Logistics in the Restoration

Logistics… a fashionable term?

La logistics, is no longer a new term for gastronomic companies. In an increasingly competitive environment, they are betting on differentiation, and one of the ways to be able to achieve it and, consequently, to be profitable, lies precisely in the study and search for alternatives of the main weaknesses that it faces and the careful control of its needs, in such a way that they allow them to have the necessary resources at the necessary time, for the necessary customer service.
Somehow, in many of the articles published by the different authors in this magazine, reference has been made to methods and techniques that are related to logistics. If you review them one by one, you will realize that everyone is looking to improve the management of restaurant and achieve high efficiency ratios: financial, quality and acceptance by customers. In short, it is the integration between supply, transport, warehouse, inventory control, production, sales, and as a distinctive element "the service itself".
In the particular case of restaurantsThese indicators are expressed in the generation of income from the offers made and the acceptance that customers have of them. If he accepts a product - service, the restaurant will work to keep it in stock and / or improve it.
Personally, I have exposed in previous articles techniques that evaluate the level of acceptance of customers in terms of the offer and its behavior in relation to the levels of costs and prices, as well as the study and identification of the market niches towards which your product should be oriented. They, in some way, allow the organization to identify what products to buy, when buy it who buy them and in what quantities, and to this we add: how to offer and in what time the service; but not only that, these tools also allow the management of the restaurant establish, monitor and improve customer service while allowing them to measure satisfaction levels.
Menu Engineering, for example, when performing its analysis, allows the organization to identify those dishes that are preferred by the customer, as well as which ones are operating at low or high cost and profit levels; but at the same time, it tells the organization which raw materials to prioritize to keep the supply in stock and at the same time work to maintain or increase the Customer Service Level.
Also, the Analysis Cost - Margin indicates to the administrator what dishes are affecting cost indicators and which these are smoothed or kept at the level of average costs, in this way, the administrator can take strategic with respect to how much offer on each plate, what raw materials already what suppliers buy.  And like these techniques, many others allow different behaviors to be determined by indices, variables or other indicators of the management of the organization.
The gastronomic company at all times seeks to impact the customer through quality, variety, quantity, price and service time; but at the same time it seeks to grow as a company increasing its value and position in the environment of the activity in which it operates.
The old approach that products were processed from the kitchen to the customer and has already changed, today logistics in any sector, but with great influence on gastronomy, seeks a differentiating approach. It is no longer enough just to think about producing and selling, but how to guarantee that this production is profitable, satisfies and provides benefits in both directions: restaurant to the customer and from the customer to the restaurant.
These are some theoretical concepts, so that the matter in question is understood. From now on I will merely express my criteria, I take responsibility for it and I bet on personal experience.
Personal experience
Every day you hear the emergence of a logistics department in a company, or the appointment of a person to handle the matter. The first great dilemma begins there. Is a logistics department necessary ?; Does the volume of activities carried out in the restaurant merit creating a department of this nature? Hiring a person to “distribute the bread”, in a street saying?
The first thing to think about is whether the size of our organization really requires a logistics department or whether it is convenient to integrate the activity into that of the commercial area; economically, a feasibility study must be done: computers, office supplies, salary fund and an important group of material and financial resources are required, which may be used in other areas, as necessary as that, that somehow within of their functions they are already in charge of the logistics activity. The first message then is:in business, fashion should not be a reason to make mistakes and incur unnecessary expenses.
Second, many times the concept of logistics is distorted; some tend to confuse it with shopping activity. Second message:If you do not know for sure what the activity consists of, do not believe it; Hire a consultant and he will give you all the details.
A frequent problem, and I begin to discuss personal experience, has been precisely the confrontation between sales and the buying process. Many managers indicate buying when they see sales taking place and this, in my opinion, should not be a decision that is taken lightly. The above requires a study; study that will offer the necessary information to make a decision.  Third message:"Never judge the book by the cover"; sales are taking place; but the necessary ones; enough to invest in new products.
The foregoing will become much clearer to you as the present progresses. Now, as a result of the above, then the classic questions arise:
  • When to buy?
  • Who to buy from?
  • What quantities?
  • How to identify those needs?
These may turn out to be questions whose answers are already written, formulated, and mathematically tested in many books; The truth is that sometimes in our sector the application of them becomes a bit complex and even useless, because determining, forecasting, anticipating certain results are not always the solution, especially when the demand for services in our restaurant is unstable.
Honestly, for a year, testing myself, seeking to merge all this theoretical wealth with practical experience, showed me that many theories can be handled in another way.
For example: the restaurant supply process can be adapted to the daily count of the goods in stock of the restaurant, once the service or part of it is finished. The famous IPV (Point of Sale Inventory), which many organizations despise and put away at monthly or biweekly frequencies, report important information for the purchase process: If sales, entries and exits to the point of sale of merchandise are recorded daily, they will allow the definition of supply needs from the point of sale itself, identify the products in greatest demand and thus establish a maximum and minimum value for the ordering process.
