An Introduction To Efficient Food Systems: Rethinking Operational Chaos In The Food Industry

How often do you feel less like a food operator and more like a firefighter, constantly dashing from one fire to the next? You’re trying to setup your business to sustain profitability, but you rarely feel like you can get ahead enough to work on your business.

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It’s not just you. Chaos is the default state of the food industry.

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A rare few reach a point where their businesses effectively run themselves—and they all have one thing in common: they create highly efficient systems and processes.

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The way they train employees, manage recipes, send orders from the POS to the kitchen, manage inventory, and track tasks—their approach to the systems is fundamentally different.

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And we’re going to show you how you can get there too.

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It’s time we rethink our food systems. For decades we’ve accepted that chaos is “part of the business,” but the rapidly changing market—from rising labor, to shifting food preferences, to lower margins—demands we change with it. And, even though change can seem inconvenient, there’s a lot to look forward to:

• No more running from fire to fire
• Independent teams that can problem solve on their own
• Precise food costing and budgeting
• Reduced food waste and labor costs
• Data-driven decision-making
• Higher margins

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But before we can achieve these results, we need to redefine what a good system looks like.

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The Essential Elements Of A Good Food System

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Food systems that empower you to thrive—not merely maintain the status quo—have key at tributes that are always the same.

• Good systems push you toward a precise goal. You can draw a line directly from the system to the end result, like how adding up food costs helps you find ways to cut out non-profitable items.
• They eliminate competing systems. Good systems act as your single source of truth, so you don’t have to worry about forgetting which of three spreadsheets has the most recent food cost calculations.
• It is designed to change. The system can adapt to new information quickly. Business models evolve overtime, so it’s important that your food cost calculations can evolve too without breaking the spreadsheet.
• They’re accessible to the right people. Some people need to be able to update food costs—others don’t. A good system keeps the right people connected without being open to accidental change or disruption.

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We like to break systems down into ‘levels’ to help visualize how upgrading systems can lead to reduced stress, confusion, and time commitment.

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At Level 1, you’re likely guesstimating an average food cost percentage and using it every month, regardless of how accurate it is on a month-to-month basis. At Level 5, you’re more sophisticated, with recipes and estimated food costs inserted into a few Excel sheets for easier editing.

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Level 10 is where the magic really happens.

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Imagine being able to look at a dashboard and know exactly what your food costs and recipe margins are in real time. No need to place orders and hope it all adds up down the road. No need to try to keep up with changes in prices with manual data entry. No need to sit down with a calculator the month after to see how much you made.

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A good food software system gives you real-time data—down to a per-ingredient level—and updates every relevant recipe automatically as ingredient prices change.

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As you know, this is rarely the reality.

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Most Food Businesses Run On Bad Systems

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Costing food is where bad systems are most apparent (and harmful to long-term success).

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Calculating costs in a spreadsheet works for right now, but what happens when ingredient prices change next week? You have to look at your supplier’s website, then manually change the prices on all of your recipes in Excel—week after week after week.

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And since you made the spreadsheet yourself a couple years ago, the process of updating it is complicated. It would take too long to train some one else to do it. And that new service you’re going to offer soon? That’ll probably take building out a whole new spreadsheet.

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Bad systems like this are the norm in the food industry. They’re not flexible, require countless hours of hands-on adjusting, aren’t scalable, don’t integrate with other systems to reduce complexity, and are not easily managed by other people on your team.

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It’s Time For A Better Food System Framework

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We’ve developed a framework for building efficient food systems that anyone in the industry can use to calm the operational chaos, from restaurants, to meal kits companies, to contract food service providers, and beyond.

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Allow me to introduce the five pillars of efficient food systems.

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The first two pillars are inputs, meaning they lay the food data foundation that establishes your business within the framework.Recipe Catalog:

• Recipe Catalog: The central hub of all things ingredients, recipes, costs,  quantities, and execution.
• Planning: The way you prep are for the future, from forecasting sales to selecting menus.

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The remaining three pillars are outputs, the secondary processes that use the data from the first two pillars and transform it into actionable workflows for other areas of your business.

• Purchasing: The process of buying the right ingredients, at the right volumes, at the right time.
• Inventory: The way you track raw goods, calculate waste, and create more accurate sales forecasts for the future.
• Production: The procedures and tasks that drive your business forward, like batching production, step-by-step task tracking, and maximizing labor.

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These pillars are not silos, like so many systems in the food industry are currently. Information flows from one to the next, creating feedback loops that enhance the entire food business.

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Inventory trends create more optimized purchase orders. And better purchasing reduces waste, which updates your real-time recipe costs and margins— which then helps you better plan to hit profitability targets.

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These five pillars, when fully integrated, create a unified system that puts your business on autopilot, frees you from working in your business, and helps you see the way forward with real-time, actionable data.

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Conclusion

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The status quo isn’t good enough. The food market demands we change, or else.In the food industry, we often believe operational chaos is “just part of the business”. We make important decisions with guesswork, dash from fire to fire, and struggle to achieve real, sustainable growth.

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It’s time we rethink our food systems.