Benihana Of Tokyo

1. Prepare a detailed process flow diagram of a Benihana restaurant on a typical busy night.

a) See exhibit 1- Benihana restaurant flow diagram

2. Describe the process flow diagram in detail and contrast it with that of a typical sit-down restaurant.

a) See exhibit 2 вЂ" typical restaurant flow diagram

b) Benihana is much like a typical restaurant in terms of the main process flow of the customers. The flow begins with hungry people entering the restaurant and ends with full/satisfied people leaving as shown in exhibits 1 & 2. The main differences in the flow of a Benihana restaurant and a typical restaurant exist with the external interactions that occur with the main flow of the people.

i) In both flows the hungry people enter the restaurant and approach the Maitre d to acquire about a table to be seated. If there is a table available the people will be seated immediately, if there is not the people will have to wait in the bar & lounge area.

ii) When a table is ready the Maitre d seats the party and the group proceeds to order. In a typical restaurant all the food orders would go through the waitress and there is no direct communication with the chef. In a Benihana restaurant the soup, salad, and drinks (quick/easy orders) are ordered through the wait staff and the main dish is ordered directly to the chef who is stationed at the same table.

iii) It is in step 2.ii) that Benihana was able to make the process flow quicker and more efficient by eliminating the wait time in ordering and receiving a meal that one would experience in a typical restaurant.

iv) When the meal is complete the people will leave the restaurant. In a typical restaurant the “runner” would then clear the dishes and set the table for the next customer. In a Benihana these tasks are assumed by the wait staff and chef, this eliminates the need for extra “runners.”

c) A second significant flow to mention is the flow of the food itself. The flow begins with the raw materials and ends with the completed/served meal. In both exhibit one and two the food will experience the same beginning and end but the process of getting there is much different.

i) The raw materials enter the restaurant and are prepared for the chef to cook. At this time the materials are accounted for as Works in Progress (WIP) because there is a time when the materials will sit before the chef receives them and cooks the meal.

ii) After the chef cooks the meal at a typical restaurant the prepared meal sits and waits for the wait staff to pick it up and bring it to the table; therefore creating another WIP. At Benihana the chef cooks the meal at the table; therefore there is no WIP for food after it is prepared because the food goes directly to the customer.

d) In a typical restaurant there is no direct communication with the chef, all communication is made through the wait staff. This is different from the flow in the Benihana design as chefs are preparing food in front of the customer and has direct interaction with the customer in front of them. At Benihana there is no wait time (WIP) for food after it is prepared, it is served by the chef directly to the customer. At a typical restaurant the food changes hands to the wait staff from the kitchen before it is served to the customer.

e) The role of the “runner” at a typical restaurant is assumed by the wait staff as they serve the food to the table. At a Benihana restaurant the chef assumes this role as the food is served by the chef as it is being prepared. The wait staff solely is responsible for drinks and salads and does not actually serve the meal to the customer.

3. Compare and contrast Benihana’s cost structure with a typical sit-down restaurant.

a) Benihana was able to develop a high profit margin mainly through reduced menu selection and labor costs.

i) The 70/30 split is in line with typical restaurants for totals sales. Food costs were lower by approximately 10%. This was achieved using a limited menu consisting of limited combinations of 3-4 menu items.

ii) The majority of savings found in a Benihana restaurant compared to a typical restaurant are in payroll and management salaries. Typical restaurant was 32-41% (including management salaries) where as Benihana is 14-16%, approximately half of the typical restaurant. This was due to the fact that the chefs were in essence the servers, which cut out a large portion of the extra wait staff and runner functions found in the typical restaurant. Management was limited to one manager, one assistant manager and a few front men (serving a maitre d function) who were in training for management positions.

b) Reducing “unused space” by cooking at the table eliminated the need for full service kitchens that take up space that is not filled with customers. This allowed Benihana to increase the bar and lounge areas. Benihana recognized this as a key money making area, this area proved to be a profitable asset for Benihana as it produced an 80% margin on beverage sales, where as typical restaurant turned a 70% margin in this same area.

c) Rent costs were not a significant cost savings although Benihana rent costs were in the low range of rent costs for a typical restaurant.

d) Benihana ensured that bonus incentives were available to all employees. This is not normally seen in a typical restaurant where management may receive bonus incentives but they would never be spread throughout the organization down to the wait staff. Benihana incentive system was set up by introducing sale budgets and goals. Financial controls and budgets in place allow Benihana to pay bonuses across a single unit from management through to servers and chefs.

e) Benihana was not about saving in all areas. Compared to typical restaurants Benihana spends 5 times more in advertising. A typical restaurant spends 1-2% of revenue in advertising; Benihana spends 10% or more.

f) Benihana restaurants also paid more for the authenticity of the restaurant.

i) Associated with the start up costs of a Benihana restaurant is the certification of becoming a master chef. This training instills the intangible asset of the knowledge needed for Benihana. At a typical restaurant the cooks need little to no training at the cost of the restaurant.

ii) Also associated with the start up costs of a Benihana restaurant are the