Industry Update
Opinion Article14 October 2021

Lean 6 Sigma Tips for HORECA

How can 6Σ be applied in HORECA business? Let’s dive in!

By Canberk Genç, Sustainability - Founder at Rural PM

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Whether it is a hotel or a restaurant, small details matter a lot when it comes to dealing with client satisfaction — which has multidimensional measurements and ways of reading its interpretations. One thing is for sure: When HORECA service orchestration lacks rhythm and meticulousness, the situation gets cloudy very fast and eventually this can push your business to the brink of closure.

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People around you may not feel it is a priority to evaluate how service orchestration affects results, or how the value stream design can cause a big and hidden waste, repeatedly. If this is the case, it would be a good time to introduce sharp ideas to help your partners understand why evaluating these aspects is crucial.

Implementing Lean 6 Sigma to your HORECA business can bring substantial and sustainable improvements. Client and value centric organizations are already aware of it for decades, because of its unique advantages compared to classical management approaches.

The perfection level that 6 Sigma is focusing on is 3.4 errors in 1 million repetition. Close to flawless.

The underlying idea of this approach is boosting operational excellence. Where Lean is persistence on diminishing waste (all non-value added processes and procedures) and promotes flow and work standardisation, 6 Sigma is determined on reducing process variation and improving process manageability. When both approaches are combined it is called Lean 6 Sigma.

Primary rule is simple: If inputs are manageable, outputs are also manageable.

So generally speaking, most of HORECA logic models are based on service in, and client satisfaction & premium voice of client out. Having this in mind and the Cost of Poor Quality (COPQ), decision makers should think wisely. Instead of taking decisions on assumptions and reacting to new challenges with fragile steps, HORECA professionals have to go with more precise approaches.

Cost of Poor Quality (COPQ) is the total amount of the associated costs that causes a negative impact on the value creation process. This includes all waste and variation to fix the issue, rework costs, as well as lost opportunities such as client defection or reputation damage.

Lean 6 Sigma could be one of the approaches to pick, since it has a proven reputation across almost all sectors. And it sets the bar very high which actually may enable you to shift your business transformation towards ultimate perfection not only to improve a bunch of scattered processes in your HORECA business, but also inject a deep strategy.

With this swiss-knife methodology that contains a vast group of tools and techniques to amplify productivity, reduce failure, variation and waste, you can deal with any type of situation.

Some cases with pain points to tackle:

Chaotic inventory management, Non-value added practices, Lack of strategy and originality on having a unique selling proposition, Unbalanced staff quantity vs work in progress level, Bermuda triangle between fluctuated profit margin, weak FMEA analysis, Uncontrolled supplier policies, No recycling philosophy, No Poka-Yoke approach to foresee and eradicate defects, No 5S implementation which may lead a mess in workplace, No statistical measurement and so on…

To eliminate these and many more, first taking a Gemba Walk would be a wise step. Observing and understanding what is going on in the value stream and its problems, ables us to draw the whole map of waste and variation. Thus DMAIC technique (or DMADV if the process is new) phases can begin officially with the push of this ´walk´. At the defining phase of the DMAIC technique we look for the following question: “What is the problem?”, “How should it be outlined?”

During this phase, all fundamental pillars like listed below, which formulate your business need a full revision.

Your business plan, current problem tree/s, your voice of customer report, feedback, client critiques, your SIPOC Analysis of how you manage your whole operation, KANO Analysis in which you prioritise initiatives, sales indicators, process capabilities, Push–Pull Strategy…

Since each case and business model have its own peculiarity, a revisit to the whole value stream is essential and fateful to find out what works and what doesn’t at your HORECA.

Here is a couple of ideas where Lean 6 Sigma can be applied:

Error minimization can bring order accuracy

Standardization reduces errors. Implementing a simple practice, like keeping your orders visually standardized, can instantly begin reducing mistakes around the workplace. And by doing this, you also add an extra value to the process by demonstrating service lead time progress.

Lead time of any service can give us many clues. Implementing production standards based on measuring client demands throughout the day can also help eliminate waste or no-value added delays. Strict controls over how long the plate is allowed to wait after it is prepared can also help improve the service accuracy.

Like in software testing, implementing a team discipline to prepare dishes ensures that more than one worker verifies the order is complete (like Definition Of Done) and corrects any errors before it leaves the kitchen counter. Standardized processes ensure that food is prepared properly and just in time to be delivered nicely to the table.

JIT

Inventory and waste management is the backbone of the kitchen.
Running a restaurant means keeping a strict control over the inventory and the waste. JIT discipline can help HORECA professionals to manage the optimum level between inventory, supplier relations and client demands. Any kind of sitting inventory excluded from the current WIP is the enemy. Small but intelligent batches, fast supply methods are the choice of JIT philosophy. Ingredients have to flow through the process only after being pulled by a downstream process. At the kitchen counter no one produces anything until requested. Along this discipline, 5S implementation can add an extra value bringing tidiness into a workplace such as in the kitchen where optimum use of the space is very necessary.

Testing new products — Do you think this dish can be a ´win´ on your menu?

When most restaurants introduce a new product, a new dish, they put it on the menu as a wait-and-see approach to see if the client’s attention is drawn rapidly. With Lean 6 Sigma approach, you would spot it easily through data analysis (or at your income statement after a while..) and you would make wiser decisions. This would allow you to test the feasibility of adding more meat options versus vegetarian options to your menu. Measuring the number of clients and average sale before and after the new product launch can give you a clear decision based on solid, measurable data. Data management is the key and always has been.

So..

Like in many business models, in HORECA, the analysis of what, how and why went wrong is crucial. For this reason, instead of starting with a bunch of hypotheses which lack data and statistical foundation, Lean 6 Sigma is a solid option to choose as a swiss-knife methodology, which offers quite firm management scope. Not only can you build a premium voice of the client base, but you will also build a more structured operation, and witness higher profit margins on a regular basis.

Times of crises are tough. Especially for the HORECA sector, where physical space and human interaction are key factors in its business models. So when you sit in your war room to find solutions among many strategies (Blue Ocean, McDonalds, Toyota..) that you are going to consider, don’t forget the importance of waste elimination.

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