From insights come answers.

A series of articles from the Insider Pro consultancy team.

Real examples that show how we orchestrate supply chains and operations to remove constraints to growth, eliminate risks and improve profitability.

Risk management in the hospitality industry

Posted by Jeremy Bowley
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Casual dining restaurants have created mini food factories around the globe where consistency, quality, speed and value are key. Downtime costs each restaurant hundreds if not thousands of pounds per minute in lost sales and spoiled product.

So, when a restaurant chain approached us to help reduce their maintenance cost, reducing risk as well as cost was at the forefront of our minds.

In fact, they'd had a facilities management contract in place for several years and were happy with the service. They simply wanted us to re-negotiate the contract to reduce costs whilst their own procurement team maintained a strong relationship with the maintenance contractor.

We looked at what the contractor was being asked to do, how they did it and the associated communication process.

We set ourselves two challenges:

  1. to reduce the cost for the whole process, not simply the hourly rate for maintenance
  2. to review options that would result in minimising downtime

We could, of course, have done only what was asked of us and simply renegotiated the contract, but we felt we could significantly improve enterprise value by looking at the problem from this entirely different angle.

Our solution:

Their original process allowed any member of staff to call the contractor and request an engineer.

As with most trades there was a call out fee, a rate per hour for their work and a time delay in getting to the cause of the problem.

Based on our experience, we set up a triage system manned by a third party to log calls and attempt to deal with the issue before calling on an engineer. We put a measurement system in place to ensure that each element of the process was monitored.

For every ticket raised the service desk asked the user three simple questions:

  • Was the issue fixed over the phone?
  • Was the issue triaged correctly so that the right engineer turned up with the right tools?
  • What was the time to resolution?

The results

  • Improved fix times - minor problems can be fixed quickly over the phone
  • Reduced downtime by having the right contractors in place
  • Simplified performance monitoring of all parties (to help future negotiations)
  • Retained a good relationship with the maintenance contractor
  • Restaurant staff pleased with the improved resolution time
  • Three year deal saved the company £1.5 million.

Added to that, we turned what was a variable cost into a fixed cost - improving predictability, reducing risk and cost, increasing business value.

This is just one example of our work, to see more, click below to download our eBook.

"5 ways to increase Enterprise Value".

Click to download: 5 ways to increase enterprise value

Topics: Case Studies