Transforming a Close Insolvent Company to Cash-Flow Positive
Started in 1953 when the founder, Mr. Lim Heng Kuan opened his first coffee shop along Bugis Street and named it WANG JIAO, literally meaning “Prosperous Corner” in Chinese.
The shop prospered with its servings of deliciously smooth and aromatic home-made kaya, fragrant grilled bread, perfectly soft-boiled eggs, full-bodied fresh brews of coffee and tea, and warm service.
The business was then handed down to his grandson, Mr. Lim Jit Fuan, who decides to expand the operations through modernization of business format and management style.
In 2008, it was a challenge for Wang Jiao to maintain positive cash-flow on many counts. Prices of supplies were never fixed; the food costs often cross over the targeted percentages; many months of payment to suppliers were overdue.
Labour expenses were on an all-time high with a high staff turnover; it was a challenge to recruit and retain good staff, as well as ensure product and service consistency.
With stiff competition from existing and emerging competitors in the coffee and toast scene, Wang Jia needed to do a complete overhaul of its operations in order to get back on track and grow its business.
In 2008, Steven and his business partner were invited to acquire the business. Together, they orchestrated the revamp of the company’s re-branding to Wang Café Group and led the company to new heights.
Recruiting a Competent & Committed Management Team
Relying on his past contacts and friends’ recommendations, Steven assembled a team of 11 managers to form the Wang Café management team. He meticulously trained and guided the team to perform the various day to day operational matters effectively and efficiently. Steven tutored the management team to be conscious of labour costs, and guided them to train workers to be more productive, so that labour scheduling was easier and more cost efficient.
Redesigning Work-flows with Impeccable Foresight
Steven re-designed the various work-flows in Wang Café for greater efficiency. Leveraging on technology, Steven steered the company to use an electronic Purchasing & Inventory (PI) System. He persuaded the various suppliers to partake in the PI system and fine-tuned the various stock ordering and receiving procedures. Steven also negotiated for better credit terms and delivery cycles with suppliers so as to minimise shortage of supplies and maximise cash flow for the company.
Leveraging on IT – to Increase Productivity & Efficiency
Steven spearheaded the revamp from cash registers to the more sophisticated Point of Sales (POS) machines. He partnered with technology companies to develop POS systems that were customised to Wang Café’s operational work-flows. To ensure the older generation and not so IT–savvy rank and file workers were able to use the new POS machines, Steven led the development of “experiential” and “activity” based training.
Within a short span of 3 months, all staff were able to use the POS system and the PI system (on tablets).
Leveraging on IT – to Achieve Target Food Cost Percentages
Integrating the POS and PI together, Steven was able to tightly control the yields and wastages, thereby lowering the food cost percentages to below the targeted 25% and increasing profits. The revised workflow also resulted in an increase in work satisfaction and productivity from the management team as well as rank and file team.
Championing Industry-Specific Training
More importantly, Steven believed in industry-specific training. He developed the Training Needs Analysis (TNA) for the company, and monitored the development and implementation of the training plan with clearly defined objectives specified to meet the company’s training goals.
To ensure the effectiveness of the training programme, Steven and his team constantly reviewed and analysed different levels of outcomes. The team developed action plans to work on areas of improvement, with the aim of maximising the effectiveness of the training programme. Steven was personally involved in the training of the team.
In a short span of 1 year, more than 80 staff were trained with more than 410 SOAs achieved. In 2010, WDA recognised Wang Café’s training efforts and Wang Café was nominated as a finalist for the WSQ Training Excellence Award.
The Results: A Cash-flow Positive Wang Café
By doing a complete operations overhaul and rejuvenating the brand, Wang Café grew from 3 outlets
to 26 outlets and counting within a short span of 2 years.
Undoubtedly deemed as a promising business entity, Wang was sold for a tidy profit through a business acquisition.
Kidzania (Kuala Lumpur):
Building 8 Vibrant F&B Concepts in less than 41 Days
KidZania Kuala Lumpur is an indoor family edutainment centre which offers an interactive learning and entertainment experience for kids in a kid-sized city to deliver the first-of-its-kind edutainment fun. The KidZania experience is about real-life experiences, empowering, inspiring and educating kids through role-play.
With KidZania Kuala Lumpur being the 3rd KidZania state in South East Asia and the 11th in the world, KidZania – The City of Kids continues to evolve with new and improved facilities, activities, operation and content every time.
The Kizania team needed a management team who has strong experience and domain expertise in managing F&B outlets in themeparks.
There are definitely F&B operators out there who possess the know-how to manage F&B outlets; but not many know how to manage F&B operations in themeparks.
F&B themepark operators require the knowledge, finesse and precision to develop:
- F&B concepts that are operationally-efficient and profitable in themeparks.
- fine-tune and enforce Standard Operating Procedures (SOPs) that are suited for F&B themepark operations.
