Changes in Foodservice Resulting from

Management Information Systems

By George Stipe

April 27, 2012

Management Information Systems

Professor: Dr. Fish

The food service industry started in 500 BC with the [1]“Ta Dionisiaka” banquets dedicated to the God of wine in Ancient Greece and run up to present day. In the 1980s restaurant operators still used facsimile machines or phones to place orders. In the early 1990’s fax machines were starting to be cost effective. Then in the late 1990s and early 2000s personal computers took food service ordering to a new level.

The greatest advancement in technology in the food service industry started in the time period of the 2000s. These were the IT and web based technologies that revolutionized how restaurants do business. These new technologies have given restaurants a competitive edge they need to become more profitable. These technological advances address the five key areas of food service operations management: ordering, receiving, inventory, recipes, menus, and food safety.

Food Service Ordering

Restaurant managers use different strategies for their purchases. Most food suppliers have interactive web sites where any amount can be ordered and put in when they need their products. This allows the food service managers to practice what is called just-in-time purchasing, which is a finely tuned product forecasting where orders are placed so that the items will arrive just before the inventory runs out, and eliminates the high cost of owning a large storage area such as a freezer. This just-in-time ordering also gives the ability to put in and process orders in a quick turnaround time. Using this computer ordering system provides purchasers with quick feedback and troubleshooting of order fulfillment problems more efficiently. [2]”Point- of-Sale systems” (POS) can be interfaced directly with the system of food service suppliers and set up to order directly when the stock is ran down to a specific amount or level. This system can also be used to order new items or products, perform cost comparisons, and pricing activities. Restaurant computers and the supplier’s main computer can be directly networked together by use of [3]”Electronic Data Interexchange” (EDI). This allows for a better security than the Internet and is used to help distributors, buying groups, and manufacturers to merge the various streams of data. For example when TGI Friday’s inventory is detected by the software of their information system to have run down to a certain inventory amount, (an amount that was agreed upon by TGI Friday’s management and Sysco’s management), the information system automatically orders a specified amount of buns for their hamburgers. This information is then sent through the network by way of the Electronic Data Interchange (EDI). Sysco’s system then issues a pull order which in turn is pulled, loaded on a truck and scheduled to deliver within the agreed upon time between TGI Friday’s and Sysco. This system greatly reduces the likelihood of TGI Friday’s running out of buns for its hamburgers. This system is also more efficient and saves management time of both companies. This system also takes a lot of the human error out of managing the foodservice’s inventory.

Food Service Receiving

Since the early 1970s Universal Product Code (UPC) has been in use, but did not become the [4]“Food service industry standard” until the late 80s. This is a method of placing a coded label with bars on it that can store information like price, storage, item popularity, etc. Many food service operators use this bar-coding technology for data entry. Hand held bar code scanners wirelessly transmit by way of a radio frequency to the foodservice’s computer the item and description. It is then entered into the inventory by the computer software. This allows the restaurant receiving person to scan the items in when received and, in real time to show up on the restaurant’s raw materials inventory. Users are also able to use this technology to check in orders by data entry. The inventory database is then updated with the new items and current costs.

Inventory Management

Most food service operations utilize computer technology that allows a basic implementation of a [5]”property management system” (PMS), which includes modules of inventory control and issuing. There is also a [6]“classic technology” which is an online procurement, which enables information to be downloaded to software that can track and analyze inventory and assist in menu engineering. A restaurant manager will be alerted by this information system if he or she is about to run out of a particular item or if it is spoilage date is expiring soon.

These online information systems have another big advantage also, flexibility. These information systems can store in its data base system numerous sets of files related to a single item connecting to numerous suppliers, dry goods, and prices which help obtain cost advantages by being able to change suppliers and products frequently. This data base information will also help when it comes to required recipe changes because of changing inventories.

[7]“Vendor Managed Inventory” (VMI) utilizes the supply chain where the distributor’s inventory level is maintained by the manufacture. Some companies have [8] “designed their software to leverage on the advantages offered by cloud computing.” We learned about cloud computing in our Management Information Systems course. Cloud computing is a [9]“form of hardware/software outsourcing in which organizations offer flexible plans for customers to lease hardware and software facilities.” The distributor’s inventory data is available to the manufacturer and the manufacturer is responsible for maintaining the distributor’s inventories and generating orders. There are agreed upon inventory levels of which the manufacture and the distributor have agreed to be bound by. The manufacturer specifies delivery amounts that are to be sent to the distributor through the distribution network using data acquired from the Electronic Data Interchange (EDI). The restaurant will be able to operate more smoothly and efficiently because this gives the restaurant manager more of his time to concentrate on other cost saving endeavors.

