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Tuesday, May 22, 2012

Slammed! Peak Period Woes

For months, a "Coming Soon" sign was in a store window at a busy strip mall. As time went on, the signs indicated a Peruvian chicken concept was coming to our neighborhood. Northern Virginia is blessed with many top quality rotisserie restaurants but they are located 10 miles or more from our village. As the paper came down off the front window, people were genuinely excited about the new addition.

The restaurant opened on May 11 to a throng of chicken afficianados. There was a line out the door when I drove by to check traffic. I decided to wait a few days to let the team work out the kinks. When I did go inside 3 days later, I just wanted a take-out menu. The manager said they had not yet received the menus from the printer but he gave me a website to visit.

We decided to try the chicken last Thursday evening at approximately 7:30 PM. There was a short line when we arrived and it seemed to be frozen. After I placed my order, I joined the family at the table. Around ten minutes later, a rack of chickens was removed from the oven and prepped. Workers quickly filled the orders and called out numbers. We were last to be served.

I noticed the cashier explaining to people in the order line there would be a delay of one hour. The oven was rapidly restocked by the production person. Every single person in the line left. It was now close to 8:00 PM and this is a military town where many workers wake up quite early. As we ate our meal, I noticed more people going to the cashier and receiving the bad news. Using a modest check average estimate, I watched as over $400 of revenue was lost.

We finished our meal and decided to take care of some shopping in the vicinity. At 8:50 PM, my curiosity drew me back to the restaurant at the time the chickens were ready for service. The perfectly cooked birds were transferred to the warming bin since there were no more patrons.

During my meal, I checked out the production capacity, the storage space, the dining room layout, the space devoted to walkways and I sketched out a optimum gross profit estimate. The number one constraint is the rotisserie oven. They purchased a 20 bird model. This is a family operation and I believe they are all in with respect to their personal funds. The entire space is tight with the dining area claiming 50% of the square footage. The oven is sandwiched between the range and the warming bin. Workers have very little space and frequently run into each other.

Since I wasn't around for the early dinner period, I can only project the oven limitations cost even more lost revenue.

So we have a family trying very hard to serve as many patrons as possible with the assets they were able to assemble with limited funds. This is a classic constrained optimization model. Cost accountants love these type of puzzles. How could they produce the chickens needed for the 7:30 PM shift and avoid cooking the unnecessary birds for the low after 9:00 PM volume?

Someone should have been counting the lost revenue at 8:00 PM. Perhaps a person could be stationed at the door to explain the 100% fresh production policy and to offer a coupon for a future meal. The production team should be trained to stop fully stocking the oven late in the evening since very few guests will return to have dinner at 9:00 PM in this neighborhood.

I would purchase a large digital time piece for the front window. Every time the chickens start their 1 hour journey from their raw marinated state to the fantastic mouth watering perfection, the clock could be reset. Patrons could drive by and check the clock. There are plenty of options for a would be patron. There is a large super market, a big box department store and lots of small shops. Orders could be taken ahead of time and the clock could be set to 2 hours if they completely sell the next round.

Communication is key. Many of the visitors were frustrated with the lack of chicken. At least they could avoid the wasted time parking their car and standing in line only to find they would not be able to purchase a meal for the family.

I intend to continue my observations this summer. In the long run, I believe the space can be reconfigured to create a higher volume take-out only operation.

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