Inside the Cheesecake Factory
Atul Gawande has an article in the New Yorker about what medicine can learn from the Cheesecake Factory restaurant chain. Dr. Gawande doesn't quite make it explicit, but there's passage that does a wonderful job of explaining how the profit motive in capitalism reinforces the virtue of thrift:
They watched for waste—wasted food, wasted time, wasted effort. The formula was Business 101: Use the right amount of goods and labor to deliver what customers want and no more. Anything more is waste, and waste is lost profit.
I spoke to David Gordon, the company's chief operating officer. ...More difficult is the problem of wasted food. Although the company buys in bulk from regional suppliers, groceries are the biggest expense after labor, and the most unpredictable. Everything—the chicken, the beef, the lettuce, the eggs, and all the rest—has a shelf life. If a restaurant were to stock too much, it could end up throwing away hundreds of thousands of dollars' worth of food. If a restaurant stocks too little, it will have to tell customers that their favorite dish is not available, and they may never come back. Groceries, Gordon said, can kill a restaurant.
The company's target last year was at least 97.5-per-cent efficiency: the managers aimed at throwing away no more than 2.5 per cent of the groceries they bought, without running out. This seemed to me an absurd target. Achieving it would require knowing in advance almost exactly how many customers would be coming in and what they were going to want, then insuring that the cooks didn't spill or toss or waste anything. Yet this is precisely what the organization has learned to do. The chain-restaurant industry has produced a field of computer analytics known as "guest forecasting."
... The company has even learned how to make adjustments for the weather or for scheduled events like playoff games that keep people at home.
The left used to criticize capitalism for being wasteful — all that money spent on advertising, and why do you need so many different brands of each product on the grocery shelves? But if you think waste is immoral, it turns out that capitalism does a pretty ruthlessly efficient job of wringing it out.
by Editor | Aug 6, 2012 at 2:46 pm
Related Topics: Health Care
receive the latest by email: subscribe to the free futureofcapitalism.com mailing list