Consumer case study

Popular pub-restaurant chain faces challenge to boost efficiency and EBITDA

Food & Beverage Industry, Lean Transformation

Situation

Well-known pub-restaurant chain with >400 units.  Well-defined financial/operational controls delivering EBITDA above 20% and consistent growth in revenues but also menu complexity.  Pressure from operational management to increase back-of-house footprint, capex on equipment and staffing levels due to a perceived threat to service levels.

Our brief from the CEO as to challenge the current operating model, including footprint, equipment, staffing, service levels and EBITDA.

Approach

A three-stage approach was employed as follows:

  • Full Potential Analysis: an in-depth review of a cross-section of units was used to provide a factual basis for robust discussions with operational management.  Lean process-mapping techniques were used to identify waste in all key factors and analyse the customer experience, benchmarking this against market data and analysis of customer feedback data for key customer profiles.  Operationally, the ability to perform against a range of parameters given the fluctuation in customer profiles at different sessions within the week and different day-parts within the sessions was critical to challenging and re-designing the operating model.
  • Proof of Concept: development of a new Target Operating Model for 3 generic outlet types, including back-of-house layout, equipment specifications, front-of-house layout, revised customer experience, and management and staff training.  Measurement of key results against targets set following Full Potential Analysis.  Fine-tuning of Target Operating Model prior to final, Roll-Out phase.
  • Roll-Out: communication and training to central services including Menu Development, Procurement and Estates as well as Regional and House Management.  With houses on a target 3-year redevelopment cycle, the new Target Operating model was rolled out on a region-by-region basis at over 100 units per annum.

Results

20
%
uplift in EBITDA
  • Improved service levels and table turns
  • Increased revenues per customer
  • Reduced labour costs (front- and back-of-house)
  • Reduced back-of-house footprint
  • Reduced capex
  • Optimised day-part management

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