Background
Acme Oyster House is a 6-unit Louisiana-style seafood chain based in New Orleans. They have been satisfying the taste-buds of their customers since 1910. Acme shucks well over 3.6 million fresh oysters a year; that’s almost 10,000 oysters a day and doesn’t even include the fried ones!
Challenge
After nearly 100 years of operating in one location, Acme Oyster House has expanded by opening 4 new restaurants. With the expansion, it became harder to track the inventory purchasing and usage data that Acme relied upon to control their F&B costs. They were very pleased with their Great Plains Dynamics accounting software, but needed to move from using Microsoft Excel spreadsheets, to a full-blown inventory system.
Solution
Compeat (now R365) was selected as the inventory solution for Acme Oyster House, because as Jeremy DeBlieux, Director of New Business Development said, “I have a lot of experience with other inventory systems, and I recognized Compeat’s superiority.” Compeat’s robust inventory capabilities and reporting were a perfect match for Acme’s business needs.
Results
After an intensive set up process to get all of their inventory items, prep items, and menu items defined in the Compeat system, Acme was quickly able to identify areas where they had problems. Compeat’s reporting revealed two areas of concern – portioning and ordering. Compeat’s theoretical cost reports showed Acme that they had a portioning problem on some of their recipes. In one instance, a particular inventory item is used in just one recipe. The report revealed that this item’s actual usage was much higher than its Theoretical usage, resulting in higher than expected food costs. Knowing this, Acme investigated and determined the recipe was not being accurately followed. With retraining, this inventory item’s actual usage was corrected, allowing Acme to meet their desired cost.
After an intensive set up process to get all of their inventory items, prep items, and menu items defined in the Compeat system, Acme was quickly able to identify areas where they had problems. Compeat’s reporting revealed two areas of concern – portioning and ordering.
“Before Compeat, we tracked theoretical food costs using a series of spreadsheets. This was inaccurate and cumbersome. If an item’s price changed, it had to be changed in each recipe and for each restaurant.”
– Sheri Baker Chief Financial Officer
After an intensive set up process to get all of their inventory items, prep items, and menu items defined in the Compeat system, Acme was quickly able to identify areas where they had problems. Compeat’s reporting revealed two areas of concern – portioning and ordering.
Another cost savings came when an ordering problem was revealed by a Compeat report that compares inventory item costs for multiple stores side by side.
A vendor was charging different prices for the same items at different restaurants. Acme realized they needed to standardize ordering among their stores; therefore, they employed Compeat’s features for price enforcement: on some items they allow a range of prices, on other items, only a specific price is allowed. All pricing is now centrally managed.Since Acme began using Compeat, food costs, across the board, have come down 3% – 5%. According to Acme’s Director of New Business Operations, overall COGS has been reduced by 2½ points, from 2002 to 2003. He states, “To call this a significant reduction is an understatement.”
Compeat consists of the following fully-integrated modules, each of which can stand alone, or work seamlessly with the others: Salesmix and DSR Polling, General Accounting, Inventory, and Payroll.
Now that Acme has used the Compeat Salesmix, DSR Polling, and Inventory features for two years, they have decided to begin using Compeat as their general accounting package. This will eliminate the cost of owning and maintaining software.Sheri Baker, Acme’s CFO states, “Our Great Plains software was a few versions old, so we had to decide whether to continue with Great Plains, or make a change. Because we already used Compeat for inventory, we looked at what it could provide for general accounting. We determined that because it is so geared to our industry, and there was no additional software cost, it was just the obvious choice.”
While Acme continues to use Compeat for inventory and polling of daily sales, the process of migrating to total accounting is underway. Acme looks forward to utilizing Compeat’s many unique features, including centralized bill paying, inter-company transactions, and much more, to streamline their business processes.
“We expected to lower our food costs, but we didn’t know they would go so much lower, or how quickly it would occur. Compeat is the tool that made it possible.”
– Jeremy Deblieux Director of New Business Operation
