Running Lean Kitchens

Using Lean to Unlock Efficient/ Predictable / Profitable Catering, Banquet, and Restaurant Operations

Vijay Goel, MD

Contents

- Preface

- About the author

- Copyright

- Chapter 1 Overview

- 1.1 Introduction - Why We Moved to a Lean Kitchen

- 1.2 Who Should Read and Why

- 1.2.1 Owners, General Managers, and Investors

- 1.2.2 Catering Sales and Front of House Executives

- 1.2.3 Executive Chefs

- 1.2.4 Kitchen Managers and Sous Chefs

- 1.2.5 Personal Chefs

- Chapter 2 What a Lean Kitchen Looks Like

- 2.1 What you can expect to see in a lean kitchen

- 2.1.1 Everyone is operating off a plan…and the kitchen is focused

- 2.1.2 There is minimal running around

- 2.1.3 The recipes are used everyday

- 2.1.4 The work is standard

- 2.2 How you might transition to a lean kitchen

- 2.2.1 Wave 1: Simple Production Planning

- 2.2.2 Wave 2: Costed/ Timed Production Planning

- 2.2.3 Wave 3: Order Ingredients as you Need Them

- 2.2.4 Wave 4: Innovation around Opportunities and Issues

- 2.3 Key Concepts

- 2.3.1 Value defined by the customer

- 2.3.2 Continuous improvement

- 2.3.3 Metrics/ Key Performance Indicators

- 2.3.4 Go see the work/ Observation

- 2.3.5 Waste reduction

- 2.3.6 Visual control

- 2.3.7 Visual management

- 2.3.8 Load balancing

- 2.3.9 Standard work

- 2.3.10 Pull system

- 2.3.11 Just-in-time

- Chapter 3 Basics of Kitchen Operations

- 3.1 Basic Elements of Kitchen Operations

- 3.1.1 Prep Production

- 3.1.2 Finishing

- 3.1.3 Packaging

- 3.1.4 Staffing

- 3.1.5 Ordering

- 3.1.6 Receiving

- 3.1.7 Storage

- 3.1.8 Inventory

- 3.1.9 Maintenance/ Cleaning

- 3.1.10 Quality Control

- 3.2 Formats Dictate Kitchen Operations

- 3.2.1 Quick Service Restaurant (QSR)

- 3.2.2 Buffet/ Cafeteria

- 3.2.3 Casual Dining

- 3.2.4 Fine Dining

- 3.2.5 Delivery

- 3.2.6 Catering

- 3.3 Common Economic Models

- 3.3.1 30-30-30-10

- 3.3.2 Food cost = Ingredient cost

- 3.3.3 Labor cost assumed at fixed %

- 3.3.4 Overhead assumed at a fixed %

- Chapter 4 Lean Kitchens Approach: Catering

- 4.1 Summary of Lean Catering Model - Kitchen

- 4.2 Summary of Lean Catering Model - Events

- 4.3 Handling Variation in Catering

- 4.4 Understand Variable Costs and Drivers in Catering

- 4.4.1 Food COGS

- 4.4.2 Other Kitchen Variable Costs

- 4.4.3 Event COGS

- 4.4.4 Cost of Sales and Marketing

Preface

This book is an experiment in taking the amazing work done in lean operations and applying it to the amazingly complex operational environment that is the commercial kitchen.

The publication via Softcover offers a tremendous opportunity to put thoughts “to paper” in an online format and receive instantaneous feedback.  I thank you in advance for your reactions and contributions and I apologize to early readers for the errors and lack of clarity that you will undoubtedly be subjected to.  Please feel free to send stories, issues, and suggestions to leankitchens AT chefalytics DOT com

I hope that after a series of iterations this becomes a useful resource to anyone looking to improve their business, career, and customer results by applying principles I have been very lucky to learn by the happenstance of wondering why such crazy things happened in hospitals.  I thank the many very patient people who have mentored me in the journey since!

About the author

Vijay Goel, MD, is author of Running Lean Kitchens and founder of Chefalytics, a lean operations platform built to improve the operations and profitability of catering companies, restaurants, and banquets.  Chefalytics sprung from efforts to improve operations at a top Los Angeles caterer, founded by his wife (and pastry chef), Elizabeth.

Vijay previously was an independent consultant leading lean and innovation projects at clients including Amgen, United Rentals, Farmers Insurance, and Iron Mountain.

Before that, Vijay was an executive at X PRIZE Foundation and ran projects for the Fortune 500 as an Engagement Manager at McKinsey & Co.

He earned his B.S. at UCLA, his M.D. at USC-Keck and his startup stripes at the school of hard knocks with his initial company, HealthShoppr.  He lives with wife Elizabeth in sunny Manhattan Beach, CA.

Copyright

Running Lean Kitchens: Using Lean to Unlock Efficient, Predictable, and Profitable Commercial Kitchen Operations.  Copyright © 2015 by Vijay Goel.

Chapter 1

Overview

1.1 Introduction - Why We Moved to a Lean Kitchen

If you don’t know where you are going, you will probably end up somewhere else.

-Lawrence J. Peter

How in the f*$% did our $50 meze platter cost out to >$40?

I felt sick and I was sick of it.  It was the fall and we were embarking on some basic costing and recipe standardization work.  We had recently run our financials and kitchen margins were nowhere near target, which meant that all the work that had gone into growing sales had added a lot of new customers and revenue…none of which had translated to the bottom line.

