Module 1 - Process Design and analysis (Part 2) Flashcards
The history of Benihana of Tokyo
- First to incorporate Hibachi tables into restaurant, in Japan, 1935, by Yonosuke Aoki
- Started in amercia by his son, Rocky, 1964
- After doing an analysis of the U.S. restaurant market. Is that Americans enjoyed eating in exotic surroundings, but were deeply mistrustful of exotic food
- Restauratn first payed itself in 6 months, second was build 2 years later, only 3 blocks away
- 1972, 15 restaurants, 9 company owned, 5 franchised, 1 co-owned, decision to stop franchising because american owners and investors, had difficult to relate to predominantly native Japanse staff. Control was to difficult to maintain with franchise.
Study notes - powerpoint
The benihana. Develop on the restaurant’s concept
Tricks, atmosphere, efficiency.
- People come for special occasions such as birthdays, business conferences, vacations
- Chef performs a show while cooking in front of the customers and performs tricks such as twirling knives, tossing salt and pepper shakers…
- There is a bar in the restaurant for customers to relax while waiting to be seated.
- Group seating makes it easy for large parties for celebrations.
- We have a visual product to sell. Therefore, Benihana utilizes outstanding visuals in its ads. The accompanying copy is contemporary, sometime offbeat. A recent full page advertisement… did not contain the word restaurant. We also conduct a considerable amount of market research to be sure we know who our customers really are.”
-Only 4 choices of meat
* Side dished cannot be changed
* Suervey respondent consistenlty give foog high ratings
* Prices are relatively cheap
* Meals are relatively quick, dinner could be eaten within 45 minutes, excluding the time spent at the bar ( diner pace not at customers control)
* Atmosphere consists of authentic decorations
* Finally, I insist on historical authenticity. The walls, ceilings, beams, artifacts, and decorative lights of a Benihana are all from Japan. The building materials are gathered from old houses there, carefully disassembled, and shipped in pieces to the United States where they are reassembled by one of my father’s two crews of Japanese carpenters.
Key takeaways
The concept of the Benihana
- People would come for any occasions: from birthdays to business meetings
- Atmosphere: authentic decoration to represent culture and chef performing a show while cooking
- Food was good: owner always doing surveys, with high food quality ratings
- Good was effective, 4 choices of meat and side dish unchangeable
- Cheap price
- Meals quick, good table turnover, since seating time is not determined by customer
- Super effective
Notes powerpoint
How was there cost structure compared to a typical restant rage.
Extremely efficient.
With high % ranges for gross profit. about 10 % higher.
55 to 65% (normal) -> (69.5-73) benihana (we can see they are pretty controled)
There net profit before income tax
-30.9 to 10.6% in normal restaurant
7% to 34% Benihana
Choice of food offerings -> keep cost low
Standardized menu with few options:
-Easier to predict demand
- Economies of scale (disocunts for purcahsing large quantities)
“Food storage and wastage contribute significantly to the overhead of the typical restaurant. By reducing the menu to only three simple Middle American entrees: steak, chicken and shrimp, I have virtually no waste and can cut food costs to between 30% and 35% of food sales…”
- Large number of vegetables -> less expensive than meat
- Essentially the same menu is used for lunch and diner
- Exotic drinks also keep costs low(% of alcohol is lower)
- Hibachi tables reduce costs in two ways
- Lowers labor costs – 10%-12% of gross sales (chefs perform multiple tasks).
- Lowers rent costs – Only about 22% of total space dedicated to the “back of the house” (the space is better utilized).
- Group seating of 8 around a hibachi table is efficient (called batching).
By eliminating the need for a conventional kitchen with the hibachi table arrangement, I can give an unusual amount of attentive service and still keep labor costs to 10%-12% of gross sales… In addition, was able to significantly increase the proportion of floor area dedicated to productive dining space. Only about 22% of the total space of a unit is back of the house… Normally a restaurant requires 30% of its total space as back of the house.”
- Rent costs are about the same as a typical restaurant.
“Benihana has one basic criterion for site selection - high traffic… Most units
were located in a predominantly business district… - Advertising costs are significantly higher than a typical restaurant (comparable to the entertainment industry – ads do not contain the
word ‘restaurant
“Rocky considered that a vitally important factor in Benihana’s success was a substantial investment in creative advertising… The company invested 8%-10% of its gross sales on reaching the public.
Keytakeaways
How was there cost structure compared to a typical restant rage.
- low food offerings = costs low
- Standardized menu with few options -> Easier to predit demand and economies of scale
- Large number of vegetabel = less expensive than meat, exotic drinks keep cost low (low in alcohol)
- almost same menu lunch and dinner
- lower labor cost becaus chef multi task
- Maximization of rent -> 22% attributed to bakc of house
- Batching: 8 seating around hibachi table is efficient
- Rent same then typical restaurant
- Advertisement costs higher, ad more like experience and entertainement rather than restaurant.
Whats more and less critical to Benihana?
Speed : Providing produts faster than competitors
Flexibility: More car design options
Dependability: consistent and reliable pizza delivery
Cost: lower cost flights than competitors
Quality: highest quality food in a restaurant
What is a business process
the process view
A business process is a network of activities performed by resources that transform inputs into outputs
How to represent a process?
A Process Flow Diagram is a symbolic representation of a process
How to define a process flow diagram?
A process flow diagram is comprised of a set of activities linked together in an appropriate sequence
How to divide a process into activities?
- Only inputs and outputs move along the arrows. Activities do not.
− De-coupling processes in this manner, where only inputs and outputs move and activities do not, is useful. It enables us to break a complex operation into activities that can be analyzed independently.
Example of the process low diagram of Benihana.
What are the 3 process flow measures?
- Flow time (units of time): Total time that a flow unit (a customer) spends in an activity/process
- Inventory (#): Number of flow units in an activity/process at any point in time
- Throughput (#/unit of time): Number of flow through an activity/process per unit of time
What is little’s law?
Inventory = Throughput x Flowtime
L
Lambda
W
L= Lambda * W
If throughput = 2 units/second
Flowtime = 3 seconds
How much is inventory?
6 units
A Benihana restaurant processes on average 1,500
customers per 15-hour workday. At any point in time, there are on average 75 customers in the restaurant. How long on average does a customer spend in the restaurant?
Throughput = 1500/15 = 100 customers/hour.
Inventory = 75 customers.
=> Flow time = 75/100 = 3/4 hour = 45 mins
Movie Theater: A movie theater expects its average number of weekly customers to double over the next 5 years. It also expects the average length
of a movie to decrease by 10% over the next 5 years. By what percentage will the movie theater need to increase its seats over the next 5 years?
Let llambda current be the current throughput of the movie theater and let Wcurrent be the
current average length of a movie