- Creative yet profitable menus that appeal to children and adults alike.
Recognising contributions at Sunway Lagoon (F&B), the KidZania Team invited iFi Consultancy (“iFi C”) to develop & manage the F&B outlets in KidZania.
Developing & Setting up 8 Vibrant Concepts
The iFi C Team designed 8 snazzy F&B concepts from scratch that are unique and are perfectly suited for the target audience:
- Candy store
- Damakan Japanese & Korean Food
- Main Square
- Parents’ Lounge
- Ice Cream Shop
- Zuper Burger
Figure 1 – Zuperburger
Figure 2 – Bakery
Figure 3 – Main Square
Figure 4 – Big Cup Coffee
Figure 5 – Ice Cream Shop
Figure 6 -Italian Shop
The beauty about these F&B concepts is this: from the interior design to the equipment to the layout specifications – every single element and detail is purposefully designed and customised with the children in mind.
Beyond aesthetical design is the need to collaborate with the right contractors who has high ethical and professional working standards to set-up the outlets. The iFi C Team partnered with a professional team of contractors, working around the clock to complete the set-up of the outlets in less than 41 calendar days.
Designing Kids-Centred yet Profitable Menus for the F&B Concepts
The purpose of menus is to entice the taste buds of the target audience and most importantly, ensure profitability and operational-efficiency. The menus engineered for the 8 concepts have achieved the said purpose.
The above could not be achieved without succinct SOPs that are fine-tuned till they are easy-to-follow by all staff. The careful selection of raw ingredients also helps to shorten the food preparation process by multiple steps.
Recruiting a Competent & Committed Management Team
Relying on his past contacts and friends’ recommendations in Malaysia, the iFi C Team assembled a team of 3 managers and 2 supervisors to form the Kidzania mid-management team.
The iFi C Team meticulously trained and guided the team to perform various day to day operational matters effectively and efficiently. This includes monitoring food and labour costs, ensuring that the SOPs are adhered to and labour manning is managed for greater productivity and efficiency.
Their efforts paid off. The team was lauded for outstanding customer service, food quality and cleanliness standards by customers and the media alike.
Leveraging on IT – for Smart Remote Management
The challenge for an overseas-based top management team to oversee the operations in KL is resolved with the use of information technology, such as a web-based Point of Sales system, CCTV systems and cloud-based storage systems.
Through these ingenious systems, the top management team is able to communicate with the team effectively and monitor the operations around the clock.
Solid experience in F&B theme park management has contributed to iFi C’s phenomenal results at Kidzania. The team was able to commence operations in less than 41 calendar days since the contractors started work on the F&B outlets and the 8 F&B outlets have profitable ever since their inception.
Through the strong foundation built by iFi C, the Kidzania team achieved outstanding standards in terms of customer service, food quality and cleanliness, much to the enjoyment of the children and their parents at Kidzania.
Sunway Lagoon (Malaysia):
Increasing Sales by 320%
Sunway Lagoon is an amusement themepark with over 80 attractions spread across 88 acres.
It provides the ultimate theme park experience in 5 adventure zones — Water Park, Amusement Park, Wildlife Park, Extreme Park and Scream Park.
Park goers can explore the various dining options available at the theme park.
The Sunway Lagoon management team’s core expertise is in park management; not in F&B management.
Many factors contribute to the decline in decreasing revenue and profits. The food costs were poorly managed, exceeding its target percentages on a monthly basis.
Staff were unmotivated to perform their job roles; service crew did not prepare the food as specified in recipes, resulting in providing to customers food of inconsistent quality.
The outlets’ interior design and concepts is unattractive and backdated; park goers were not patronising the outlets.
Moreoever, there were are high number of pilferage cases, which includes cashier theft and inventory pilferage.
The Sunway Lagoon management team issued a call for proposal to F&B operators for the management of F&B operations in the theme park. iFi Consultancy (“iFi C”) was one of the companies who bid for the project.
Impressed by its strong domain expertise and experience in the F&B industry, the Sunway Lagoon management team awarded iFi C the contract to manage all F&B operations at the theme park. Upon winning the contract, iFi C proceeded to execute the following:
Conducting Comprehensive Food Cost Analysis
iFi C team conducted an in-depth food cost analysis on all food and beverage items. They revised the standard recipes as well as changed ingredients and/or suppliers where necessary to bring down the food costs to their target percentages.
As Sunway Lagoon is host to global events, iFi C developed and implemented Standard Operating Procedures to provide catering services for mega events and staff meals.
Giving F&B Concepts a Total Facelift
iFi C revamped the interior design for all F&B outlets and redesigned the outlets for optimal operational efficiency and aesthetic appeal. The team introduced Western, Chinese, Malay and Indian cuisine in a myriad of settings – kiosks, cafes and restaurants that appealed to the masses. These F&B concepts are theme-based to complement the theme park environment.