A trend that I have been able to appreciate in certain gastronomic facilities is to buy in large quantities so that there is no rupture of stocks. From my perception, the purchasing process cannot be done in this way, the fact of knowing that you have enough merchandise will make you think that the supply is correct; and do not take into account that resources (money) that are necessary to carry out other actions may be immobilizing.
Likewise, there is a tendency to only monitor the supply of the central warehouse and not stop at the orders and receptions made by the points of sale, leaving the latter to the personnel who make the sale, who naively think that the more merchandise they have in Your inventory will best respond to your customers.
It is necessary to train the service personnel, the customer contact person, the one who sells directly, on this process, creating an economic conscience that enriches their selling aptitude. Many of the failures or losses that occur in gastronomic companies are caused precisely by the misuse of inventories, the deterioration or expiration of goods that were demanded by the sales area, when they could be bought at an opportune moment and not from concentrated form. Likewise, this excess generates such confusion regarding the offer, making it impossible for the customer and the seller himself to define which product to sell, to which to strategically output in correspondence with the time of existence in their inventories.
You can see the above in any bar. The excess of bottles sometimes does not facilitate the purchase. In this sense, the client must be thought of; some already have defined what to consume, while others require help, either visual or personal, and that is where the great dilemma arises, because oversupply does not help the organization itself to really define which products to prioritize; In this sense I have a personal slogan that is "not to sell for sale, you have to sell what is necessary to obtain what is necessary".
This means, I explain, you as an administrator must set goals; but not going to excess to meet goals, in reality excess certainly does not allow knowing how it was arrived at and being able to determine actions based on its result; on the contrary, the excess does not reveal the light of the strategy and therefore, at any time, that excess will be charged at the time and very expensive.
When this happens, there is a decrease in merchandise in the central inventory and an excess in the one at the point of sale. In this way, the purchasing manager of the restaurant will interpret that the goods have an outlet and will proceed, as is his job, to buy similar products that will then have to be lowered or given another destination because they expire or are no longer in fashion. In inventories you have to have what is necessary, neither more nor less.
The following table is an example of IPV model.
U / M: = Unit of measure.
Initial I: = Initial Inventory (stocks at the time of opening the point of sale).
Entr: = Entries that occur on the day.
Trasl: = Transfers of goods that occur during the day to other points of sale.
Rot: = Products that are detected broken in the counting process or that suffer breakage during handling.
Disp: = Quantity of products actually available for sale.
Sale: = Total products that were sold.
Final I: = Final Inventory (stocks once sales are closed).
To obtain the quantity of products available for sale, proceed as follows:
Disp = (Initial I. + Entries) - (Trasl + Rot)
To obtain the final stocks it will be as follows:
I. Final = (Disp - Sales)
This process is followed for each of the articles reflected in the IPV
I appeal to this type of inventory, I suggest it to the administrators, since really, by being able to establish a maximum and minimum stock at the point of sale, it will allow us to identify when the orders should really be produced at the warehouse; avoid oversizing merchandise in it; as well as, it will constitute an internal control and statistical tool for the administration.
As it can be observed, it indicates the stocks when starting sales, the entries that occur; transfers that are generated between points of sale; as well as products that have suffered deterioration and that cannot be sold.
As an additional feature, at the end of the work shift, it will reflect the sales that have occurred for each product and how much is in stock of each one; which will allow responding to:
  • Do you need to replace the merchandise?
  •  What products should we promote or suggest in sales so that it has an outlet?
But also, as a novel element, it will allow you, by carrying out their periodic study, to identify the organization, registration and cancellation days for each merchandise; products that are preferred by customers; the frequency with which the products deteriorate and if they occur due to mishandling or technical conditions; the frequency, also, in which the orders are occurring and how many times and to which points the shipments of merchandise are generated.
Regarding the purchase process, one of the advantages that allows the restaurant to make the necessary purchases, at the necessary time, is market cuisine. Although this is a method that allows to respond to an immediate demand, it is true that the purchase process from suppliers should not be neglected.
In this sense, the study of suppliers and decisions regarding purchases may be a topic that we will address later in other articles.
Somehow, without trying to repeat what the literature teaches us every day, and which is becoming more and more constant, I have addressed some questions, brief, but based on personal experience, on areas of logistics in the sector.
I am a dreamer and in my dreams I believe that a better world is possible, that no one knows more than anyone, we all learn from everyone. I love gastronomy, numbers, teaching and sharing all the little I know, because by sharing I also learn. "Let's all go together from foundation to success"
Last entries of MBA Yosvanys R Guerra Valverde (see everything)