Restaurant Recipes and Menus

To respond to consumer demand shifts, restaurant managers often have to adjust their menu mix. Certain foods go into and out of favor with consumers because of diet, allergy, and seasonal trends. As menus are adjusted to reflect these trends, food costs have to be closely monitored. These menu changes immediately impact the restaurant’s cost-per-serving, the price on the menu of that item, forecasted profit, and other financial criteria. A query can be set up in a management information system and used to ask for inventory items with certain criteria that cost a certain amount per-serving or different salad greens that have the lowest price during a certain week. This information that is received from the query can then be entered into a menu computer screen, with actual time updates, moving through to circulated menu descriptions, to inventory supplies, to item pull lists, to making instructions, to scaled formulas, to nutritional requirement totals, etc.

Food Management Systems

Many companies sell food service management software. Windows NT is the most widely used. The graphical user interface it uses which reduce the cost of training, advances usability, and all in all improves customer service. It has a built-in network support that provides low-cost networking capability. If the users choose non-proprietary[10]”point of sale” (POS) systems they are likely to cut their expenditures for two explanations: 1. Non-proprietary operating systems cost less to develop, and 2. Comparison-shopping can be done to get the best features and technologies that they want. One such company that offers this food management systems software is CBORD. Their program is called Foodservice Suite. [11]”Its modules include: Menu Management System, Inventory and Purchasing Management System, Nutritional Accounting System, and Event Master Plus. Also included are online applications: NetNutrition, NetCatering, NetRecipe, and NetMenu.” This software sounds impressive and uses technology to perform many operations in the restaurant’s business end. Later on under the clinical and child nutritional systems section I will mention another software company who offers this type of software and give an example of how a hospital’s foodservice might use such a system for patient care.

Total System Interfacing: the Seamless Approach

In the past information systems that handled foodservice planning have been focused on “stand alone” systems. Over time though, foodservice managers and owners have come to realize the value of interfacing systems. The modern business information systems are exceeding the idea of interfacing, selecting instead a seamless integration approach.

One of these approaches is data warehousing. As learned in our MIS course, information is passed on from the integrated information system of the foodservice to a massive database system warehouse that stores all of the organization’s information. The foodservice manager can then access the information, as he needs it. This is not currently being done by all foodservices, but some are doing it and others are looking into it.

Many restaurant chains are sharing information among themselves over distances. They are taking advantage of this new technology and using WAN systems by way of network of leased lines between the foodservice sites. (We learned about the different types of data communication LANs and WANS in our management information course). They are helping their fellow restaurant managers to gain a competitive edge over the other competing restaurants.

Clinical Nutritional Application Systems

There is a special significance for system integration in the clinical nutritional care applications in healthcare. In the past, one of the main operating costs in the managing of a menu was the copying and bringing up to date the patient’s information whether it was done the manual way of pen and paper or by entering the information into a computer data system. Using integration means having the simplicity of updating electronically, data such as the name of the patient, the patient’s location, and the diet ordered. Integration is also consistent with [12]JCAHO (Joint Commission on Accreditation of Healthcare Organizations) standards, which require excluding duplicate data entry. Complete integration translates labor effectiveness and cost reductions. By using integration you can connect medical records such as medical test results and approved medicines with medical nutritional reports, further benefits arise from better nutrition selection, valuable nutrition intervention, and detailed DRG (Diagnosis Related Group) assignment/billing. The DRG is a number the doctor assigns to classify a medical diagnosis.

Healthcare facilities’ foodservice departments are also using technology to improve their operations. Software is being offered to hospitals by software vendors. One of these software companies is Vision software. [13]“Vision Software delivers leading-edge applications for food service management, hospital cafeteria operations, diet office and hospital patient menus, hospital room service and tray tracking, paperless menus, mobile menus, clinical nutritional care, food allergy checking, automated menu checking, food-drug interaction prevention, nutrition screening and assessment, and much more. Vision software also offers customized interfaces with real-time information to support patient nutritional care.” All of these advances in technology help the healthcare facilities’ foodservice departments be more efficient and food safety conscientious. An example of use of this software is that the dietician can come around to the rooms with a smart phone or tablet and let the patient choose food items from a restricted diet that the doctor has prescribed for their next meal. Then, the dietician sends the request to the hospital’s cafeteria by wireless transmission. This saves time and lets the patient has some say in their meal preparation. This meal selection may seem like a small matter, but it has been shown that if the patient gets some choice in their meal selection no matter how small, the likelihood of the meal being eaten becomes much greater. This also adds to the patient’s satisfaction with the hospital stay.

