Reducing Kitchen Overtime Payments Project # 82462 Sheraton Grand Hotel & Spa Project Leader – Jill Easton

1. Reducing Kitchen Overtime Payments Project # 82462 Sheraton Grand Hotel & Spa Project Leader – Jill Easton Project Sponsor – Sacha Cauwels, Food & Beverage Director Black Belt – Peter Cullen Master Black Belt – Paul James

2. Project Justification Problem / Opportunity During 2001 our kitchen paid out just over $109,000 in overtime payments. So far in 2002, our kitchen payroll is already $39,000 over budget as we head towards the busy Xmas and New Year period. We have 2 more full time members of kitchen staff than we have budgeted and we only have marginal equivalent increases in F&B revenues. 2003 budget is written with the same ‘headcount’ (no. of staff) as 2002 and there is no plan to alter the structure or operational style of the kitchen. If the pattern of the last few years is not changes, the likelihood of kitchen payroll being considerably over-budget again next year is very high. Overtime Payments Structure:- Overtime Payments (1.5 x) are paid on any hours worked beyond 40 hours a week Double Time Payments (2.0 x ) are paid if the person is asked to work on the 6th or 7th day of their week Context:- The hotel has 2 restaurants (outlets)…The Terrace (120 seater buffet) and The Grill Room (45 seat 3 Rosette fine dining) and a large Banqueting operation able to do sit down meal x 450 All meals are prepared in a central kitchen traditionally split into 4 ‘corners’

3. SIPOC SIPOC chart is used to visualise the overall process and all the different elements that need to align in-order for it to happen The second main use of the SIPOC chart was to generate ‘searching questions’ that we can use to explore certain theories Do kitchen rotas coincide with restaurant opening hours? What is the range and complexity of the menus and dishes that are on offer? How long does each one take to prepare? What are the most popular dishes in each outlet? How complicated are the most popular dishes and how long do they take to make? Which section of the kitchen generates the most overtime? How are the kitchen rotas put together? What are the effects of holidays, sickness etc? What role do ‘stores’ play in delivering produce to the kitchen? How much prep is involved? How far ahead does it get done? How do the chefs know what to do? Do they have to run around and find someone to ask? Is there enough equipment available at the right time? Do chefs have to wait while equipment is washed & cleaned, for example? For big functions, how much can be cooked at once?

4. Voice of the Customer

5. Voice of the Customer Voice of the Customer comments gave us further ideas and clues about some of the factors that might be causing the overtime problem

6. Which section of the kitchen generates the most overtime? To answer this question we had to collect data from the HR & Payroll system that contained:- Hours actually worked per chef Hours at Overtime Rate (1.5x) per chef Hours worked at Double Time per chef We then manually went through 6 months worth of kitchen rotas, noting who was working in which section between which dates. These two sets of information were then matched together to determine which section of the kitchen people were working in during the periods when they were generating the most overtime payments The feeling among the chefs was that the Larder section would generate the most overtime as this was this was the section with the most diverse demands. While this turned out to be true, it had to be considered that there are up to 6 chefs in the larder section at any one time whereas other sections maybe only have 1 or 2. Therefore, it stood to reason that the larder would generate the most. But was this the full story? To dig a little deeper, we decided to have a look at the same figures again but, this time, average them across the number of people in that particular section… …this time the answer was very different!

7. Which section of the kitchen generates the most overtime? At some point in the past, the night chefs had agreed a shift pattern of 7 nights on, 7 nights off, working 12 hour shifts. Over the course of the 4 week pay period, this means they would normally work 168 hours and should receive:- 160 hours @ time + 20% Night Premium + 8 hours @ Time & Half As previously mentioned, the night chefs worked a 7-day week. A horrible possibility began to appear…which Payroll’s timesheets confirmed as being true. In actual fact, the night chefs were claiming Double Time on the 6th and 7th day of each week that they were working. This meant that they were receiving:- 160 hours @ time +20% Night Premium + 48 hours @ Double Time The night chefs were generating over twice as much overtime each as anyone else in the kitchen. As the 2 night chefs have traditionally done such regular shifts, this seemed very strange. We began to look at what could be causing this! The answer lay in their shift patterns

