Improving restaurant productivity
Introducing service engineering

Takeshi Shimmura, Ph.D.

Concept
Tradition and CraftsmanshipCorporate Introduction■ Name : Ganko Food Service co., ltd■ Established : Apr, 1963 in Osaka city
■ Business Category: Management of restaurant

Production and export of food item
■ Employees : Approximately 4,000 (include part timer)■ Sales revenue : ＄300 million （US）
■ Stores : 100

Business environment of Japanese restaurant industry

■Chain store management system
・Eating out was luxurious leisure because restaurant was expensive
・Chain store system realize low price restaurant.
→Eating out has become popular leisure since 1970’s
Central Kitchen

・to reduce cooking staffs at each restaurant store
・to reduce kitchen equipment at each restaurant store
・to stabilize quality of food products
Multi store operation
・to reduce ingredient cost by volume purchasing
・to reduce investment cost by volume construction

Simplification of menu and service
・to reduce labor cost by introducing part timer
・to reduce total kinds of operations at store

■Growth of Japanese restaurant industry

In 1969, Japanese Government permit foreign companies to invest
in the Japanese restaurant market
In early 1970’s, Innovative Japanese restaurant companies introduce
chain store management system

Billion Yen
Fig: Market size of restaurant industry in Japan
Japan Food Service Association (20113)

■Key Industry
As the market size of restaurant expand, the restaurant industry has
become one of the key industry in Japanese economy

Billion Yen
Fig: Market scale of industries in Japan
Japan Food Service Association (20113)

■Service Economy

1990

2004
(2003: Japan, U.S.)

Japan

58

68

U.S.

70

77

England6373

Germany

61

70

France70

76

China

3141

India

4152

Korea

5056

Singapore―65

Thailand5046

World Average

616873%(2009)（%）

■Changing Market Environment
Demand side“Diversification of customer taste”
・Customers have experienced various types of restaurants
・Therefore, customers have become “well-experience”, and theirpreferences are very diverse

HealthBeef
Taste Fast

SteakPork

Chicken

Salt

High

Fond de Terivahu yaki

Middle Low

■Changing Market Environment
Supply side“Market has become Competitive”

■Sluggish Japanese economy

・Japanese GDP had been increased for more than a century
・“The burst of bubble economy” bring sluggish economy
・Further, economical and natural disaster hit Japanese economy
The Lehman’s ShockBillion Yen

Burst of“the bubble economy”

YearHuge Earthquake

■Japanese restaurant business in recent years
・In1990’s, revenue-growing stop, and gradually reduce in recent years∵Overstores, Reduction of Population, Long-Term Deflation
・Most critical reason is customers’ change in taste

Billion Yen
Fig: Market scale of restaurant industry in Japan
Japan Food Service Association (2011)■Reduction of population
・Japanese population start decreasing since 2006
・Aged people increased, and young people decreased
・Industrialized countries face the same problem as well as Japan

■The crisis of the traditional restaurant
In Japan, the market scale of the traditional Japanese restaurant
has been decreasing for several decades.
Customer’s preferences have changed for decades.
In contrast, traditional restaurant persist to provide traditional(out of date) cuisine.
→The traditional restaurant should bring the taste and dishes
up to date for current customer

Fig: Transition of total of traditional Japanese restaurants
Ministry of General Affairs (2009)■Summery◇Changing market environment
・As market size expand, restaurant industry has become competitive
・Customer preferences has become diversify. Therefore, Chain store
system (Simplification) should be advanced to adopt customer change◇Market shrink
・long-term depression and deflation bring reduction of average customer
budget and frequency of eating out
・In recent decades, customer prefer western style, therefore,
market size of Japanese traditional restaurant shrink rapidly◇Changing social structure
・Reduction of population will bring further restaurant market shrink
・Reduction of population will also bring labor shortage because
restaurant industry is a labor intensive service

Management Strategy-How to maximize add-value?-■The concept of management strategy

Add Value
Productivity =Labor Input→Our main focus
for management strategy

Add Value
Productivity =Labor Input→Our main focus
for service engineering

How to increase add value?
・not high price, but new value will increase add value
・create and offer new style Japanese cuisine for customer
・Craftsman-based production, but realize reasonable price■Combination of contents-a way to create new value-

Nishijin textile and Italian Bag

Iron plate and Stationary

Event and Tea Ceremony

Yuzen textile CG technology

■Combination of restaurant and culture-creating new value for customers◇General trend －Simplification
・In general, restaurant simplify food and service to improve productivity◇Our way －Combination
・Our company try to combine restaurant and Japanese culture tocreate new value and improve productivity

Restaurant and culture

■How to differentiate from competitor?

Combined
Restaurant

Traditional
Restaurant

Value
Chain Store
Restaurant

Price■Combination of food “Sushi and Kaiseki”-how to create new style Japanese restaurant? 50 years ago-Combine sushi and Japanesetraditional cuisine

Combine Sushi and Retail Business
Introduce big showcase to show
Ingredients to customers
Indicate fixed prices to customers(Sushi was clseed price before)

■Combination of craftsman and central kitchen-how to realize high value and reasonable price-

In the restaurant industry, which involves both manufacturing and sales elements, theoptimization of procedures is crucial in improving productivity. Production procedures
need to be optimized in both hardware and software.

