The Aegean Restaurant

Alexis Vasiliadis
MGMT 365
Nichols College

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Executive Summary of Business

The Aegean Restaurant will be a full service, Greek restaurant offering affordable, high quality
Greek cuisine inspired by family recipes. It will be a 100 seat fine dining restaurant, with a 50
seat bar area. We will also have a banquet room to accommodate large parties of 25-150 people.
We will be open 7 days a week from 11am-11pm. Our dining room will be a perfect setting to
meet friends or family to enjoy a variety of food and beverages. Our banquet room will cater any
event including birthday parties, anniversaries, engagement parties, business conferences,
reunions, etc. We will work with you to tailor your customized function and help make this an
unforgettable event. Our goal is to provide our customers with an entire dining experience that
exceeds their expectations on every visit.
Services and Staffing Requirements
The Aegean menu will offer a variety of Mediterranean dishes, along with an assortment of
appetizers, sandwiches, and salads. We will have a variety of Greek wines, cocktails, and
desserts to complement each meal. One thing we will be consistent with is our service. All server
staff hired will have extensive experience and will go through three weeks of training. We will
start off by hiring 30 employees including: managers, waitstaff, bar tenders, cooks, dish washers,
hostesses, and bussers. Depending on how busy we are, we may need to hire additional staff.
Layout of The Aegean
The total space required for The Aegean will be about about 7,000 square feet.

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Layout of The Aegean

Dining
Room

Big
enough to
hold 100
people

Bar Area

Banquet
Room

Big
enough to
hold 50
people

Scheduling

Big
enough to
hold 150
people

Kitchen

Hold
inventory,
equipment/
machines
cooking and
prepping
area

Bathrooms

Women +
Mens
bathroom

Waiting
Area

Small
seating
area for
customers
waiting

Office

Personal
workspace
area

A restaurant schedule is essential to our operation. Not only will the schedule outline which
employees will work the daily shifts, the schedule is a crucial way to anticipate the daily sales,
control labor costs and ensure that all parts of the operation have the help they need to run
smoothly. One thing The Aegean will try to avoid is understaffing and overstaffing. Overstaffing
the restaurant can help provide improved attention and service to guests, but can cause labor
costs to decrease profits you receive. On the other hand, understaffing can appear to be a good
way to save money. However, this quickly leads to diminished service standards, which can harm
your business more than a few saved dollars (Parpal 2015). Since The Aegean is a new operation,
we will do our best to ensure we have the right amount of staff working. Below is an example of
what a typical schedule will look like during the weekend. On nights that are not as busy, we will
have less employees working. In addition, either myself or the manager will always be on duty,
at all times of the day.

Storage
Space

Extra
space for
equipment

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Waiter/
Waitress

Bar tenders

Hostess

Lunch Shift
Employee 1

10:30-3 (First
person on
shift)

10:30-3:30

11:00-4:00

Employee 2

11:00-3:30
(Second
person on
shift)

11:00-4:00

Evening Shift
Employee 1

3:30-9:00
(First
waitress)

4:00-10:00

Employee 2

3:30-9:30
(Second
waitress)

5:00-close

Employee 3

4:00-10:00
(Third
waitress)

Employee 4

4:00-close
(Fourth
waitress)

Busser

4:00-10:00

5:00-9:30

Cooks

Dishwashers

First Shift (Morning)

Employee 1

9:30-4:00

9:30-4:00

Employee 2

9:30-4:30

Employee 3

10:00-5:00

Second Shift (Evening)

