The complexities of running a food commissary or central kitchen can be daunting — and expensive.
Ordering too much of an ingredient here, too little there, may not make much of an impact on the bottom line on a given day.
But multiple those discrepancies by 7, 30 or 365, and it becomes clear that being organized and detail-oriented is essential to business success. Fortunately for operators, suppliers of production management and other software can do much of the job for them.
When Bronxville, New York-based At-Your-Service Software Inc. launched its CostGuard food costing software, the company knew that restaurants and other foodservice operations would be a strong target audience for their product.
Grocery stores and the commissaries that supply their in-store departments weren’t front and center, says Matthew Starobin, the company’s CEO. That changed quickly, though, when At-Your-Service landed a contract with a retail chain in the Western United States.
“Stores are the business we didn’t anticipate when we started out,” he says. “But we did such a good job, they really started to come our way. Now most of our customers who use it are stores. It could be as simple as sushi, soups, grab-and-go or ‘I need to make 100 sandwiches today.’”
CostGuard provides a full range of production management and other services, including recipe costing, menu engineering, inventory control, nutrition and sales management.
CostGuard instantly costs and recalculates recipes and menus, suggesting selling prices based on global and category targets. With the software’s engineering reports identifying “winners and losers,” Starobin says, companies can more easily maximize sales. CostGuard also keeps a close eye on shrinkage, via alerts that show usage and shrinkage sorted by cost.
Commissary business, meanwhile, is a category where At-Your-Service has seen strong growth more recently, Starobin says.
“Five years ago we didn’t have commissaries as an option — now it’s on our website,” he says. “It feels like that business is really growing.”
Labor costs are one of the main reasons more stores are outsourcing work to commissaries, Starobin says. And that extra business makes commissaries turn to software like CostGuard to streamline their production management.
“I was just out in Jackson Hole, Wyoming, where getting labor is next to impossible,” he says. “They’re paying dishwashers $18 an hour. Businesses need to mechanize wherever they can to reduce manpower requirements.”
And it’s by no means limited to big companies, Starobin says. Expanding operations to just three to five units is enough to convince many businesses of the benefits of using commissaries, he says. And it’s not a hard sell to get commissaries to use CostGuard.
“If they’re calling us, they’re in trouble,” he says. “The more pain they have, the more likely they are to buy our software. These operators know the benefits. They do such big, big numbers, they can get into huge dollar amounts.”
One trend in the use of software for production management and other uses among retailers and commissaries, Starobin says, is a greater emphasis on systems integration.
“Even for users who aren’t too technically literate, what they’re very sensitive about and aware of is the efficiency of systems integration,” he says. “They get that when they’re doing labeling, or nutrition, pricing recipes over here, taking orders over there, that they have a mish-mash of all these systems. They know how much time it takes, and they’re getting wise to it.”
Software like CostGuard helps retailers and commissaries from “getting into a world of duplicate data,” as Starobin puts it.
“They’re more likely to succeed, to get ROI they can live with, if they don’t have to throw three people at one project,” he says.
Tampa, Fla.-based Restaurant Magic Software’s Data Central system allows commissary and production kitchen customers to prepare batches in anticipation of potential orders, or to fulfill orders and create batches as needed, says Greg Kingen, the company’s vice president of sales and marketing.
“Our system is a full food cost system to the ingredient level, so the PK or commissary can build the ingredients and subsequent recipes in our system,” he says. “They place orders to their ingredient providers electronically within our system, and receive those orders electronically as well.”
The Data Central system also can automatically generate suggested orders to food providers based on historical trends of past performance, Kingen says. And Restaurant Magic offers a full inventory system and a full suite of reporting and analytics to determine food cost analysis and other factors.
“Our solution is fully integrated to all other data sources within their enterprise — POS, accounting, payroll — and we provide scheduling and labor management across the enterprise.”
When it comes to trends, Restaurant Magic has seen more and more commissaries adopting a just-in-time philosophy, one supported by advancements in production management and other technologies.
“We’ve seen a larger portion of the industry only creating batches based on fulfilling orders as opposed to building it, and hoping the demand meets the production,” Kingen says. “Also, clients want all information available in real time, on any device, with access to all of the data and analysis tools provided in a simplistic UI.”
To meet those and other evolving customer needs, software providers need to be market-driven, Kingen says.
“We allow our clients to provide input into core functionality development,” he says. “There has been an increased need in being able to identify profitability, quadrant analysis of items being produced and analytical analysis.”
One of the features of Data Central is a dimensional cube analytics engine that can provide real time query analysis, with responses taking about three seconds.
“The questions that customers are asking are becoming more sophisticated and therefore we have continued to build more powerful analytics capabilities,” he says. “We believe that customers running production kitchens and commissaries have unique needs around full integration between systems and enhanced reporting capabilities.”
Those clients, Kingen says, have a need to keep a close eye on margins and overall profitability of any given item, and to be able to execute “what if?” scenarios as they relate to recipe ingredients as the market cost of items they procure has in many cases become more volatile.