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19 May 2007

Lean Diets and the Size of Your Unit

It's Saturday, and many of us are looking forward to eating out.  Actually my wife and I basically eat out every night anyway, so it's no big deal.  Sure beats doing dishes!  However eating out often presents a Urquellproblem... the large serving sizes.  Having the willpower to only eat what is necessary is difficult, and that was especially difficult last year while I was in the midst of losing 40 pounds to get back down to my pre-beer college weight of 25 years ago.  I guess I was getting rid of "excess inventory."

EntreeThe latest Knowledge@Wharton has an article discussing a trend among some restaurants to serve up smaller portions.  Many high-brow restaurants have always served up miniscule portions believing them trendy... you know, the single pea with half a carrot and if you're lucky a scallop surrounded by a thin line of chocolate syrup in the shape of a flower.  Probably for about $50.  But this article is about legitimately smaller servings at more mainstream restaurants.

This spring, T.G.I. Friday's announced what it called an "unprecedented move in the casual dining industry" when the restaurant chain began offering smaller portions at lower prices for select dishes. Called the "right portion, right price" menu, T.G.I. Friday's added six new smaller entrees to its line-up and also began offering smaller portions for four of its long-standing menu favorites like shrimp Key West and baby back ribs.

The problem the article brings up is that consumers still think of "value" in terms of "volume."  This tactic has been tried before without much success, and although the obesity problem has more public prominence, Wharton's Lisa Bolton doesn't give this latest effort much chance either.

But Bolton isn't convinced that this increased awareness is enough to drive consumers to eat less when eating out. "Consumers like a good deal, and more food for less money is considered a good deal." In addition, she notes, "consumers have waste aversion: We hate to throw [food] out, so we just keep eating. We value those things more than we do the long-term health consequences." These attitudes "are driving us towards larger portions and eating more. 'Bigger is better' is a very American belief."

Many of you lean manufacturing types are probably getting a "hmmm..." moment like I did when I read the article.  AlwaysCaveman thinking of the world from a lean framework, as nerdy as that sounds, makes me wonder if this instinctual mentality of probable caveman origins also influences business decisions.   

"Ugga ugga... must build bigger warehouse!" 

"Ugga ugga... must use up all raw material even if no customer for finished product!"

This primeval rationale for nonleanliness (hey I should trademark that as well!) may be further explained by an experiment described in the article, which attempted to understand how consumers decided what an appopriate portion unit size was.  (Those of you reading all the way down to here to figure out what the rest of my post title meant can now get your minds out of the gutter.)  A slice of cheesecake was presented with various combinations of plate size and utensils.  And the result?

"Minor environmental cues that we are not aware of dictate huge caloric differences in intake. The message is that the environment has a lot to do with how much we eat, even though if you asked people how they would respond in such situations, they wouldn't believe that they could or would be influenced by such minor differences."  [said Andrew Geier, PhD candidate at U Penn]

So now perhaps we understand the underlying biological or psychological rationale for batch production.  Ok, that's admittedly a big leap.  But think about the visual cues affecting traditional manufacturing operations... a big room must be filled with stuff.  Benches and benches full of work in process appears more productive than a tiny room filled with a single unit being worked on.  A machine must always be running even if there is no customer for the product.

Too bad we couldn't learn more from the pre-refrigeration caveman...

"Ugga ugga... must kill only dinousaur we eat today otherwise bad meat make us sick."

Enjoy your dinner tonight.   

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Kevin I just started reading your blog a couple weeks ago and thanks to posts like this I can't get enough. Where do you come up with this stuff? It took me about 10 minutes to get my ass off the floor from laughing so hard. Thanks for making lean real - and fun. Nils

If you look at the large "batch" sizes served to you at a restaurant, there *is* a certain efficiency. Plating a meal, of any size, requires a somewhat fixed labor content, hence fixed cost. A larger portion has only slightly higher material costs. It's perfectly rational, from an economic standpoint, for the restaurant and the diner.

Think about drink prices at Starbucks. Why is a 20 oz only slightly more expensive than a 12 oz? Because the fixed labor cost is the same to make either drink (I know prices are market bearing, not driven by cost, but I digress).

We're cheating ourselves (as a customer) by accepting the smaller portions. It wouldn't add much to the restaurant's bottom line.