Employee 1

5:00-10:00

4:00-10:00

Employee 2

5:00-11:00

5:00-Close

Employee 3

5:00-11:00

Employee 4

5:00-Close

Employee 5

5:00-Close

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Waiting lines
Waiting takes place in almost every productive process or service. Since the time spent by people
and things waiting in line is a valuable resource, reducing waiting time is an important aspect of
operations management. Companies focus on reducing waiting times as a component of quality
improvement. Companies are able to reduce waiting time and provide faster service by
increasing their service capacity, which usually means adding more servers or employees
(Elements of Waiting Line Analysis). In the restaurant business, waiting time is an important
determinant. Waiting time will not only affect a customers experience but also their repeat
purchase intention. Long wait and hold times means lost sales, bigger service issues, and
unsatisfied customers (Laube 2014). Wait times often result from bottlenecks. Some of these
bottlenecks include: waiting to be seated, waiting for drink/food order, waiting for food delivery
and waiting for the check. In order to reduce waiting time, The Aegean will make sure to
optimize our staff. We will start off by analyzing our customer data to understand our peak times
and to make sure we are adequately staffed. During peak times, weekends and holidays, we will
have additional staff, including bar tenders, wait staff, cooks, hostesses, food runners, and
bussers. We will also create contingency plans for when employees call out. Next, we will look
for ways to operate as smoothly as possible. For instance we will:
Limit the number of tables per server to provide faster service and reduce waiting times for
our customers.
Use additional space such as the banquet room if needed.
Provide valet parking on weekends
Offer menu during wait time

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Provide ordering in advance (online orders)

Accept reservations
Assist customers to bar/lounge while waiting for a table
We will also provide accurate estimates on wait times. Customers are generally satisfied if the
estimated wait time is agreeable and matches the actual wait. Customers usually get upset if they
end up waiting longer than expected or the original estimate is too long (Laube 2014). Line
balancing is another strategy that we will use to reduce food wait times. Line balancing is the
process of assigning tasks to workstations, so that workstations have approximately equal time
requirements. It is a concept where the product (customer) has to pass through a series of
workstations (servers) in order to become finished output. If the workstations in the kitchen are
unbalanced, that is, do different tasks with different times, some will be idle while others will be
overloaded. The idea of line balancing is to take away tasks from overloaded stations and
distribute them to underworked stations, which will increase capacity for the entire process (Das
2016). Line balancing will be used in the kitchen to distribute the workload evenly between each
station, which will reduce the waiting time for food.
Time Studies
Over the years, time and motion studies have been done in many industries to determine how
long it takes to do a given job and to improve it through setting production goals and reducing
any unnecessary steps. Today, time and motion studies are focused on the time aspect of work, or
how long it takes to do a job, and are important in getting fundamental information on how a
process is working (Holpp). Since The Aegean is a newly operated business, time studies will be
done in the kitchen to determine roughly how long it takes to prepare a meal.

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Mass Customization
Mass customization is the process of delivering wide-market goods and services that are
modified to satisfy a specific customer need. The changes could be as small as a variety of
different flavors or as complex as developing a completely new product for a particular clientbase. Mass customization is a service that has a chance for some new appreciation. It can tie a
customer closer to you and give them a reason not to do business with competitors who dont do
things the customers way (Sherman) The Aegean will gladly mass customize in order to satisfy
our customers needs. For example, if customers have certain dietary restrictions, such as glutenfree, allergies, vegetarian or want a smaller food portion, we will do everything possible to
modify our entrees in order to please the customers need.
Pareto Chart
A Pareto chart is a type of chart that contains both a bar graph and a line graph.
The lengths of the bars represent frequency or cost (time or money), and are arranged with the
longest bars on the left and shortest to the right. This way the chart visually shows which
situations are more significant (Pareto Chart). Pareto charts are used to:

When analyzing data about the frequency of problems or causes in a

process.

When there are many problems or causes and you want to focus on the most significant.

When analyzing broad causes by looking at their specific components.

When communicating with others about your data (Pareto Chart).

Pareto charts will be used at The Aegean to determine causes of customer dissatisfaction and
ways we can reduce the number of complaints. By using a Pareto chart, we will be able to

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determine what business issues needs attention and from there we will develop a strategy to
reduce them. Below is an example of what a Pareto chart would look like.
Cumulative %

