Integrating Back-End And Front-End F&B Operations

Kaiz Patel

Food and beverage operations are in nature complex, labour and material intensive as well as they need to share resources with other departments within a hotel/restaurant. In today’s fast, multifarious and increasingly competitive business environment managing information effectively is becoming a key factor and technology the major differentiator, hence integrating back-end and front-end food and beverage operations is the key to a successful business model.

With the given pressures of competition, companies are focusing on the productivity and efficiency levels. Most tasks are now dependent on technology to effectively leverage processes and functions across the whole business value chain which in turn brings about enhanced productivity, efficiency, speed and consistency.

The major steps involved in the value chain in food and beverage operations are ’sourcing’ of raw material (purchase, receiving and stores departments) its ’preparation’ (kitchen department) and ’delivery’ (sales outlets). In addition to these departments, accounting department has a key involvement in all these three steps of the value chain.

It is not enough to have a automated Point of Sale (POS) software and a Accounting cum Inventory Management system. What is required is technology that can merge diverse food and beverage department functions into one enterprise wide platform, that starts with raw material specifications (standard specifications) to recipes (standardised recipes) and moves through all the stages of purchasing, production to sales, to evaluation.

All department processes have software/hardware tools for their functions, for example touch screen POS, hand-held pocket PC enabled order taking linked to remote KOT printers - speed up service and order taking procedures.

Recipe management software is a chef centric solution that lets chefs have real-time information on recipes, food costs, nutrient information and cost of ingredients.

Material management software that take data from the recipe management solution and link it to stores, purchase, receiving. Bar code readers are increasingly being used to collect inventory data. This then would interface with accounting software which would integrate POS data and derive actual and theoretical food costs and variances as well as manages payments to vendors/suppliers.

This complete scenario is explained in the below given work-flow diagram. (See figure 1).

Here’s how a truly integrated solution works in a nutshell:

(Work flow diagram courtesy EGS - Switzerland)(Figure 1)

Step One

Each ingredient, its yield, it wastage percentage, its cost for various packaging units, suppliers details are compiled. Based on the ingredients, standard recipes are entered into a database, a recipe management software example EGS RecipeNet or Calcmenu helps you manage recipes, ingredient costs, nutritional data and pricing of dishes and menus. This is then linked to material management software like EGS F&B Control to synchronise changes in merchandise costs etc.

Step Two

All back-office activities are entered in EGS F&B Control, such as requisitions, purchases, delivery receipts, inter-kitchen transfers, and monthly inventories. Inventories can easily be monitored and managed anytime!

Step Three

EGS F&B Control can be linked with a POS System (Fidelio Micros). Sales transactions in the POS system is imported in EGS F&B Control, thus one can easily monitor the sales performance.

Step Four

EGS F&B Control combines sales quantity data from POS with the standardised recipes, producing a raw material list of ‘ideal usage’. Inventory is automatically depleted based on sales resulting in an ‘ideal inventory’ report.

EGS F&B Control also combines sales quantity data from POS with the standardised recipe costs, generating an ‘ideal food cost report’.

Step Five

Undertaking a monthly physical inventory count (manually or with bar code scanner) and entering that actual quantities into the programme, would generate an inventory variance report - showing the difference between ideal inventory and actual inventory.

By identifying the food items that cause your food cost variances, it is possible to apply proper control measures on them to lower food costs.

EGS F&B Control also integrates with accounting software (Tally) to export details of purchases to make payments to vendors and suppliers.

By giving accurate inventory, sales and food cost variance reports, this integrated solution helps reduce food costs and gives total control of the business cycle.

Multi-city or hotel chains can benefit from these technologies too. For example, in case of a restaurant operating in five cities across India, the recipes to be followed by the chain are same and exact across all outlets but cost of ingredients would vary in each city.

Hence, the recipe to be followed will be retrieved from the recipe management software, the price from the material management software and linked real time on the companies intranet resulting in uniform recipe usage and accurate costing. There are intrinsic efficiencies that integration offers - reduced data entry, increased information exchange, making information easier to retrieve and easier for management to base their ideas and strategy on.

Today most companies are shifting to a web-based solution that works on a local intranet or a company wide intranet. These configurations like Thin Client 1 and Application Service Provider 2 are systems that are much easier to maintain as only the server needs to be updated for changes or upgrades.

Using technology requires constant support and data back up services. Clients today demand 365/24/7 support. Which in turn has led to the trend that almost all systems now offer remote support and remote update. This simplifies, speeds up and reduces cost of support. A user-friendly, effective and integrated solution for information exchange is critical.

The ability to access information, analyse and use it for collaboration and distribute it is key to increasing productivity, reducing costs and being competitively successful.

(The author is CEO of Kaiz Hospitality Services. He can be contacted on kaiz@kaizconult.com)