

7.

insurance.

This is a large, independent, specialty restaurant that operates at a relatively high prime cost of 79.5% (45.5%

FC + 34% LC). While this operation shows a 14.7% profit before occupancy, taxes, and insurance, a significant

portion of that is the result of the 23% beverage sales.

This is a small, fine-dining restaurant that operates at a prime cost of 80% (42% FC + 38 % LC). This operation

also has higher other operating costs than the other restaurants because of the higher quality and costs for

things like its china, glass, and silver. The operation produces a slim 9.1% profit before occupancy, taxes, and

insurance, even with 35% of the sales coming from beverages.

This is a mid-scale, family restaurant (part of a multi-unit chain) that achieves a prime cost of 73.5% (35% FC +

38.5% LC) and shows a 14.6% profit before occupancy, taxes, and insurance.

If you operate a foodservice operation similar to one the seven shown above, compare your percentages to theirs.


Activity: Resolution of Leasing vs. Operating

Read over the case study once from start to finish, then go back to the specific proposals and"Leasing vs. Operating"

consider the individual points. As you read each proposal, consider whether it fits the corporate image and strategy. Then

consider whether it fits the property image and serves the client base appropriately. From the information provided in the

case, consider the positive and negative sides of each proposal. Think about the possible outcomes if a proposal were

implemented.

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_221_lsoprtcase_en-us.pdf


Click Play to Listen

Stephen Mutkoski Professor of Wine Education & Management

School of Hotel Administration, Cornell University

Listen: Thank You and Farewell

Hello. I'm Professor Mutkoski. Thanks for taking this course. I enjoyed writing it, because I believe it covers some of the

most essential aspects of foodservice management.

Identifying the functions and components to the purchasing, receiving, storage and issuing, production, control, and

management systems are the cornerstones to your foodservice management knowledge. I hope you found the real-life

examples and articles instructive and meaningful in presenting the topics addressed. Mastering these systems is the

foundation to your success as a professional foodservice manager.

I hope you enjoyed the course, and that you personally benefited from the material presented. Good luck with your career

in foodservice management.


Stay Connected


Supplemental Reading List

The provides focused whitepapers and reports based on cutting-edge research.Center for Hospitality Research

Articles:

"Making the Transition from Single-Unit to Multi-Unit Fast-Service Management: What Are the Requisite Skills and

Educational Needs?"

by Mark A. Mone and W. Terry Umbreit, Hotel and Restaurant Administration, Washington State University

This article analyzes what it takes to profitably monitor several geographically dispersed fast-service operations by

compiling the survey responses of 164 district, area, and regional managers.

"Attentional and Interpersonal Characteristics of Restaurant General Managers in Comparison With Other Groups of Interest"

by Robin W. Pratt, Department of Organizational Studies, University of San Francisco and David L. Whitney, Central

Michigan University

What group of highly confident, extroverted professionals possesses the competitive nature of an olympic athlete, the

discipline of a Navy SEAL, and the concentration of an air traffic controller? Why, top-performing general managers

of busy, upscale restaurants, that's who. This study used the Test of Attentional & Interpersonal Style (TAIS) to

identify the leadership qualities common among successful GMs, and compared these traits to those reported by

other successful business leaders and top sales people, as well to the profiles of other industry groups.

Utilities:

"Specification Sheet Form"

This utility provides specification templates that can be modified for your operation.

"Evaluating the Effectiveness of Your Purchasing Department"

This is a checklist for evaluating your purchasing department.

"Rating Your Suppliers"

It is important to have a standard of reference to use when evaluating suppliers. This form covers the major concerns

of most operations. Changing the weight associated with each category makes this form useful for all types of

foodservice operations. Decide what is most important to your operation and recalibrate the rating accordingly.

"Sample Letter of Intent"

Setting the correct tone for the buyer-seller relationship is important. If you don't establish ground rules from the

outset, there won't be any and you'll be forced to spend more time trying to correct the situation down the road. Do it

the right way from the start, then maintain that standard.

"Receiving Report Form"

The receiving report form verifies what came in and how it was distributed.

"Storage Forms: ID Tags and Perpetual Inventory Sheet"

http://www.hotelschool.cornell.edu/research/chr/



https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_AttentCharacter_en-us.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_specification-sheet-form_01.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_evalpurchasing_en-us.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_ratingsuppliers_en-us.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_letter_en-us.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_receiving-report-form_01.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_ratingsuppliers_en-us.pdf


Storage forms and tags are valuable tools for tracking information about products held in inventory. They identify the

type of product they're attached to, the date the product was issued to storage, and possibly other characteristics,

such as its weight and value. A storage control system, however, is only as good as the employees who maintain it.

Properly utilized, storage tags can provide information you need to take physical inventories, keep your stock

rotating, and calculate food costs; a blank tag provides no information at all.

"Evaluating the Effectiveness of the Production Department"

These suggestions can give managers a better understanding of how their production system is functioning and what

it contributes to the operation.

"Three-Part Menu Item Planning Guide"

The three-part menu planning guide is a tool designed for the menu planner to ensure that recipes, equipment, cost,

and purchasing data are recorded. It provides management information on which to build the total menu plan. The

parts of the menu planning guide are the production standards planner, the standardized recipe (presented in the

resource titled "Recipe and Presentation Standardization") and the pre-cost entrée calculation form.

"Evaluating the Performance of Your Control System"

Managers rely on daily, weekly, and monthly reports to gauge performance. While the reports may indicate the

existence of a problem, they will not pinpoint the problem itself. Spot checking the system is a necessity. Random

audits, showing up unexpectedly, and conducting surveys, all help monitor and improve the control system.

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_evalprodsys_en-us.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_planningguide_en-us.pdf

https://s3.amazonaws.com/ecornell/content/SHA/SHA508/sha508_993_evalcontrolsys_en-us.pdf

sha508: foodservice management: control systems and ... · explain the value of foodservice...

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