OPERATIONS: The secrets of running low labor

May 5, 2003

Jim Moran is a pizza and restaurant industry veteran, and an industry consultant and speaker with Restaurant Trainers, Inc.

Here's a question I'm asked often: How do you run great labor?

Thankfully, my experience as an operator allows me to answer it positively and show our clients at Restaurant Trainers, Inc., how to do the same.

We've been fortunate to reduce our clients' labor costs, on average, by 2.8 percent. We're proud of that, but not as proud as we want to be. That's because there's one operation I know that does even better, my former employer, Domino's Pizza Team Washington, the franchise group of stores owned by Frank Meeks. They have consistently run labor 4 percent to 6 percent below the industry average for the last 20 years.

Recently I sat

Jim Moran

down with some of my former co-workers who continue to manage Team Washington stores, and asked them to share some of their secrets for running the lowest labor in the industry. Below are the remarks of managers Dennis Tran, David Grisard, Bernie Cobbler and Jafar Shariff.

Jim Moran: Does a fun atmosphere help you run better labor?

Dennis Tran: (whose 2002 labor was 15.2 percent) I think it's important to build a crew that likes to have fun working in a pizza store. Everyone has such a fun time hustling and running around in my store that a lot more gets done and I need less people. Less people means lower labor.

Jim: You have six top-10 finishes in Domino's world's fastest pizza maker contest. Is pizza-making speed a key factor in your success?

Dennis: It's important, but you need to hustle all over the store: on the ovens, routing, makeline, phones, everything. Also, the drivers should hustle on their feet, but not on the street.

Jim: David, I have never seen a manager who could put as many flyers out as you. What role does doorhanging play a role in running a low labor percentage?

David Grisard: (whose 2002 labor was 15.7 percent) The funny thing is that most people think that paying people to distribute flyers makes your labor go up! The way I look at it, if you spend $40 on doorhanging labor and it gives you $600 more in sales for the week, your labor will go down. Not to mention the sales it will give you in the future that will make it easier to run good labor.

Jim: What are the keys to making doorhanging a part of your labor plan?

David: There are a lot of them. If I had to pick one key, I would say it is to have a detailed, organized plan before you leave the store. I know for a fact that I get more flyers out with two or three employees than some stores that drop 10 kids in an area and say, "Do this area and I'll pick you up at the 7-Eleven in three hours."

Jim: Bernie, you were the best manager in training I ever had, and your great success as a manager has certainly supported that claim. You didn't make pizzas as fast as Dennis or doorhang quite as fast as David, but you worked very hard at being great at everything.

Bernie Cobbler: (whose 2002 labor was 14.7 percent) I worked hard because everything that goes on in your store affects performance, particularly labor. You should keep your hands on everything, like Dennis talked about. I would add scheduling to that list, because it often gets overlooked.

Jim: How can your schedule lower your labor?

Bernie: It should be fine-tuned and always changing. I look at last year's and last week's sales, weather, special events, advertising and anything else I can to fine-tune my schedule. I also have employees come in at 15-minute intervals to reduce down time. If a manager only has people coming in at 5 o'clock and 6 o'clock, they are probably running high labor.

You also need to make sure people abide by the schedule. If you are scheduling extra people to protect against lates and no-shows, your labor will be high.

Jim: Jafar, you are the only manager to win Team Washington Manager of the Year more than once, and you have won it four times. Your record-low labor in 2002 generated incredible profit. Talk about how you did that.

Jafar Shariff: (whose 2002 labor was 14.3 percent) You have to be goal-oriented, and being the best is an important goal of mine.

Jim: I remember when you first became a manager, you concentrated more on sales than labor. Was that a conscience choice?

Jafar: Absolutely. If you try to hard to run low labor when you first start out, your service will probably suffer. You have to have great service if you want to be a success in the long-term. My average delivery time last year was 18.9 minutes. You have to earn the right to run labor by getting the gold. The gold is sales. Once you have that, running labor is a lot easier.

Jim: These labor percentages are pretty low. Do they all include your manager's salary?

Jafar: Of course, the numbers would be a lot lower if they didn't.

So, what have we learned about running labor? Distribute tons of flyers in an organized matter. Make pizzas fast, but don't ignore the rest of your store. Don't be lazy when you make your schedule. And most importantly, sell more pizza and have more fun!

Other articles by Jim Moran:

OPERATIONS: Cross-training lowers labor cost, boosts morale

Topics: Operations Management

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