Six Sigma provides benefits no matter which industry it is being used, even if it is the foodservice industry. This is particularly true for restaurants. But how exactly can a restaurant use Six Sigma to its benefit? Here are four use cases that can help paint the picture.

1. Improving Efficiency

Focussing on efficiency is different depending on what restaurant it is. For instance, If it is a fast-food joint, the food needs to be prepared at a quicker pace in order to serve customers and make deliveries faster while making sure to reduce costs. Efficiency for owners of a dining establishment will pay attention to providing customers with a high-quality dining experience in the most efficient manner possible, from the service to the food.

2. Increasing Profits

A big part of managing a restaurant is making sure there is minimal inventory waste. Because of the tools and techniques provided by Six Sigma, there is greater control of inventory, allowing for the reduction of waste and minimization of costs. For instance, Six Sigma’s tools and techniques can allow restaurant managers to anticipate how busy the restaurant will be on a particular day. They can do this by analyzing the data collected over a specific period of time. This can allow restaurant managers to order the exact amount of inventory needed for that day to reduce waste and realize more profits.

When it comes to service delivery, staff are a critical component. The level of customer service is directly proportional to sales. Six Sigma can help restaurants improve customer service in order to improve sales through the DMAIC methodology. For instance, proven methods of enhancing customer services can be embedded in the Control phase while the restaurant staff is being trained in DMAIC

Customer service is not the only thing that has a direct effect on sales. Marketing does too. Using Six Sigma’s data-driven approach, restaurants can measure and analyze data to target their ideal customer with the right marketing strategy. This way, resources are not wasted on targeting the wrong people and there is a good return on investment (ROI). As more data from the marketing campaign comes through, the strategy can be continuously improved based on further analysis to achieve an even greater ROI.

3. Testing New Products

Most times, if restaurants want to see if customers will like a new menu item, they just put it on the menu then see what happens. However, Six Sigma uses a different approach. Restaurant managers can look at the data (e.g. accounting data) to see if the product they just introduced is increasing sales enough to warrant a permanent spot on the menu.

4. Reduced Costs

Established methodologies like Six Sigma do a great job of strengthening relationships in key business areas to cut costs. For instance, if the restaurant’s accountant has an efficient and standardized approach to record-keeping that is highly-accurate, they can minimize costs and save the restaurant a significant amount of money.

Conclusion

Six Sigma can help restaurants and other businesses in the foodservice industry in many ways. As you can see, it works well to help restaurants improve efficiency, increase profits, test new products and reduce costs. All of these use cases help the business become more profitable and gain a competitive edge.

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Operating a restaurant will often demand more elbow grease and innovation than is needed to run other kinds of service businesses. The costs are much higher as the inputs have short shelf lives, employee turnover is relatively high and the ultimate success or failure of the business is down to your ability to attract and retain repeat customers.

With this in mind, is it possible for your restaurant to save on costs each month and still operate at its optimum capacity? Below are some simple to implement cost reduction strategies for your restaurant.

1. Reduce Paperwork – Go Digital

Today, nearly every document has a digital copy. A great way to save on the costs of running your restaurant is to make your records paperless. When you adopt the use of paperless invoices and transaction receipts, you no longer need to stock up on reams of paper, printers or cartridges and file folders.

You can send your customers their receipts via email or by text message to their phones. Signatures can be verified by swiping a finger on a screen. Also, bulky check presenters will be a thing of the past.

2. Classify Your Crucial and Optional Costs

What costs are vital to your restaurant business, and which can be eliminated? It is among the essential questions every restaurant owner must ask themselves. Through the reduction of unnecessary costs, you will find that you can save hundreds of dollars each month.

Do I need another case of tomato paste? Do we really have to buy three filters for each pot of the coffee maker?’ Is it necessary to get replacement menu holders?’ Answering no to any questions of this type will result in more cash in your register.

3. Manage Inventory and Control Food Costs

Tracking and controlling your inventory may seem like a rather tedious task, but it can dramatically reduce your costs. You should work on annual contracts with your vendors in order to be able to accurately order your inventory and track inflows and outflows from your restaurant. It will lower both variance and cost of food.

In any restaurant, certain menu items will tend to be more popular than others. If you have listed a dish that is just not selling, you should consider eliminating it entirely from your menu. You will save on the money used to purchase the ingredients.

4. Streamline Your Staffing Processes

After a while of operating continuously, you’ll start to notice a pattern of what days of the week and times of the day are most profitable for your restaurant. These times need all hands on deck, but what about off-peak times? Unless you are running a promotion or in special circumstances, you should cut down on your labor.

Your labor and restaurant costs can also be reduced if you lower your employee turnover. Hiring a staff member for your restaurant requires a lot of resources from interviews and getting them onboard to training. When looking for new employees, focus on getting the most qualified and experienced people and offer them favorable terms to retain them.

5. Purchase Raw Materials on Credit

Another cost reduction strategy that should work for your restaurant is to minimize cash transactions and make all purchases on credit through your restaurant’s account. Normally, inputs purchased in cash are fewer in quantity and are more expensive than bulk credit purchases. Purchasing your restaurant’s raw materials using credit lets you run your establishment and generate revenue to pay off the credit later.

Conclusion

The major reason why restaurants fail to manage finances and experience losses is because they are unable to keep their many costs under control. Cost control for restaurants is essential since it will let you narrow down to the biggest expenses and then take preventive and corrective measures to maintain a healthy balance between your finances and expenses.

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