As restaurants expand to multiple locations, the challenges operators face increase exponentially.
They need to maintain consistency, provide excellent customer experience and optimise performance across a growing number of locations. Meanwhile, the market keeps changing at the speed of light.
Some business leaders navigate those challenges noticeably better than others.
In this article, I explore what high performers do differently from low performers to achieve operational excellence.
OpEx refers to the practice of optimising operational processes to improve efficiency, reduce costs, and enhance the customer experience. A study found there are six drivers for operational excellence in F&B-driven organisations.
They are:
If you are familiar with the restaurant industry, you won’t be surprised to see cost savings at the top of the list. You will also understand that the challenge for restaurant leaders to keep those costs under control is enormous.
A single restaurant is already difficult to manage, let alone having dozens of locations in your portfolio. Every new unit adds another layer of complexity to an already complex organisation. There are so many moving parts that working in chaos is the default work setting for many food service companies.
Operational Excellence aims to reduce costs, maximise productivity, and improve product quality.
I was left with the question: why do some companies rise above the chaos, and how do they improve their operations and business?
What are industry leaders doing differently from followers?
As CEO of Apicbase, and host of The Food Service Growth Show, I talk with restaurant leaders daily. These experiences have given me great insight into how high-performing restaurant leaders manage operations.
They aren’t superheroes doing superhuman things. What I found is that their approach to operational excellence is vastly better.
The path to operational excellence requires strategic planning, focused execution, and continuous improvement. There are countless ways to meet the challenge, but the most successful restaurant companies focus their approach on the following six components.
The first step is to get control of the production data.
Organisations looking to improve efficiency all start with that, which makes sense if you think about it. It’s hard to improve something if you don’t know where to look.
The best decisions are based on data analysis and solid information, not gut feeling or speculation. At least in a business environment, I find this to be true.
When I ask prospects why they are looking for a solution like Apicbase, they usually answer: ‘I need to know what is going on’.
These organisations often scale, resulting in a loss of control and chaos. Top performers know that. It puts data capture high on their agenda.
Compared to followers, leaders are more aware that they cannot manage activities effectively if they do not measure them. Therefore, they take more care in setting up systems to monitor data.
What does it mean for restaurant leaders to get control over their operational data?
Control over operation data means three things:
What sets high performers apart from others is automated data collection.
Automation makes it easier to gather accurate data, use historical data more efficiently and provide actionable insights to decision-makers. When data is collected manually, the information tends to be outdated and incorrect, which calls into question the usefulness of the data.
Operators automating data collection often have restaurant analytics software running in parallel, converting information into insight. It allows them to make decisions faster and correct errors before they spiral out of control. This approach increases the reliability of the internal processes.
Equally important, top performers in the restaurant industry go to great lengths to ensure that data capture is standardised group-wide, especially large enterprise organisations with sites in multiple locations.
This is crucial for informed decision-making. For example, if one location uses a different method for calculating par-levels, the group data becomes less reliable. You learn nothing essential from comparing apples and pears, except that they are round.
With a uniform understanding of how operations are performing across locations, executives can proactively address any shortcomings and identify areas for improvement.
Get real-time feedback about your restaurants’ inventory, procurement and menu performance in dynamic charts, graphs and dashboards.
A consistent performance measurement framework, allows large-scale foodservice corporations to optimise their operations and maximise their competitive advantage.
Access to operational data is crucial, but not enough. Actionable intelligence is what matters most.
High-performing restaurants have access to insights that can be directly applied to decision-making processes. They analyse past performance and compare it to the present, which helps them to make informed choices. It helps to improve F&B workflows and become a more efficient operation.
For instance, high-performers track recipe profitability over time. They can intervene if a dish isn’t making enough money now but used to do well. They might raise the price, change the recipe, or deal with a supplier not following price agreements.
Recipe performance is just one example. The bottom line is that high-performing restaurant leaders check whether all critical aspects of their locations function optimally and whether maintenance is needed.
It is important to note that these companies have real-time access to such insights. It allows them to react when problems arise and not months later when an accountant discovers an error, if ever found.
Compared to high performers, followers are more likely to swallow considerable profit losses because small hidden inefficiencies accumulate into significant losses over time.
An example I heard recently is that of a restaurant with a considerably higher F&B spent than other units of the same chain. The difference was subtle but visible when analysing costs over some time. What had happened? The kitchen team at that specific location used slightly bigger measuring cups to assemble key dishes.
Without real-time insights, it is difficult to identify what is going wrong, let alone take action to prevent similar problems in the future.
Another example of actionable intelligence is the analysis of historical data. High performers better predict demand and can adjust their purchases accordingly. As a result, they manage perishables much better, leading to lower food costs. It gives them an incredible competitive advantage.
