Tuesday, May 10, 2016

Improving efficiency should always be a business goal!

Most any business has some inefficiency built into its day to day operation. Some run much better than others depending on staffing requirements, the work environment and skill levels needed. I find restaurants are a good model to look at as they offer a full menu of areas than can be improved (excuse the pun).

For this post, I decided to take a look at a situation similar to the one I've drawn below:

In the schematic you have a bar area with dining tables on two sides. (You can assume that the kitchen is located towards the back area). Please notice that there are two cash registers areas; one located by the entrance and a second over behind the bar. Typically, bar patrons pay at the bar register while diners amble over to the register located by the entrance after they've finished dining. Note that on any given day there will be on average two servers, a cook and a bartender/manager. Now, while everyone is pretty much cross trained at all the positions, it is typically the bartender who serves as the main cashier at both register locations. He or she is also responsible to make sure new arrivals are cordially greeted and seated after which a server takes over.

Next, let's take a look at some potential inefficiencies in this scenario. Note that the bartender is most likely to be found behind the bar as a typical starting point. Second, let's assume that on a typical day our theoretical establishment will ring up about 100 tickets. (This would imply that the four employees present, during any one shift, are all kept pretty busy). Third, let's make an assumption that of the 100 tickets rung up each day, 60 are at the entrance register and 40 are at the bar. All things being equal, one could then reasonably extrapolate that the bartender will make quite a few trips to the entrance register during the course of a normal business day. Next, for the purpose of argument, let's estimate those trips to be about 30 per day. Furthermore, that each trip would require the employee to navigate from position X over to the entrance register/greeting area. (Now, while that person can take one of two possible routes, let's average it out and say that the distance covered is about 40 feet for one round trip). Summarizing, forty trips at forty feet per would equal ~1600 feet traversed each day. That figure can then be used to estimate that the distance walked would be roughly 11,200 feet per week which would come to something like 548,200 feet a year
(that's just about 110 miles)! Now, assuming that the person(s) walked at 2 mph, the time spent going back and forth would come to 55 hours of time per year. Wow!

OK, now let's change a couple of small things:

Note that; 1) an access way has be inserted in the main bar and 2) the entrance register has also been moved to that general location. Additionally, the old register booth was now being used for merchandise which makes that square footage a cash producer (potentially)! The bartender/manager now only needs to walk a few feet, in either direction to service either the bar customers or the diners. This series of changes will result in three positive changes for the owner;

  1. A significant number of man hours could  be saved each year
  2. Patrons coming in to the establishment could be greeted a minute, or so, faster
  3. Square footage was freed up for new income potential

What's really happened her? A quantifiable increase in efficiency at little infrastructural cost.

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