Beyond Inertia

In my experience, food cost behaves differently than the physical objects subject to inertia. A tightly controlled food cost stays in line through the efforts of "an outside force" (management). If the outside force is eliminated, the tight food cost will disappear as well.

An out of control food cost will tend to become a greater problem unless an intervention takes place. Leaving a problem alone will not maintain the status quo.

Management by exception provides a system for isolating sub-par performance and devoting resources to turn the situation around. Going back to the physics idea, the larger the unit in question, the greater the problem and the need for a solution.

It is wise to plan for the resources needed to troubleshoot problems in major operating units. Should you divert these resources to smaller issues at smaller units? Probably not a good idea.

Often the time and resources devoted to minor issues in an organization is disproportionate to the potential benefit. People talk of "the squeaky wheel" and often management by exception focuses too much attention on the smaller wheels.

Try to work on solving big issues first before you tackle minor problems.

This logic may be extended to single unit operations. In the high volume, single unit operation you'd be wise to focus on problems affecting major activities. Try to put the little annoyances in perspective.

You may find 80% of your efforts are spent on activities which can only capture 20% of the potential improvement. This is par in most organizations.

Design your reports to highlight major variances and provide comparisons and summaries which put all variances in proper perspective.


Click Here For More Information