Improving the efficiency of a multi-unit restaurant operation is crucial, but it should not compromise the quality of the products.
Food safety and quality are key differentiators. When high-performing companies talk about efficiency, they are talking about achieving the highest quality at the lowest cost. Developing robust processes is essential to this, but never at the expense of the customer experience. That comes first.
Top performers, therefore, align their quality initiatives with proven industry standards. These external benchmarks motivate internal stakeholders and help to establish best practices.
An example is food traceability. Large-scale food companies and multi-site restaurants almost always have a central production unit that ships finished and semi-finished products to restaurants and retail outlets. From a quality, safety and regulatory perspective, keeping track of ingredients in storage, production, and distribution is essential for these companies.
High performing companies understand that systematic monitoring and analysis of standardised processes are crucial for quality improvement.
Influential leaders use compliance standards to enhance their processes and integrate quality results directly into their production systems. This allows them to provide quality insights across the entire enterprise. It helps operators identify and resolve quality issues early on. This, in turn, prevents poor quality from occurring, stops non-conforming products from being shipped, keeps customers satisfied, and eliminates the risk of expensive product recalls.
Success in the restaurant industry hinges on production efficiency and product quality.
This includes financial success. We are talking about profit here and not just revenue. Top performers in the industry don’t take any expense for granted. Low performers are likelier to put up with overheads such as energy or water. They see it as the cost-of-doing business, something out of their control.
Top performers have realised that these expenses are undervalued opportunities for savings, both for the environment and the company.
As with all other elements of opex, the better-performing companies make the difference by not relying on gut feeling. They collect the data, generate actionable insights and share them with all departments. This automatically ties sustainability into production.
The returns are significant. In an interview with Kaj Török, CSO (Chief Sustainability Officer) of MAX Burgers, he explains why the Swedish burger chain is a carbon-negative company and focuses on sustainability.
Contrary to assumptions, their carbon neutrality efforts only cost 1% of their revenue, while increasing sales by at least 10%. An ROI of 10 to 1 is a dream for any investment. MAX Burgers is currently Sweden’s most profitable restaurant chain.
Sustainability has contributed to MAX Burger’s success and profitability in five key areas:
Operation excellence in sustainability generates a strong ROI. Instead of seeing it as a cost, the best-performing companies see it as an opportunity to stand out from the competition and increase profits by reducing overheads.
Are you familiar with the term ‘kaizen’?
It’s a Japanese expression that means ‘continuous improvement’. It’s a way of thinking and working where you make small, incremental changes over time to improve a process, product, or service.
It’s how OpEx should be viewed, a working method that focuses on continuously improving processes to achieve better results. There is no end-point.
There is always progress to make. Leaders in well-performing organisations understand that providing visibility into historical and current operational performance is essential.
It’s not only about snapshots but also about long-term trends.
The most successful leaders in F&B use regular audits to measure operational performance and improve yield, productivity, and profitability metrics. They form cross-functional teams to drive buy-in and a company culture that embraces progress. These restaurant companies are more likely to have a formal process to incorporate best practices, and they update business processes as soon as inefficiencies are identified.
Small improvements add up over time, and the most successful companies are those that are never satisfied.
How to improve operations continuously?
A company’s technology strategy significantly impacts the results of its OpEx initiatives.
High-performing restaurant companies build an integrated tech ecosystem that provides real-time visibility and communication across the sites and departments. Followers in the industry are more likely to monitor operations with various online and offline tools.
Evaluation of data, and automation of processes, is complex when systems don’t integrate. Essential information has to be copied to spreadsheets. Data gets lost in the process, and errors occur. This makes the information less reliable. And it takes longer to analyse them effectively, hiding inefficiencies for longer.
By breaking down data silos, companies can synchronise and ingrain operational excellence across the value chain. Combining different systems into one solution creates a cross-functional communication and collaboration platform, further enhancing operational excellence.
The first integration that comes to mind is a POS and F&B management software, breaking down the walls between front and back of house operations.
Operational excellence has become crucial for multi-site restaurants in the fiercely competitive foodservice industry. To achieve OpEx, leaders in the industry must navigate a complex operating environment, including rising costs, the need for increased efficiency, and the demand for high-quality food.
High-performing restaurants have full visibility of all operations. They prioritise data standardisation, continuously monitor operations and automate insight generation. This allows them to improve processes any time and correct mistakes before they cause severe damage to the results.
Thanks to operational excellence, high performers are more likely to stand out, cut costs and remain competitive in a rapidly evolving market.
Get real-time feedback about your restaurants’ inventory, procurement and menu performance in dynamic charts, graphs and dashboards.
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