The key is to eat half your dinner and bring the rest home for lunch. That's the real money saver, but you're right, it requires discipline.

I know the president of a small company that manufactures prosthetic devices. They've been implementing lean practices for several years now with wonderful results.

The president is now trying to bring lean to his personal work processes. One of the first steps he took was to buy a smaller desk: with less room on his desktop, he kept less paper piled up there. Looking at the paper he managed as the product he was working on, he realized that the accumulation of information on his desk represented batch & queue processing and the accumulation of work-in-process inventory.

He reports that information moves through him more quickly, his staff gets answers in a more timely fashion, and he feels less stress.

Later this year he's planning on buying another desk about 50% smaller.

Mark! It's back to remedial Lean 101 training for you! Batch efficiency?! Fixed labor costs?! Eat half the dinner and bring the rest home? Isn't that just like making twice as much as is required and sticking the leftovers in Finished Goods hoping a customer will buy them? Perishable finished goods at that! Value, not cost. And value to me is getting exactly what I need, right now.

No, I don't think so Kevin. It's never good to be impractical or dogmatic about small batches. If setup times are a certain time/cost, EOQ *does* make sense. The key is not take the setup cost/time as given, hence SMED and smaller batch sizes. But, you don't jump to smaller batch sizes without first cutting the fixed setup costs. Non-lean thinkers would assume the setup time/cost is fixed and can't be improved. Lean thinkers would make the improvements.

In a restaurant, I don't know what the parallel to reducing batch sizes would be.

What would you do?

Producing smaller portions with the same fixed costs is reducing value, not reducing cost.

I understand what you're saying, but I think you're not looking at the broader picture to capture all - value stream - costs. Take your Starbucks example. Yes, the fixed labor cost in actually delivering the 20oz is virtually identical to the 12oz. But the time it takes to create the pot of coffee is is also fixed (and about 5+ minutes when accounting for grinding beans etc). You get almost twice the output with 12oz than 20oz. Raw material costs are similar... the difference in cup/lid cost is negligible but almost twice as much beans are used with the larger. And that raw material, even with the purchasing power of Starbucks, is a surprising percentage of final price. Individually made espressos better represent what you describe however, with the exception of raw material. But I'm cheap and usually just buy a drip.

Restaurants are interesting. I know of one local higher-end restaurant that does have "half portions" on its menu. From the variety on their menu, I doubt much can be made ahead of time. So do they use smaller cooking dishes? Smaller stoves? In some cases that would require different recipes to accomodate different cooking. I may have to take a walk back into their kitchen some time.

Most restaurants assume they know best what the customer values, and provide volume, variety or the "special" when in fact they have not at all asked customers "What would you like to eat today, and how much?" If the ideal process is safe, high quality, just in time delivery and low cost, most restaurants fail miserably. Salad bar, anyone?

Mark is right. A single plate is a small batch size. Going smaller than that is pushing the limits.

I suppose smaller portions would allow smaller refrigerators stoves grills plates etc. Restaurants are high volume low mix environments. You could probably reduce the time to switch between different foods and tools with lean methods somewhat. But I dont see the amount of time customer spend with waiters decreasing, nor the cost of operating the restaurant building, unless of course smaller portions create smaller customers who take up less space and more are crammed at closer spaced tables.

Now that i think about it. Subway restaurants always seemed pretty lean to me!

Kevin, you visited my blog, so I had to visit yours. I will keep visiting.

This is really interesting discussion. I jokingly tell my girlfriend that my motto is "If some is good, more is better".

This attitude is also relfected in the US in the size of some homes(and elsewhere), I guess being built to supposedly impress- e.g., the 8000 square foot homes with two people living in them...One couple I know was visiting one of these homes, and the owners said they had rooms they didn't even use and had no idea how they could use them. Whoa.

Regarding food, look at Europe where typically restaurant servings are considerably smaller than ours. So are the refrigerators and stoves. And in general, I think, so are peoples' guts, although obesity is "spreading" there, too.

As a brand new blogger back in February I wrote a post titled "Is Bigger Always Better?" It relates.


Stuart Baker

Wouldn't it be "lean" if the waiter delivered food one bite at a time? ;-)

Seems silly right? But isn't that "just in time" food delivery?

Do you drive to the store to buy a can of soda each time or do you buy a 6 pack or 12 pack?