Count

Restaurant Complaints
900
800
700
600
500
400
300
200
100
0

Overpriced

100
80
60
40
20
Small
portions

Long
Wait
Time

Bad
Food

Bad
Service

Not
Clean

Food
Too
Cold

No
Parking

Too
Noisy

Food
Not
Fresh

Economies of Scale
Economies of scale are reductions in average costs due to production volume increases. There
are two different types of economies of scale: internal and external. Internal economies of scale
occur when a firm reduces costs by increasing production. External economies of scale occur
when a company benefits from expansion (Heakal). The Aegean will benefit from economies of
scale because we will buy many of our products in large quantities, which will take advantage of
volume discounts. Some examples include: food, produce, salad dressings, plates, silverware,
glasses, tables, chairs, alcohol, soft drinks, paper, to go boxes, etc. The more items we purchase
at one time, the less the average cost of a single item.
Total Productive Maintenance
Total Productive Maintenance (TPM) is a method to achieve maximum equipment effectiveness
through employee involvement. The goal of TPM is to maximize equipment effectiveness with

Vasiliadis 9

no breakdowns, defects, or accidents. TPM is not just about implementing preventive

maintenance to prevent machines from breaking down, it is also a team approach to improve
product quality. Good maintenance can be ensured by incorporating the principles of TPM in
organizational practices, therefore the Aegean will be using TPM. We will implement TPM by
cleaning and inspecting our equipment daily, eliminating problem sources, conduct general
inspections and implement equipment management. We will also use the 5s Foundation to create
a work environment that is clean and well-organized (Total Productive Maintenance).
Just-In-Time
Just-In-Time is an inventory management strategy that companies use to increase efficiency and
decrease waste by receiving goods only as they are needed in the production process, thereby
reducing inventory costs (Kelnhofer 2009). Many times restaurants attempt to run their
production on ordering based off a sales mix report or their experience. In many cases producing
or ordering too much product can potentially turn into waste. The Aegean will use JIT to keep
the waste to a minimum. With JIT practices, we will produce only what we need. We will focus
on daily needs and not necessarily future needs. Based on a forecast, we will be able to
determine what we need to produce for one day. In terms of ordering purchased inventory, we
will use JIT to minimize the opportunity of waste. To obtain a JIT amount, we will establish an
order schedule. Each order will have to last until the next one is scheduled to arrive. To prepare
an order a physical inventory of product on the shelves needs to be completed. With less product
on the shelves the restaurant will experience less waste. By looking at our history and
forecasting, The Aegean will be able to reduce inventory levels and waste (Kelnhofer 2009).
Muda

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Muda is a Japanese word that refers to any activity in your process that does not add value or in
other words is a waste (The Seven Wastes). The eight wastes of lean (Muda) include:
overproduction, inventory, transportation, motion, over-processing, defects, skills and waiting.
The application of lean will help The Aegean remove all forms of waste in the production
process, ensure good quality, reduce lead-time through the transformation processes, reduce the
amount of defects, prevent having excessive inventory and/or inventory lying idle, reduce
employees and customers waiting and reduce the amount of time and energy required for a
process (The Seven Wastes).
Radio-Frequency Identification
Radio-Frequency Identification (RFID) is a form of wireless communication that uses radio
waves to read and capture information stored on a tag attached to an object (RDIF 2015). RFID
can be used in the restaurant industry to help ensure that customers dont get turned off by bad
service. Many quick service restaurants already use both passive and active RFID solutions so
wait staff can track a customers table and deliver food more efficiently. RFID is definitely
something The Aegean could benefit from in the future. For example, managers can track how
long customers have been seated without being waited on, by handing customers RFID devices
to take with them to their table. The solution could trigger an automatic alert after 2 minutes,
notifying management and wait staff that customers at a certain table have not been waited on
(RDIF 2015).
Lot Sizing
Lot sizing is determining the order quantity or production quantity of an item. Rather than
building up a large inventory, The Aegean will use JIT systems to maintain inventory with lot