■Combination of restaurant category- How to minimize break even point? 1st floor is better location for restaurant,Rent cost of 1st and top floor is highRent cost of middle floor is low→Lease whole building for cost levelingSome restaurant category are required
to operate building as restaurants

Investment cost for Japanese restaurant
is high because of construction anddecoration work
→Combines self investment and landlordinvestment to minimize cost
High revenue per square meter isrequired to call in landlord investment∵Lease cost is commission fee

■Combination of Japanese style restaurants-how to get wide range of customerSushi

Japanese restaurant

Fine restaurant “Ryotei”

Japanese noodle

Casual restaurant

Okinawa Cuisine

Printer

Printer

Party
Room

３Ｆ

ＰＯＳ
Transmission
MgrHandy Device

Kitchen

HUB

Table

HUB

ＰＯＳInternet

Printer
Wireless

HUB

Transmission

２Ｆ

Printer
DisplayManager
Printer
Handy Device

VPN
looterPrinter
Printer

Kitchen
HUB

Table

Hall

Printer

Transmission

Handy Device

Manager

Wireless

ＰＯＳ

Display

PrinterCounter
Printer

二重化

Figure: structure of POS System

Printer

１Ｆ

■Combination of restaurant category- How to minimize company risk ? In order to accommodate some characteristic of the company’s business, ourportfolio consists of a mixture of businesses.
・Seasonal fluctuations are significant (summer 1 : winter 1.5)  highly volatile business・Main ingredient is fish  cost ratio of raw materials is high, and it is difficult to secure a stablesupply・Complex facilities ＋prime locations  ratio of fixed cost is highJapaneseCuisineTonkatsu(FriedTofu
Bean CurdJapanese
noodleOkinawa
CuisineSeasonal
Fluctuation

H(winter)L(summer)constant

constant

constantL(winter)H(summer)

Ingredients

FishExpansive
instable

Pork
Not soexpensive

BeanLow
StableWheat
Low
StableBean, Pork

Investment
CostHighLow

Low

HighLow

■Management strategy for add-value

BusinessEnvironment

Management
Strategy

Investment

LandlordCompetitor
Over Store

Combination for add value
Restaurant & Culture
Sushi & Japanese Cuisine
Craftsmanship & CK

OwnfundBusiness
Portfolio

Value forcustomer

Introduction of service engineering
How to realize efficiency?

■The concept of service engineering

Add Value
Productivity =Labor Input→Our main focus
for management strategy

Add Value
Productivity =Labor Input→Our main focus
for service engineering

How to minimize labor input?
Characteristics ofservice

Required technology

Service optimizing
loop

Intangibly
Simultaneity
Heterogeneity
Perishability

Visualization of service
Constant monitoring
Human oriented design
Support service field and staff

Observation
Analysis
Designing
Application

■The concept of Service Engineering
Center for Service Research introduce the concept of “service optimizingloop” to enhance productivity of service industry. CfSR develop newtechnologies to form the loop

Observation

Analysis

Application

DesigningMeasurement of service operation at restaurant
Using RFID device, sensors, and 3D-CG technologies

■Concept of the system
Create 3-D CGPictures of the restaurant

Picture3DCG

DataOperation

ReplayMeasurement ofOperation by sensor module

Visualization

■3-Dimention CG

Pictures

Local Modeling

Global Modeling■Measurement of operation
・Portable sensor module is developed to measure track of staffs
・The sensor usually transmit location information to the server
The server record data to replay transmission of the staff

Voice recorder and bone conduction MIC

Portable sensor module

・VTR is placed at kitchen and hall to measure operation of staffs

■Visualizing operation

Files

Automatic process

DataHandwork process

Output data

3D ModelOperation list

VTR picture
Dictionaryunknown data

Correct data

identify
operation

operation

Dictionary

Registration

operationlocation

location

Basic action

Basic action

Voice data

Voice data

Kind o ofoperation

Kind o ofoperation

Learning Phase

Estimating Phase■Display of the system

Indicate
Operation data

Indicate
POS data

Indicate
VTR picture

Indicate time line
and operation

ControlAnd
Handling

■Results of the service operation improvement by QC circle
・The system introduce restaurant store
・QC circle try to increase performance using the system
・Results shows staff increase performance
they can grasp bottleneck of service operation by the system

55.0%50.0%
45.0%
40.0%
35.0%

11時
12時
13時
14時
15時
16時
17時
18時
19時
20時
21時
22時

30.0%

Before
1回目
After
2回目

Improving Labor Productivity and Labor Elasticity
Using simulation and introducing cell production system

