Cambridge Brewing Company

1. Cambridge Brewing Company Lindsey Childers SaipriyaSenKohli Juliana Salgueiro Meredith Sciarrio

2. Agenda • Restaurant Background • Overview of Current Scenario • Objectives and Recommendations • Reduce TAT during peak hours • Define and track KPIs and best practices related to food cost

3. Background on Restaurant • Opened in 1989 and located in Cambridge, MA • Open for lunch weekdays, dinner nightly, and brunch on Saturdays and Sundays • Peak shifts: Thursday-Saturday evenings • Capacity: 120 seats in restaurant with 80 seasonal patio seats open only May-August • Brewmaster, General Manager, and Executive Chef manage day-to-day operations • In 2010: $2,869,634 in sales and $498,857 in net income

4. Overview of Current Scenario • TAT is currently high during peak hours • Difficulty handling high volume • Long waits during peak hours • Currently don’t track food-related KPIs • No measure of how they are performing or impacting profits • Food cost increasing at a higher rate than revenue growth

5. Objectives • Reduce TAT at peak time by 8 minutes through changes in staffing and work flow process • Define and track KPIs and best practices related to food costs

6. Objective 1: Reduce TAT During Peak Hours CBC peak hours: Peak time: Thursday, Friday and Saturday Night Peak hours: 6-9pm (3 hours) Peak time revenue (total)= $17,411 Peak hours revenue 80% x Total peak time revenue (80% is approximate amount) = $ 13,929 Peak hours revenue as percentage of weekly revenue = 26%

7. Objective 1: Reduce TAT During Peak Hours Actual scenario: TAT from the time a customer orders to the time the food arrives is: Non peak times: 720 seconds 180 seconds 120 seconds 120 seconds 60 seconds Total time: 1,200 sec. – 20 minutes Peak times: 120 seconds 720 seconds 290 seconds 290 seconds 370 seconds Bottleneck with staff Bottleneck with staff Bottleneck in kitchen Total time: 1,790 sec. – 30 minutes

8. Objective 1: Reduce TAT During Peak Hours • Recommendation: Increase the capacity of the grill • Burgers represent 28% of food sales • Current capacity: 12 burgers at the same time • Current cycle time: 1 minute • Increase by half the size of grill will allow CBC to produce double the amount of burgers • Gain: reduce start of cooking process by 30 seconds 720 seconds 370 seconds 290 seconds 290 seconds 120 seconds 260 seconds

9. Objective 1: Reduce TAT During Peak Hours • Recommendation: Rearrange the kitchen layout Gain: reduce the time to start cooking from counter time by 15 seconds 120 seconds 720 seconds 370 seconds 290 seconds 290 seconds 245 seconds 260 seconds

10. Objective 1: Reduce TAT During Peak Hours • Recommendation: Include one more employee in the kitchen staff • The grill is used for burgers and also for 6 more dishes • Only one person is responsible for the grill production and burger assembly, creates bottleneck and increases prep time • By having one employee to control the grill and another employee to assemble, they could reduce the production time • Cost: $210/week • Gain: Reduce the assembly process time by 90 seconds 720 seconds 370 seconds 290 seconds 290 seconds 120 seconds 30 seconds 260 seconds 245 seconds

11. Objective 1: Reduce TAT During Peak Hours • Recommendation: Reallocate the front of house staff • When we analyzed the ratio of server per customers, we identified an discrepancy between non-peak and peak hours • We defined an optimal ratio (total customers/total shifts) and found that the optimal number of customers per server would be 49. Then, we suggested a new schedule:

12. Objective 1: Reduce TAT During Peak Hours • Recommendation: Reallocate the front of house staff • Gain: reduce time to enter the order in the system to the non-peak time • reduce time of taking the dish in the kitchen and serving to the customers to the non-peak time Peak times: 720 seconds 370 seconds 290 seconds 120 seconds 290 seconds 120 seconds Proposal process: 245 seconds 180 seconds 720 seconds 180 seconds 245 seconds 120 seconds 30 seconds 30 seconds 260 seconds FROM: 1,790 seconds to 1,295 seconds => Reduction of 495 seconds

13. Objective 1: Reduce TAT During Peak Hours • Total gain projection FROM: 1,790 seconds to 1,295 seconds => Reduction of 495 seconds or 8 minutes

14. Objective 1: Reduce TAT During Peak Hours • Total gain projection: Per peak hour • Total gain projection: 1 month • Total cost projection: 1 month • Additional Gains • Higher customer satisfaction = lifetime value • Shorter lines to be seated during peak hours • Increase in server efficiency and attentiveness • Higher employee satisfaction

15. What is Food Cost? Objective 2: Define Food Cost KPIs and Best Practices • Industry standard metric that tracks inventory carry costs and profitability • Industry standards for successful operations range from 28% to 35% = % Total food and non-alcoholic beverage sales Total food and non-alcoholic beverage cost

16. Objective 2: Define Food Cost KPIs and Best Practices Current Food Cost Control Practices at CBC • Quarterly Inventory – performed by chef, not reviewed by owner, and not used as a food cost tracker • Menu Changes – 4 to 6 times a year, mostly for seasonality • Receiving – all vendors are required to take product to storage area where quality and accuracy checks are performed • Chef performs all food prep with the exception of weekends – prep cook is employed to deal with peak times

17. Suggested KPIs for Tracking Food Cost Objective 2: Define Food Cost KPIs and Best Practices

18. Suggested Best Practices Objective 2: Define Food Cost KPIs and Best Practices

19. Objective 2: Define Food Cost KPIs and Best Practices Possible Schedule for Implementation Responsibility of Head Chef:

20. Questions? Thank you!