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sizes that are small as possible. Small lot sizes will be beneficial for a few reasons. First, they
reduce cycle inventory. Reducing cycle inventory reduces the time and space involved in
manufacturing and holding inventory. Second, small lot sizes will help cut lead times. Lastly,
small lot sizes will help achieve a consistent operating system workload. The Aegean will use
small lots to enhance quality, simplify scheduling, reduce inventory and encourage continuous
improvement (Lot Sizing & Lean Manufacturing Strategy).
Logistics
Logistics is the entire process used to select suppliers and negotiate contracts for delivery of
goods or services. Choosing suppliers for a restaurant is an important decision. The Aegean will
have national distributors along with local and regional wholesalers. Some of our items may be
from different parts of the country and will be transported by trucks. These specially designed
trucks will maintain the temperature in the storage chamber throughout the journey to guarantee
it stays fresh (Decker).
Forecasting and Stockout
Forecasting is very important in the restaurant industry. A forecast is an estimate of future sales
of finished products based on historical data. They are calculated by using product mix data from
the last two years. Forecasting can be used in scheduling employees, planning food and supply
orders, and corresponding with marketing efforts. Our goal is to accurately forecast to prevent
overstaffing/understaffing, over-production, waste, and stockout (Arnold 2014). Stockout is a
situation in which an item is out of stock. Stockout will not be an issue at The Aegean because
we will hold a small buffer stock. This is an extra quantity of stock held to meet unexpectedly

Vasiliadis 12

higher demand. This will also benefit our customers because they will be able to receive what
they ordered (Arnold 2014).

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References
Arnold, S. (2014, January). Keys to Making Accurate Sales Forecasts. FSR Magazine.
Das, A. (2016). An introduction to Operations Managment: The Joy of Operations.
Decker, F. (n.d). How to Determine Logistics for a New Restaurant. Retrieved on March
2, 2016 from http://smallbusiness.chron.com/determine-logistics-newrestaurant-40740.html.
Elements of Waiting Line Analysis. (n.d.). Retrieved February 24, 2016, from
http:// www.prenhall.com/divisions/bp/app/russellcd/PROTECT/
CHAPTERS/ CHAP16/HEAD01.HTM
Heakal, R. (n.d). What Are Economies of Scale? Retrieved February 28, 2016 from
http://www.investopedia.com/articles/03/012703.asp
Holpp, L. (n.d.). Preparing to Measure Process Work with a Time Study. Retrieved
February 24, 2016, from http://www.isixsigma.com/methodology/businessprocess-management-bpm/preparing-measure-process-work-time-study/
Kelnhofer, M. (2009). The Advantages of Just-In-Time. Retrieved on March 1, 2016 from
http://returnoningredients.com/pdf/The_Advantages_of_JIT.pdf
Laube, J. (2014). How to Turn Your Good Restaurant into a Great Business. Retrieved
February 10, 2016, from http://www.restaurantowner.com/public/How-toTurn- Your-Good-Restauran-tinto-a-Great-Business.cfm
Lot Sizing & Lean Manufacturing Strategy. (n.d). Why Small Lots? Retrieved on March
2, 2016 from http://www.strategosinc.com/lean_lot_sizing.htm
Pareto Chart. (n.d). Retrieved on February 25, 2016 from http://asq.org/learnabout- quality/cause-analysis-tools/overview/pareto.html

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Parpal, M. (2015 July, 14) How To Make a Restaurant Schedule. Retrieved on February
16, 2016 from http://www.foodservicewarehouse.com/blog/makerestaurantschedule/
RFID. (2015, February 18). RFID Can Eliminate Costly Delays In Restaurant Industry.
Retrieved on March 1, 2016 from http://www.rfid24-7.com/2015/02/18/rfidcan-

eliminate-costly-delays-in-restaurant-industry/

Sherman, E. (n.d). Mass Customization: Let Your Customers Have It Their Way.
Retrieved on February 25, 2016 from http://www.inc.com/erik-sherman/
mass- customization-let-your-customers-have-it-their-way.html
Taylor, N. (2013, November 4). How to Start a Restaurant. Retrieved February 13, 2016,
from http://www.businessnewsdaily.com/5400-how-to-start-restaurant.html
The Seven Wastes. (n.d). 7 Wastes of Lean Manufacturing. Retrieved on March 1, 2016
from http://leanmanufacturingtools.org/77/the-seven-wastes-7-mudas/
Total Productive Maintenance. (n.d). Retrieved on March 1, 2016 from http://
www.leanproduction.com/tpm.html