8. Which section of the kitchen generates the most overtime? Overall, the generation of overtime across the 3 main kitchen sections was quite even. We began to look at some of the processes involved in these areas to see if any of the processes could be improved and any time could be saved. We moved on to our next question…

9. What are the most popular dishes in each outlet? How complicated are the most popular dishes and how long do they take to make? The most popular dishes (across all the outlets) were:- French Fries Club Sandwiches Chicken Sandwiches Ham & Apple Chutney Sandwiches Smoked Salmon Sandwiches The ‘Grand’ Burger Soup of the Day Cream Teas Egg & Mayonnaise Sandwiches Collectively, these 9 dishes account for 80% of all the dishes that the kitchen produces What follows is a series of flow charts mapping some of the processes involved in preparing some of these seemingly-straight-forward dishes! Data on the most popular menu items was gathered from the Micros POS system and analysed to give a ‘Pareto’ chart of the most commonly prepared dishes. Any improvements we could make to the processes involved in these dishes would have the greatest impact. 80% of all Outlet Food Orders

10. Egg Mayonnaise Sandwich Filling Ham & Apple Chutney Sandwich Filling Handmade Crisps (served with all Sandwiches) 2 hours 3 hours 5 hours - not including overnight soak or possible delay for Brat-Pan 3 hours – not including possible delay for availability of range

11. What are the most popular dishes in each outlet? How complicated are the most popular dishes and how long do they take to make? A further ‘soul-destroying’ process that the larder performs (although not mentioned previously) is the hand-picking of salad leaves for salads and garnish. Picking leaves is regarded as an on-going joke among the chefs who, on a busy day, can spend up to 6 hours washing, rinsing and picking the leaves. The reason…‘quality and cleanliness’. A different Six Sigma project (concerned with complaints, discounts, deductions and rebates) had discovered 4 separate occasions in 3 months that food had been sent back because of ‘foreign objects’ being found in the salad leaves. Proof-enough that this time-consuming process (done in the name of ‘quality’) was far from effective. • The previous process maps highlight that a great deal of chefs’ hours are spent preparing items that are:- • Very easily and cheaply bought-in ready-made • The cheapest retail food items available in the hotel • Add little, if any value to the customer’s experience (eg. Would you really care if the ham in your sandwich was sliced by hand or by a machine?!) The large volumes that these items are prepared in means that a small improvement in the process of each would make big impact to the overall workload of the kitchen It was also suggested that the “soul destroying” nature of some of these processes might be a contributing factor to the staff turnover that exists in the kitchen.

12. “Banqueting menus are mostly old Grill Room menus” What is the range and complexity of the menus and how long does each one take to prepare? If dishes that were designed for a 3 Rosette fine dining room are being mass produced in large volumes as part of our Banqueting offering, it is reasonable to assume that these particular dishes might be quite complicated, labour-intensive and time-consuming to prepare. To verify any link between this and the overtime situation, we again went back to our payroll data. By dividing the number of covers into the payroll data we were able to calculate an ‘Hours per Cover’ productivity measure. A correlation of this metric against the kitchen’s payroll gives a correlation co-efficient of 0.815…considerably greater than the 0.65 threshold A fitted-line regression plot of this data clearly shows that as the ‘hrs per cover’ increases, so does the payroll. It is a positive correlation. This suggests that if the dishes were made simpler then the time required to produce each cover would decrease accordingly and the kitchen payroll would come down

13. How are the kitchen’s rotas put together? What are the effects of holidays, sickness etc? If the chef’s comments were true then you would expect to see a positive correlation (>0.65) between Holiday Hours and Overtime Hours It can clearly be seen that there is no such result either for Time & Half or Double Time hours Therefore, if the kitchen’s rotas continue to be structured in the same way, this argument can be disregarded as a reason for overtime. In turn, this suggests that any recruitment of extra chefs (to help cover during holiday periods) would potentially make no difference to the amount of overtime generated. The solution is not to ‘throw people at it’ Voice of the Customer comments from the Sous Chef suggest that the current staffing levels are already stretched, working to full capacity and overtime is generated when chefs are either away on sick leave or vacation (owing to covering shifts) To verify this argument, we went back to our payroll data to see if there were any correlations between no. of holiday, sick, or other un-worked hours and the volume of overtime generated We used Minitab statistics software to generate a correlation study of the data For a relationship to be established between two sets of data, the correlation result needs to be greater than 0.65 or less than -0.65

