Home / PEOPLE / Hospitality Trends / Cost Management's: Many faces

The secret to cost management is to train all your employees to be cost conscious.

GL: For us it is food cost, labour saving and high productivity from the same manpower and facilities. Our biggest costs come from buying proteins which are going through the roof. Seer fish slices have become exorbitant, hence we suggest other variants of fish which sound exotic but cost much less.

We have successfully weathered economic slowdowns before where costs were tightened. So do you think the current talk of ‘going back to the basics’ and pruning the excesses is justified? Why?
AS: Whether the economic situation is good or bad, it is always prudent to be in touch with basics. Excess expenditure is never beneficial for an organisation.

A good cost management system even during the good times comes in very handy when the times are not so good as you do not have to take drastic measures or make knee jerk reactions. Consistent policies are good for all organisations.

Story continues below

Advertisement

COMMENT Comment on this article

SNR: Going back to basics sounds good but there are other hurdles which should be addressed without the demoralising effect. Cutting costs makes people less productive and enthusiasm takes a beating.

Plus people instead of helping the organisation start hunting for new employment. With all these factors, one should strike a balance between cost cutting and the organisation’s goals.

SP: Yes going back to basics is important by pruning excess costs but not compromising on quality or experience. The cost cutting measures undertaken should be justifiable so that the end customer is not cheated and he gets the expected quality and value for his money.

GL: While it may sound logic at times like these, there are other ways to handle the excesses. If we cut down on staff, the word spreads and people will remember it for a long time to come.

It may be an issue when we really need the staff. But, using them wisely will not only help staff morale it will also help them talk positive about your company.

Food service is more competitive now than ever. Will survival/success be a factor of cost reduction or service/experience?
AS: Both. They have to work in tandem to succeed. Customer expectation of service and experience is going up. Good or bad economic situations cannot justify any downgrade of these factors.

So the challenge is to keep costs under control while providing even better customer experiences through knowledge, innovation and service excellence.

SNR: If you are talking of the luxury class, I feel that recession has not affected it at all. It is only the middle category which has been affected. They need to work out better prices, survival should be the mantra rather than success.