Developing & Implementing a Staff Retention Programme
With the aim of retaining committed and competent staff, iFi C developed and implemented a performance appraisal system and compensation and benefits system. This performance appraisal includes evaluating staff work performance based on tightened job specifications.
When staff are recognised for their exemplary contributions to the company, their commitment, motivation as well as productivity levels increased drastically.
Developing & Implementing a Robust Manage Loss Prevention Policies & Procedures
iFi C developed and implemented policies and procedures to manage loss prevention at different areas, such as Point of Sales operations, modes of payment, exchanges, refunds, voids, etc.
The team installed security cameras at strategic locations to deter theft and inventory pilferage.
To reduce food spoilage, the team also trained staff to prepare food as specified in the standard recipes and adhere to receiving and storage procedures.
To ensure that loss prevention policies and procedures are being adhered to, iFi C conducted intensive audit exercises. The audit exercises also serves to evaluate and revise the policies and procedures to maintain pilferage losses to a minimum.
With the proposed solution to revamp the systems and infrastructures of targeted areas in the F&B operations, iFi C achieved the following at Sunway Lagoon:
- Increased sales by 320% within 4 months
- Provided staff meals & catered for functions/events (up to 50,000 pax a session)
- Redesigned multiple F&B concepts to complement the theme park environment
- Achieved 90% staff retention rate
- Maintained pilferage losses under 1%
Increasing Profits from 24% to 104% within 6 months
Freshly cooked is the name of the game. Fresco is Jaya Grocer’s introduction of the ‘grocerant’, which stands for both grocer and restaurant.
Located at various Jaya Grocer outlets, Fresco brings out contemporary style and wholesome cuisines from its freshest produce.
Multiple factors have caused the decline in productivity and profits for Fresco.
For one, the food preparation process entails multiple steps that is time consuming, tedious, and not to mention complicated. Customers have to wait for at least 15-20 minutes before the food is served, resulting in an increasing number of complaints on this aspect.
As the staff were not well-trained in implementing the standardised food recipes (i.e. Standard Operating Procedures), they were not able to produce dishes that were prepared with high quality standards. Staff were not trained in delivering top-notch customer service to retain customers as well.
During the day-to-day operations, the staff were struggling with manual processes. When productivity levels are on an all-time low, it inadvertibly impacted Fresco’s staff work satisfaction and morale.
Re-engineering Menu for Productivity & Profitability
The iFi Consultancy (“iFi C”) team conducted an in-depth analysis on Fresco’s menu, in terms of the food costs for each menu item as well as the menu design.
After much deliberation, the team agreed to remove items that incur high food costs. The team also revamped the entire menu design, repositioning high profit items to attract customers’ attention.
The team also relooked into the standard recipes to streamline and simplify the food preparation process.
Developing & Managing a 100% Efficient Central Kitchen
To increase productivity & operational efficiency, the iFi C team developed and implemented a central kitchen. With a fully operational central kitchen, the Fresco team onsite is able to prepare foods more efficiently and promptly, delighting the customers by serving food in double quick time.
Developing & Implementing a Company-Specific Training Programme
Delving into a comprehensive Training Needs Analysis, the iFi C team proposed a training programme for staff, focusing on customer service, standard recipes and IT. This training programme aims to meet the training gaps identified during the training needs analysis.
The iFi C team proceeded to develop the training programme. It was rolled out in phases and conducted during the outlet’s non-peak periods.
Leveraging on IT – for Large-Scale F&B Operations
The iFi C Team introduced a revolutionary Enterprise Resource Planning (ERP) System, effectively integrating the Point of Sales (POS) and Purchasing and Inventory (PI) system. As this is an industry-proven web-based ERP system, it entails the effective reduction of the workflow processes.
Initially resistant to the use of IT systems, the staff found themselves enjoying the use of IT when they attend bite-sized training sessions that are interactive and catered for the learners’ profile.
Beyond increasing productivity levels, the IT system enables the Fresco management team to access to critical reports real-time and gain added business foresight. Critical data can be accurately synced across all outlets, enabling flexible business expansion.
With the proposed IT solution and operations overhaul that iFi C has implemented for Fresco, its profits have increased from 24% to 104% within a short span of 6 months.
The staff have found the training programme to be useful and were able to effectively apply the skills and knowledge that were acquired during training to the workplace.
The managers and supervisors have also noted a marked improvement in staff productivity levels of 112%.
Ever since the staff received customer service training, the managers received an average of 2 compliment letters a month.
Being equipped with the skills and knowledge to excel in their jobs, staff’s work satisfaction levels have increased, resulting in an 86% decrease in staff turnover.
Backed by a complete operations overhaul and a solid ERP system, Fresco is well poised to handle larger-scale operations and achieve its Grand Vision to be the leading grocerant in Malaysia and beyond.