14. How are the kitchen’s rotas put together? What are the effects of holidays, sickness etc? “The outlets have out-grown the kitchen. We’re expected to do more and more with fewer and fewer chefs” Further clues to the construction of the kitchen rotas came from a more in-depth correlation analysis which measured the productivity of the kitchen against the number of covers served in each outlet. It was interesting to note initially that the Total Hours worked in the kitchen (all salaried hours plus all overtime hours) bore no relationship to the Total Covers. This suggests strongly that the rotas are not necessarily constructed relative to the business levels in the hotel.

15. How are the kitchen’s rotas put together? What are the effects of holidays, sickness etc? The presence of a correlation between Total Covers and Overtime Hours but not between Total Hours Worked possibly indicates further that the rotas are not being constructed around the business A couple of scenarios that would result in these figures could be:- The kitchen are already working at their maximum capacity. Any additional business cannot be absorbed into the existing work hours. So, as soon as covers go up, the kitchen jumps straight into an overtime situation. However, if the rotas were proactively being constructed around the needs of the business, you would expect people to be brought in for whole extra shifts, in which case it would either show in the Hrs @ Time column or the Double Time column. Neither is seen The rotas are constructed irrespective of the business levels within the hotel. So, if any additional volume comes in, it can only be serviced by doing ‘additional hours’ on top of the existing roster.

16. Do kitchen rotas coincide with restaurant opening hours? A ’10 Split’ shift is 10am – 2pm then 6pm – 10pm. This means that Lunch Service either finishes at exactly the same time as the shift or, in most cases, later. Given that chefs have to ‘clean down’ their areas at the end of service, how can this get done if the chefs have already gone off-shift half an hour earlier?…unless they are staying behind and generating overtime The same situation exists at the end of Dinner Service Similarly, it is unrealistic that a chef will walk to his station and everything will be fully prepared and ready for service at exactly 6 o’clock - just as service starts Again, the reality of the job means that they will be required to come in early to ensure Mise en Place is complete before service actually starts…and accrue more overtime

17. Our Recommendations were… • Re-engineer the Night Chef’s shift pattern so they avoid working 7 days in one session. • Re-negotiate the structure of Night Chefs pay to be wholly covered by a fixed salary • Trial various bought-in, pre-prepared products to eliminate labour-intensive preparation of high-volume, low-return dishes • Re-engineer Banqueting Menu to be more simple and less labour-intensive • Assess the possibility of dividing the kitchen to give the Bar and Room Service a bespoke area with all necessary equipment for their relevant menus • Use productivity measures in new time-sheet system to ensure that rosters are written relative to the volume and needs of the business • Re-align shift patterns to more accurately and effectively meet the needs of the business and the opening times of the outlets, allowing for preparation & pre / post service requirements At the time of writing, the kitchen have already begun to trial various pre-prepared, bought-in food options and the trials are going well. Food & Beverage Control have agreed that deliveries and decanting of meat will be performed by them, removing 4 out of 8 steps from the delivery process and potentially freeing-up an extra hour per day ( equates to over 360 hours per year or just over two working months!) of the Sous Chef’s time! Owing to the imminent departure and replacement of our Executive Chef, the more organisational and time-management aspects of the kitchen are being put on hold until the new Executive Chef arrives and can be briefed about this project’s findings

18. Improvements implemented… • Night chef’s shift pattern changed from (7 on / 7 off) to (4 on / 4 off) with hours aggregated over the month • Various pre-prepared products are now being bought in. For example, mayonnaise, egg mayonnaise, pre-sliced ham, chutney etc. Products were blind tested on members of the kitchen staff and were positively received. VOC from kitchen staff regarding removal of ‘mind-numbing’ jobs has been extremely positive • Banqueting & buffet menus are being totally re-designed as part of DMAIC project 23405 and the ‘labour intensity’ piece that overlaps between these 2 projects will form a major part of those new menus • Further inspection of the rotas suggested that the problems encountered there were mainly centred on manning the Grill Room. In conjunction with a review of the business levels in the Grill Room we have taken a decision to keep this outlet closed on a Monday, thereby reducing it to a 5 day operation with subsequent effect on overtime