Hi all

Stuart pointed me to this discussion.
As European I can indeed acknowledge that sizes here are smaller (super-sizing is only just starting to get known - bad move. Obesity in on the increase, but mainly due to eating the wrong kind of food and not enough exercise). But the first Chinese restaurants in The Netherlands (where I originally come from) had to get used to the large sizes these large Europeans seem to eat ;-)

It's cultural I think. Famous answer in 'famous' Haught Cuisine Reaturant when waiter asked diner "How did you find your steak": underneath two peas.

IMHO it would be better to reduce the size of the plates: looks full and plenty - value still perceived (if the food is of good quality of course)
(Don't take me wrong, never been to the US of A, so cannot make proper comparison)

Karin H. (Keep It Simple Sweetheart, specially in business)

Mark- that's a good dose of reality. It does bring to mind the very early days of the contract manufacturing company I started five or so years ago. In an attempt to really drive lean (and conserve cash) I asked the admin/janitor/customer service person to buy absolute minimal supplies. She came to me a few days later and asked if I really wanted her to only buy one roll of toilet paper at a time. That policy changed pretty quickly.

The discussions from a European perspective are interesting. I'm always amazed which posts get the most comments... especially on weekends.

I was intrigued by Mike's comment that "restaurants are high volume low mix environments." Really? I think quite the opposite. Perhaps it has to do with the type of restaurant. McDonalds is high volume low mix but a fine dining establishment is a high volume low mix. Lots of menu items but only certain seatings each night. The kitchen would operate completely differently in each case. Fine dining is a job shop and McDonalds is an assembly line. Fine dining has to be one piece flow but McDonalds could benefit from one piece flow - less stale food! In fine dininig raw material is a smaller part of cost with most being the value of knowledge of the chef. Intiguing discussion - I will never look at a restaurant the same way again!

Jill- you just eat at better restaurants than Mike!


I meant high mix low volume... hmm .. late night incoherency on my part. I guess you could also argue its high volme antd high mix. Sorry bout that.

I was starting to think about this in terms of food kanbans when i remebered that story of Taichi Ohno and how he came up with the idea after visiting american grocery stores lol.

Im a painter, worked with HVLP high volume low pressure gun for years heh.

Heres a blast from the past that references that story.

Did anyone watch the tv reality show Hells Kitchen. A bunch of chefs competed to be Gordon Ramesys protege and open their own restaurant.

Chef Ramsey would scream about quality control. IN the beginning epsidone the yields were so low that most of the food ended up filling the dumpsters. I guess you cuold say the andon was him swearing an throwing the food in the trash or litterly throwing it at the young chefs. Only when they quality was perfect woudl he alow it to go. Most customers didnt even get served the first night. He was also crazy about takt time. Everyone had to work togther so every food on the plate finshed cooking at exactly same time. Otherwise something wouldnt be fresh and the plate would go in the trash. It had to be JIT. They also had to learn so many different foods. In the end the winner got her own restauraunt in a muilti-billion dollar resort in las vegas.

Cavemen and dinosaurs never coexisted.

Restaurants are a mixture of one-piece flow and batch processing. (Am a former restaurateur) Customer preference drives everything in a successful restaurant. If people did not want large portions, TGI Friday's, Applebee's, and the rest would go under. Since they are successful, I guess the customers are being given the value they desire.

With regard to the comments about making deceisons about the marginal cost of offering larger quantities of a unit I think these deceisons are ignoring the customer. Eventhough it is marginally cheaper to offer a larger size because set-up/prep/deliver is fixed, when you offer more than what the customer wants than you are not offering more value but just more waste. If I get a soda that is twice as big than I'm going to drink i'm just not going to drink the other half. Then a waiter/waitress will have wasted twice as much time to pour it. The restaurant will consume twice as much soda. There will also be waste associated with disposing the excess (larger cups, trash, ice etc). Anytime you aren't matching your customer's consumption size than you are wasting, regardless of marginal cost justifications. The same can be said of the marginal cost of more square feet in your home. I'd like to think bigger is better has been made an "american slogan" by marketers doing this marginal cost justification rather than consumers actually believing it. Value becomes relative for a consumer who isn't really sure what their consumption size is. In that case consumers become swayed by perceived value as opposed to actual consumption. Who honestly believes in consuming more than they need? Its the true hidden waste in society....

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