Learn About Lean by Eating Pizza

Summary

This script discusses the value-added factors in pizza making: quality ingredients, hand-prepared dough, and wood-fired baking. It outlines the time and labor costs, revealing that a €6 pizza costs €3 in labor and ingredients. The customer-facing cycle time is 7 minutes, but due to operational inefficiencies, customers often wait longer and pay more. The script contrasts cutting costs with a lean approach, suggesting value stream mapping to reduce waste and sustain the business.

Takeaways

• 🍕 **Value in Pizza**: Three key factors add value to a pizza: quality and freshness of ingredients, hand-prepared dough, and wood-fired oven baking.
• 🕒 **Preparation Time**: The restaurant needs 3 minutes to knead the dough, 2 hours for it to rest, and 2 minutes to ready the toppings before the customer-facing cycle begins.
• 📋 **Customer Cycle**: Once the customer enters, the restaurant requires 1 minute for order taking, 2 minutes for pizza preparation, 3 minutes for cooking, and 1 minute for serving.
• 💶 **Cost Analysis**: The overhead labor cost for one pizza is €3, with ingredient costs at €3, totaling €6.
• ⏱️ **Wait Time**: The customer should ideally wait no more than 7 minutes for their pizza, which includes all the preparation and cooking times.
• 💸 **Price Reality**: The realistic price for a pizza with such quality and service is higher than €6, likely around €15, considering additional costs and wait times.
• 🔄 **Costs Beyond Creation**: Customers pay not only for the pizza's creation but also for wait staff's idle time, space, and the overall dining experience.
• 🍽️ **Waste and Overhead**: The cost of unsold pizzas, unused dough, and other waste factors into the final price of the pizza.
• 🛒 **Competitive Pricing**: If a competitor offers pizzas at 20% less, the manager must decide between cutting costs, which affects quality, or adopting a lean approach to reduce waste.
• 🔍 **Lean Approach**: A lean mindset involves value stream mapping to identify and reduce waste, such as implementing an order app, creating a happy hour, and streamlining waiter movements.

Q & A

What are the three factors that add value to a pizza according to the speaker?

The three factors that add value to a pizza are the quality and freshness of the ingredients, the preparation of the dough by hand, and the use of a wood-fired oven for baking.

How long does it take to prepare the dough before baking the pizza?

It takes 3 minutes to knead the dough, 2 hours for the dough to rest, and 2 minutes to get the dough ready.

What is meant by 'customer-facing cycle time' in the context of the pizza preparation process?

The 'customer-facing cycle time' begins when the customer enters the restaurant and includes the time taken to place the order, prepare, cook, and serve the pizza to the table.

What is the total time it should take to receive the pizza after placing an order?

From the moment the customer enters the restaurant, it should take around 7 minutes: 1 minute to take the order, 2 minutes to prepare the pizza, 3 minutes to cook it, and 1 minute to serve it.

What are the estimated costs for making a pizza, and what factors contribute to these costs?

The estimated costs are €6, with €3 for labor and €3 for ingredients such as tomatoes and cheese.

Why is the final price of a pizza higher than just the creation cost?

The final price is higher because customers also pay for other factors like waiters' idle time, the time spent with customers, wasted ingredients, and operational inefficiencies.

How does a competitor offering a 20% discount affect the restaurant's management?

The manager has two options: cut costs by using cheaper ingredients and industrial ovens, which may affect quality, or take a lean approach to reduce waste and improve efficiency.

What are some potential solutions to reduce waste and improve efficiency in the restaurant?

Solutions include using an app to take orders to avoid mistakes, introducing a happy hour to reduce idle time, and streamlining waiter movements to unlock hidden value.

What is the risk of cutting costs by using cheaper ingredients and industrial methods?

Cutting costs in this way will likely reduce the quality of the pizza, which could eventually harm the restaurant's reputation and revenue.

What is meant by 'unlocking hidden value' in a lean approach?

'Unlocking hidden value' refers to identifying and eliminating waste in the value stream, such as inefficiencies in staff movement and order-taking, to improve profitability without sacrificing quality.