Hospitality Management
Managing Quality in Food & Beverage Operations

The best-known approaches to managing quality propounded by the quality gurus such as Deming, Crosby, Juran, Ishikawa, Shingo, Taguchi and others started in the manufacturing sector. The tools and techniques used in manufacturing are well proven to be effective in these environments. Increasingly, attention has been drawn to the service sector and the particular challenges faced by companies wishing to pursue service quality but recognizing that the challenges can be quite different. The quality matrix described earlier illustrates the problem facing food and beverage operations. Not only must these operations deal with the manufacturing problems of the meal or drink production but they also have to act as a service operation. It is not surprising that the resulting complexity makes managing quality in food and beverage operations a difficult but not
impossible challenge. Looking at the characteristics of service operations that are seen to distinguish them from manufacturing (Fitzgerald et al., 1991), provides some interesting insights for food and beverage operations:

Intangibility: Unlike a ‘ pure ’service operation, food and beverage operations do not simply consist of the service performance and the intangible factors that affect this interaction. A large part of their hospitality consists of the very tangible product elements of food and drink. On the product side there are the tangible elements of the food or drink itself – How hot is the food? What does it look like? How cold is the beer? How large is the glass? etc. – but there are also the intangible elements of the atmosphere created – Does the customer feel comfortable, ‘ at home’, secure? On the service side, there are the intangible elements of the friendliness or care offered by the hospitality provider. At the same time it is possible to identify tangible elements such as the time taken to deliver the service or the effectiveness of the service performed – Did the waiter spill the soup? How long between the order and delivery of a cooked breakfast?

Heterogeneity: As service outputs are heterogeneous the standard of performance may vary, especially where there is a high labor content. It is therefore hard to ensure consistent quality from the same employee from day to day, and harder still to get comparability between employees, yet this will crucially affect what the customer receives. While a customer may expect some variability in the service received, the same cannot be true of the product dimension. A hamburger served by one unit of a restaurant chain at one end of the country must be consistent with every other hamburger served in every other unit of the same chain. The range of tolerance on the product side seems much lower than on the service side.

Simultaneity: The production and consumption of many services are simultaneous, for example having a hair cut or taking a plane flight. Most services than cannot be counted, measured, inspected, tested or verified before the sale for subsequent delivery to the customer. The product element of hospitality ranges from simultaneous production – for gueridon service, where cooking is done in the restaurant at the table – to decoupled production – for cook-chill or cook-freeze, where food is batch produced at a central location, cooled and then distributed for later consumption – with many other possible systems in between.

Perishability: Services cannot be stored, and so the buffer of an inventory that can be used to cope with fluctuations in customer demand is removed. Even a restaurant seat is a perishable product. Empty places cannot be stockpiled for a busy day sometime in the future. Once a restaurant seat has been left empty, the potential revenue from the occupation of that space is lost. From the product perspective, raw ingredients or a complete meal can be stored for a limited period depending on the method of storage. Normally, however, that period will
be a matter of hours and days rather than years. Food and beverage operations display many of the characteristics of service industries in general but with the added complication of a production element. However, even the production side of food and beverage is far from straightforward.

The cost structure: The need to provide the appropriate environment within which food and beverages can be delivered means that most businesses need a substantial investment in premises and plant and associated fixed costs. On the other hand, variable costs are low. This high fixed cost/low variable cost structure creates an unusual cost-profit–volume relationship. Generally, the break-even volume will be quite high. Exceeding this level will result in high profits, but low volumes will result in substantial losses. The number of hotel and restaurant operations that go bankrupt in their first years of operation bears forceful witness to this fact.

The unpredictability of demand: The cost structure issue would not be too difficult to deal with if it were possible to predict with confidence the levels of demand for the operation. Unfortunately, food and beverage suffer from complex fluctuations in demand. Demand will fluctuate over time – hourly, daily, weekly, monthly, annually and cyclically – by type of customer – group or individual, business or leisure – and by menu item. The result is a complex mixture of patterns that makes forecasting and subsequent resource scheduling, even with sophisticated software, still very difficult indeed.

The short cycle of production: The length of the food and beverage production cycle is short giving little time for monitoring or the correction of errors. A restaurant operation may well buy in fresh produce in the morning that is prepared during the morning, offered for lunch and consumed by early afternoon.

The risk: The food production process deals with raw ingredients that have a limited shelf life and that, if contaminated, can result in serious illness and death. A customer entering a food and beverage operation is placing themselves in the care of that host and the operation must employ all due diligence to ensure their safety. The customer must place their trust in the operation based on limited available evidence.

The technology: The food and beverage production system is labor-intensive but technological substitution is still possible in the back of house operations. Recent developments in catering technology have allowed the decoupling of production and service through the use of cook-chill, cook-freeze or sous-vide methods. McDonalds ’industrialized service delivery system ensures high speed, high volume with high consistency but over a limited product range and with limited human intervention.

● The presence of the customer: Throughout the complexity of the operations described above, the food and beverage operation is pressured by the physical presence of the customer, monitoring progress with the expert eye of someone who has eaten many meals before. Even in-home delivery operations the pressure of meeting the delivery time standard, usually thirty minutes, represents that customer’s presence.