I hated that there was nothing to show for all that hard work.  I was frustrated that there was no way for us to tell if we were up or down tens of thousands of dollars until 6-8 weeks after the fact.  I was afraid of what the miss did to our cash flow and what that meant for my next few months to close the gap.

I was embarassed.  As a former consultant at McKinsey, one of the premier firms in the world, this kind of stuff wasn’t supposed to happen under my roof (my wife and I owned the catering company).  I had fixed much worse than this for others…so what made this so different when it was our company?

I was perplexed at the state of the kitchen.  Our kitchen team was overworked and pulling lots of overtime and our marketing and sales team were upset at lost opportunities with the kitchen “out of capacity”.  People were tired and mistakes were being made that turned the day to day kitchen from the calm but purposeful place it should be into a daily fire drill.  This certainly wasn’t sustainable and it was terrifying to think that the holiday rush was just around the corner.

Changes had to be made, or the chaos and bad energy currently in the kitchen could escape our walls and impact our customers, a non-option for staying alive in the insanely competitive Los Angeles food scene.

We needed to get to the bottom of the margin gap, so we pushed pretty hard on some core recipes for our most popular products.  What we found wasn’t pretty.

Errors in ordering drove ad hoc shopping trips.  Errors in math on ingredient quantities per portion drove high built-in ingredient costs.  Errors in communicating order volumes drove our team to prep the same recipes over and over and use a ton of packaging.  In the meze platter example, this included having up to 5 packages within the tray (each > $1), sourcing expensive olives, and putting labor into multiple steps in a tapenade that was supposed to be a simple condiment.

As we regained control over our kitchen, we found that most of the “fires” originated with a lot of guesstimates that turned out to be wildly incorrect – guestimated ordering, guestimated recipe quantities, guestimated scheduling…the list goes on and on, with each underage driving a fire drill and each overage wasting money.  No wonder everyone was working too hard and margins were bad!

The one tangible place to start was the customer orders…so we started there (in lean this brings you toward a “pull model”).  We used the orders to lay out the catering schedule.  We used that schedule (and inventory) to create a production plan and ordering list.  We added more detail to recipes to make the planning and ordering and scheduling more accurate.  (A trip to a Mexican restaurant and an open conversation over Margaritas didn’t hurt.)  Morale, capacity, and profits quickly headed in a positive direction and we had our best December to date!

This was the start of our kitchen truly heading down the journey of “lean operations”.  While I had learned of lean as a consultant at McKinsey & Co and used these same tools in consulting projects with the Fortune 500, anytime my wife had brought in a kitchen manager/ managing chef it tended to get dropped as things got busier…the action oriented chef couldn’t afford to spend time planning.

As our wildly fluctuating profit numbers can attest, this is hogwash…failure to prepare is preparing to fail.[1]  The only way a kitchen can scale profitably AND deliver great product to its customers AND keep a liveable schedule for its team is to plan effectively.

The following pages lay out a lean operations system as we (including the team at Bite) best understand it today (and it will change with your feedback and a better understanding in future versions so please subscribe!).  I’ll mix theory with practical application and give you a starting point for understanding how a lean operation can work successfully in YOUR kitchen and business.

I hope you find the material useful and I look forward to your comments.  Please feel free to share your thoughts by emailing to leankitchens AT chefalytics DOT com

1.2 Who Should Read and Why

This book is primarily aimed at individuals and teams who want to improve the operational performance of their kitchen but already have in place the basic recipes, equipment, and health department compliance procedures to have a kitchen that can operate legally and safely.  Much of this material will be too advanced if those basics haven’t already been put in place, although it may guide how you initially set them up.

1.2.1 Owners, General Managers, and Investors

We’ll tie together an overview of running a lean kitchen and how it works across your sales and kitchen teams to bring together to improve overall performance, including:

- Improving overall revenue through expanded capacity

- Improving profits through increased productivity and reduced waste

- Improving customer satisfaction (and repeat business) through better product standardization, reduction in errors, and better delivering on their specific requests

1.2.2 Catering Sales and Front of House Executives

We’ll help walk you through the black box of what happens in the kitchen and improve the precision of communication between the kitchen and sales.  We’ll help you deliver on:

- Ensuring service occurs flawlessly

- Ensuring customer requests are communicated clearly and executed

- Increasing sales productivity through increased capacity

- Identifying opportunities to reduce costs, enabling an increase in margins or reductions in price

1.2.3 Executive Chefs

We’ll introduce a more structured production planning flow and recipe template that will help you to better link the activities and orders in your kitchen with the specific recipes being ordered, enabling you to:

- Better track and control weekly production costs

- Understand which recipes have the most potential to drive improvements

- Improve overall kitchen productivity

- Highlight where sales demands (tastings, discounts, large number of small orders) may be impacting kitchen profitability numbers

1.2.4 Kitchen Managers and Sous Chefs

We’ll walk through some detailed production planning, staffing, ordering, and recipe costing to help you escape the daily fire drills and drive:

- Faster production planning and ordering - letting you spend your time more wisely

- Higher productivity in kitchen prep

- More predictable schedules for core team members

- Reduced errors and omissions on orders going out

- Reduced ingredient waste

1.2.5 Personal Chefs

While you may not be able to assign tasks to different people, you have immense control over your approach to selling menus and preparing events.  This material is likely to enable you to:

- Improve your productivity in ordering

- Work on reducing unnecessary steps and non value-add time

- Reduce errors by thinking through customer requirements

1. Proverb attributed to John Wooden, the winningest men’s college basketball coach with 10 NCAA National Championships, including 7 in a row and an 88 game winning streak. ↑

Table of Contents

Frontmatter

Chapter 1