Singapore's F&B industry players can learn much about boosting productivity from their Japanese counterparts
By Toh Yong Chuan, The Straits Times, 31 Oct 2013
CONVEYOR belt sushi may soon be a thing of the past.
On a trip to Tokyo earlier this month, I visited a sushi restaurant in the trendy Shinjuku ward that has done away with conveyor belts.
Diners punch in orders on iPads. Sushi is delivered to tables or bar counters on compact disk- sized trays that run on tracks. Customers pick up their orders and push a button which sends the trays back to the kitchen.
This cuts down wastage since food is prepared according to orders. In a conveyor belt system, sushi is prepared in anticipation of demand. Items not picked up are discarded after some time.
There is a self-service payment system which reduces labour as there is no need to count the colour-coded sushi plates for the bill. A restaurant manager told me it takes five staff members to run the 30-seat restaurant the size of a four-room HDB flat, two fewer than if conveyor belts were used.
The Japanese, who invented conveyor belt sushi, are ditching old methods and adapting new ones to boost productivity.
It set me thinking: How do Singapore restaurants fare?
Restaurants here have been singled out for their over-reliance on foreign workers. Hence, they are feeling the effect of the foreign labour curbs.
Official data from SPRING Singapore, the government agency that spearheads the productivity drive in the small and medium enterprise (SME) sector, shows that the value-add of each food and beverage (F&B) sector worker - a rough gauge of profitability - was about $21,400 in 2009. This lags behind cities such as New York, London and Hong Kong.
But what surprised me during the productivity study trip, organised by the Singapore Chinese Chamber of Commerce and Industry, was a meeting with Dr Takeshi Takenaka, a researcher from the Centre for Service Research at the National Institute of Advanced Industrial Science and Technology. He said in a talk that the labour productivity of restaurants and hotels in Japan is the lowest across various sectors. It is roughly half that of the finance and insurance sector.
Japan, like Singapore, is also battling low productivity in the F&B sector. But while both face the same problems, the responses differ.
To coax restaurants here into boosting productivity, the Government's preferred tool is automation and consolidation. Restaurants are given grants and subsidies to buy machines to do anything from making ice cream to washing dishes. They are also encouraged to use central kitchens to enjoy economies of scale. These are blunt instruments.
In Japan, however, I have observed after visiting restaurants and factories that there are at least three other methods of boosting productivity that hold lessons for Singapore.
Differentiation
FIRST, while the Japanese are still using automation to cut down on the use of labour, the focus is not just on standardising production or achieving greater economies of scale. It includes helping firms differentiate themselves from their competitors.
The sushi restaurant is one example. The automated ordering and delivery system was developed and patented by its owner Kyotaru.
Another example is the use of machines in food production. I visited Rheon, a company that produces two types of food-making machines - one that turns out products with fillings, like buns, and another that shapes dough into pastries. But its pitch to customers is that it will tweak these machines to churn out anything from mooncakes to cookies and French pastries, according to the customers' recipes.
Explaining this trend, business consultant Yukihide Shibuya told me that while standardisation and mechanisation were important in a growing food service sector like what Japan experienced up to the mid-1990s, the market is mature and slowing now. Differentiation is the trend.
Data collection
THE second lesson for Singapore is that besides automation, the productivity move in Japan is a data-driven, precision science.
Dr Takenaka cited an example of how the Ganko chain, which has some 100 restaurants, gathers extensive data from its daily operations to improve its services. It tracks everything from customer spending to how its patrons respond to different pictures on the menus. It even gives out radio frequency tags to its staff to track their movements. From the data gathered, it started a project of what it calls "reducing ineffective walk". This involves keeping staff in a smaller area to reduce walking. Dishes are brought out in a relay system.
Japan is not alone in collecting such data.
In the United States, this collection goes one step further. The National Restaurant Association and consulting firm Deloitte & Touche publish an annual Restaurant Industry Operations Report which spells out how restaurants are doing in terms of costs and earnings, according to the different types of restaurants and where they operate.
No restaurant is named, but the data is used as an aggregated benchmark to help owners know how they stand among their peers. In this way, they can make improvements in areas that they lag.
Such benchmarking studies are not done in Singapore. Firms can take steps to boost productivity, but without industry benchmarks, they can only rely on intuition to know if the measures are working. It is not an ideal situation.
Two years ago, SPRING Singapore conducted a major benchmarking study of the local retail and F&B sectors, comparing Singapore with major cities such as London, Hong Kong and Tokyo. The full study was not made public, and it is not known whether it also looked at how retailers and restaurants fared.
Perhaps the statutory board and Restaurant Association of Singapore (RAS) can consider working together to produce a similar report. Not only will it help restaurants know whether their productivity moves are bearing fruit, it will also give the public a better sense of whether the millions of dollars pumped into subsidies and grants are well spent.
Attention to detail
THE third Japanese lesson for Singapore is that productivity improvements can also be made in small ways.
It has to do with two ladles that I saw at beef bowl restaurant chain Yoshinoya's training school. During my visit, a trainer explained that the ladles used to scoop up the beef portions at all its restaurants have 47 holes each. The holes are designed to allow just the right amount of gravy to flow into the rice.
The ladles come in two lengths - one about 30cm, the other some 10cm longer. The reason: a taller person can use the longer ladle without having to bend his back.
I was impressed by the attention to such detail, and I wondered whether restaurants in Singapore give their taller chefs longer ladles too.
These three lessons from Japan are perhaps what the productivity drive here should also be about.
Even as the Singapore Government boosts automation and hand out grants, industry associations and government bodies can take big steps towards collecting and sharing data to help restaurant owners know where they stand among their competitors.
Restaurant owners can also take small steps that improve the work environment.
Such big and small steps, taken together, will give Singapore a better shot at lifting productivity in the F&B sector.
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