■The problem of conventional production system
10.00 11.00

Time12.00

13.00

14.00

15.00

762

1

OrdersAdded Value04

steamerovenLabor griller
Input fryers→20

Productivity

0.56
20/36
unproductive

Sushi
SashimiWork hours

666666→36

■The Objective of introducing cell-production system
10.00 11.00Time

12.00

13.00

14.00

15.00

7621Orders

Added Value

04steamer
oven
Labor griller
Input fryers→20Productivity

20/27
cell

Sushi
SashimiWork hours

666621→270.75(0.56)

■Structure of the system

Store
Record order information (Demand)

Headquarters
Data server

Order time
Order number
DB

Download

LayoutDB
Operation DB

Record cooking operationand kitchen layout (Supply)

Simulator

■Database of cooking operation

商品名

お造り膳
仕込6901

切断

PREP
WASH

調味TASTE

HEAT

6902

GAS GRILLER

電子レンジ

MICROWAVE

スチームコンベクション

CUT

DRINK

Ｍ１

Ｍ２

Ｍ３
12OVENガスグリラー

STEAM CONVEVTION

フライヤー

FRIER

ガスコンロ

GAS STOVE

電磁コンロ

ELEC STOVE造り（人）SASHIMI

50

寿司（人）

SUSHI

40

寿司ロボット

飲み物

Machine Group Field

洗浄Ｊオーブン

加熱

Step Name100

SUSHI MAKER

ビールサーバー

BEER SERVER

酒燗器

SAKE WARMER

ショットメジャーSHOTMEASURER

ドリンク（人）

DRINK

盛り付け

6903

SERVE30

配膳調理

6904

DISHUP１20

DISHUP２

15配膳■Database of kitchen layout

Id（機器名称SUSHI-01
SINK-01
ICE-01
SINK-02
SINK-03
WARM-01
OVEN-01
IH-01
ICE-02
NUDLE-01
RICE-01
SINK-04
IH-02
WARM-02CABIN-01
REFRI-01
SHOW-01
CABIN-02
WASH-01
TABLE-01

Xdim（中心3.67125
12.375
4.5
12.375
6.1875
3.15975
3.7125
2.508
4
3.135
3.135
4.95
2.508
6.31125
9.9
9.9
9.9
9.9
5.775
8.25

Ydim（中心3.67125
3.71253.67125
3.7125
3.3
3.15975
2.92875
2.84625
8.5
4.785
3.135
3.3
2.84625
4.95
3.3
4.95
5.36252.97
5.3625
4.95

Xpos（大きさ
5.513.7362522.5
3135.74825
26.88675
16.77225
20.6745
4.3
6.02251.485
6.72375
6.8
2.64
1.65
5.775
2.64
6.765
-5.5605
1.3695

Ypos（大きさ1.85625
1.85625
1.85625
1.85625
6.80625
5.94
11.83875
11.83875
16.2525
19.32975
20.02275
23.42175
27.3
25.17933.28875
33.28875
43.18875
43.18875
55.38225
55.539Xdir（向きYdir（向き0000-1
000
1
1-1
1
1-1-1
1-1
100

1
1
1
10
1-1-1
0000000000-1-1

■Layout planning by using the system

・Restaurant often plans kitchen layout
based on experience of planningstaff or matured chef

Elevator

・Even skillful chef or planner
experience less than 1,000
restaurants planning→Can they realize optimal layout
based on experience only?

Staffs
1st floor

Cookingmachines
6th floor

・They can evaluate layout planningand discuss optimal kitchen layout
before construction or renovation→They can improve kitchen planning
using both experience and system

■shift planning by using the system
Time→

Cooking position→
Matters of operation

■Introducing cell production system

When restaurant order is simple, a chef cooks various kind of dishes
at a cell cooking position
The production system work well because of multiproduct restaurant;
they hire cross trained chef

■Point diagram between revenue and work hour

Work Hours
RevenueRevenue

Fig: Line production

Fig: Cell Production

■Statistical results
Line Production

Cell Production@

1,707,000
Yen/Day

1,661,000
Yen/DaySD

347,000 Yen

304,000 yen@

137.7h/Day

116.0h/Day

SD

16.2 Hour12.2 Hour

0.44

0.69

Revenue

WorkHours

Correlation

■Practical service optimization loop

External Data
Head quarter

Innovation of service
Strategy／Top Executive

BayasianNetwork

StatisticalAnalysis

Redesign service contents
Tactics／manager

Accounts

Optimize demand and supply
Operation／staffs

Simulation

Qualitative
analysisLabor scheduling
Purchase Management
Service designing
Menu designing

StoresInvestment
Business model
POS system

Staff debt
recognition

Labor control
Buying control

LayoutScheduling

Forecasting■Conclusions◇Service innovation

Add Value

Management Strategy

Labor Input

Service Engineering

Productivity =◇Combination of value and efficiency

Co-create

Restaurant (Donor)

Customer (receptor)

Enhancing by Vehicle
Multiplication of service

■Synthesis and cooperation of service study

Observation

Application

Cooperated
Service engineering

Analysis

Designing

ServiceInnovation
ServiceScienceServiceManagement

Thank you for your attention