Surviving in a Struggling Economy

Every facet of our entire nation is struggling with the economy; government, consumers, private industry, public service organizations, education and health care, to name a few, are all searching for ways to survive. The hospitality industry is no exception.  Industry leaders, all across the country and in every segment of the industry, are evaluating all aspects of their business attempting to identify every possible avenue available for reducing expenses, increasing productivity and developing additional revenues. 

Back to the future:
One tried and true very successful method, for accomplishing the above, used in the past and proven to be extremely effective is “centralized purchasing, production and distribution”.  In the past decade this highly efficient system has generally been used only by large institutions.  These organizations, because of their size must constantly be on the cutting edge of effective, tight operating controls.  The hospitality industry in general, because business was good, has had the luxury of focusing primarily on sales and growth during those years.  Controlling expenses and maintaining a high level of productivity, while recognized as a necessity, for the most part was given only lip service.  Achieving maximum cost efficiency was not a major priority as long as an organization was growing and profitable.

Reviewing potential:
Below you will find a brief outline of a few of the most obvious benefits this proven system offers.  Every situation must be considered on its own merits.  It is very important to understand that as an organization considers this alternative it must be very objective.  Honest objectivity must be used as the potential value of this operating nuance is evaluated.  Conducting a professional, completely objective, detailed evaluation is the only way to determine the true benefits the system will provide your organization.  Performing the review with a preconceived outcome however, will render the review meaningless. 

It is extremely difficult for an “in-house Director, with no central production/distribution, operating experience, to be objective or even to initially recognize its potential.  Often on-site administrators/managers will approach this type of review with concerns that they may loose control.  Thus they will unintentionally skew the outcome.  The fact is that an on-site Administrator/manager will have significantly more control.

We suggest a hospitality industry professional that has successfully operated a central system be called in to assist in identifying, evaluating and documenting the potential financial and operational benefits your organization can expect from implementing some form of centralization.

Benefits:
A centralized system provides the potential for significant benefits in many areas of a food service operation.  A few of the most typical benefits areas include:

• Personnel issues
• Capital expenditure
• Purchasing
• Warehousing and inventory control
• Food production
  • Quality control
  • Dietary compliance
  • Consistency
  • Food safety issues
• Distribution
• Technical expertise availability
• Training programs and trainers
• Facilities management and service
• Professional mentoring/consulting (in all categories)
• Financial planning, operational tracking, reporting and management
• Operating systems (including software)
• Cost control
• Security
• Public relations
• Industry related training, evaluation and on-going retraining
• Career development programs
• Access to established support networks
• Assistance with governmental agencies and regulation compliance
• Nutrition assistance and menu planning
• Tested and approved recipes
• Administrative assistance in all categories including HR issues
• Assistance with acquiring and maintain a strong volunteer network
• Marketing (where/if appropriate)
  

Summary:
Prudent, measured change is the key to keeping current with the constantly changing demands we face in staining our businesses.  As a prudent manager you must always make time to routinely reevaluate your methods of operation.  You must continually seek innovative ways to improve revenue, increase productivity, and enhance quality of products and service and to assure your operation is achieving maximum bottom line results.

A centralized system may well provide not only significant cost efficiencies but major quality and operational improvements as well.

We strongly urge you to look into this established industry operating nuance immediately before your bottom line erodes even further.

Back_To_Top

For further information contact us at:  http://www.hospitalityindustryresources.info/contact_us.html