Food Safety: The Use of Information Systems

With new advances in technology the foodservice industry has benefitted greatly in the way of food quality and safety. Food quality and safety standards are easier to access by computer terminals both at the supplier level and at the receiving end of the restaurant. As an example, when the supplier goes to ship a product, not only does the temperature of the product get entered, but also the information about what external and internal temperatures the product has been kept at. The external temperature is done by a recording module in the storage cooler or freezer. The module is connected either by cable or wireless to an information system which records the storage’s area temperature at intervals set up by its refrigeration department. This information is kept on file to be accessed at the time of shipping. The internal temperature is recorded by modules with temperature probes that are put in the center of the product throughout the storage area. These modules are gathered up by the suppliers Quality Control personnel and downloaded by a computer which files the information for future use. If the supplier is also the manufacturer, other information will be available and can be accessed from their database and can be sent along with the products. This information is internal temperatures the product was cooked to for killing bacteria, packaging condition, expiration dates, etc. Most large industrial food manufacturers have a computer monitoring system that records the processing of their products from beginning to end. Restaurants that receive these products usually only check things such as temperature of the product when they receive it, expiration dates, and product appearance. But, this information is available to them, either directly through the manufacturer/supplier or from the manufacturer by way of their supplier. If the restaurant happens to see a problem with any of the food products all of this information and more can be obtained.

[14]“Food safety is a concern shared by consumers, industries and governments. Consequently, many governments strive to develop a national import policy by use of systems such as the Food Import Management System (FIMS) to guide the integration of its various import inspection activities, including its controls, monitoring, and enforcement actions. Ultimately, this policy will provide the basis for the strategic approach to harmonize all import activities.” This system can be used as a dependable instrument for verifying, handling, and managing information connected to food import products. It uses a database with precise and easily available information related to food quality, food safety, and amount of imported foods. This system has improved the total quality of imported foods by enhancing the prevention of consumer risk. [15]“FIMIS has a built-in Online Analytical Reports (OLAP) component, which enhances decision-making processes in the food control division.” For example these reports contain information on general hygiene of the imported foods. Accessing these reports readily online gives quick, accurate information on the imported foods that are being inspected.

Conclusion

The technology that is available to the restaurant and foodservice facilities is amazing. These information systems that handle ordering, receiving, inventory, recipes, menus, and food safety are helping the facilities that use them to gain a competitive edge over their competitors. With these systems they are more cost efficient in every way and therefore more profitable.

Remembering Moore’s Law, where technology doubles every 18 months, what will it be like in the year 2020? Some restaurants are currently experimenting with digital tablet menus that can be readily adjusted wirelessly. This eliminates the need for scratched out menu items and prices or the need to reprint menus. In the years to come are we going to have tablets where we do our own ordering without a waiter or waitress? Are we going to be able to use these tablets not only to order our steaks cooked the way we want them, but also to order how our steaks are seasoned, our vegetables seasoned, amount of calories we want them to contain, and do all of this wirelessly? Will technology make it where we can have our plates of food delivered by means of a transporter like Star trek? I believe the old phase: “The sky is the limit” will become a different phrase. This phrase will be changed through technology to say: “The sky is not the limit.” We should expand our imaginations beyond all the limits. And let technology take us where it will.

Works Cited

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[1] www.Academy.edu-High Tech Foodservice

[2] www.articlesbase.com

[3] http://logistics.about.com/od/forsmallbusinesses/a/VMI.htm

[4] www.Academy.edu-High Tech Foodservice

[5] www.Academy.edu-High Tech Foodservice

[6] www.Academy.edu-High Tech Foodservice

[7] http://logistics.about.com/od/forsmallbusinesses/a/VMI.htm

[8] http://newblog.intellitrack.net/inventory-software/cloud-based-inventory-management-software/

[9] Using MIS by David M. Kroenke-third edition

[10] www.foodservice.com/technology/fst.cfm

[11] http://universities.cbord.com/products/product.asp

[12] www.aspirusmedicalstaff.org/media/pdf/QS-075.pdf

[13] www.vstech.com/hospital-food-service/software.php

[14] www.primus.com.jo

[15] www.primus.com.jo