Chapter Eight



Chapter Nine

Managed Services

Overview Page Object.

|Managed services consists of all foodservice operations as follows: airlines, military, elementary |310 |1 |

|and secondary schools, colleges and universities, healthcare facilities, and business and industry, | | |

|leisure and recreation, conference centers, airports, and travel plazas. | | |

|Managed services are different from commercial operations in several ways: |310 |2 |

|Managed service operators must meet the needs of both the guest and the client. In a restaurant, the | | |

|challenge is to please the guest. | | |

|Often, they have “captive” audiences. | | |

|Many managed service operations are housed in “host” organizations that do not have foodservice as | | |

|their primary business. | | |

|Most managed service operations prepare food in large quantities to be served during specific hours. | | |

|This is called batch cooking. | | |

|The volume of business is more consistent and easier to forecast. | | |

Airlines Page Object.

|In-flight Foodservice | | |

|Food has become a major competitive factor among airlines. Airlines may provide meals from their own |311 |1, 2, 5 |

|in-flight business or have the food provided by a contractor. | | |

| | | |

|In-flight foodservice is a complex process. All airlines have a limited menu. The food must be able to |311 |2 |

|withstand transportation conditions and extended holding times (hot or cold). The meal must also be | | |

|appealing and able to fit in the limited passenger eating space. | | |

|Gate Gourmet International is the largest in-flight foodservice provider in terms of sales. Sky Chef |311 |1, 2, 5 |

|is another company in the field. | | |

|In-flight foodservice management operators plan the menus, develop the product specifications, and |312 |1, 2, 5 |

|arrange the purchasing contracts. Many airlines place a high priority on controlling meal costs. Some| | |

|limit the cost for an in-flight meal to $6.00, some limit the menu choices, while others offer snacks | | |

|rather than meals on many flights. International flights tend to have better food and beverage | | |

|service. | | |

|Airport Foodservice | | |

|As airlines have decreased their in-flight foodservice, airport restaurants such as popular chain |313 |1, 2, 5 |

|restaurants, along with quick-service restaurants have picked up the business. | | |

Military Page Object.

|Military foodservice is a large and important component of managed foodservice. Even with military |314 |1, 2, 5 |

|downsizing, military foodservice sales are estimated at over $6 billion. | | |

|Services and concepts are being redesigned to better serve the needs of personnel. Efforts are being |314 |1, 2, 5 |

|made to address problems with service delays, inferior products, and inventory controls. | | |

|In many cases, officers’ clubs have been contracted out to foodservice management companies. The |314 |1, 2, 5 |

|clubs have moved emphasis from fine dining to a more casual atmosphere. Menu management strategies | | |

|have also been implemented. | | |

|Another trend is the testing of prepared foods that can be reheated and served without much labor. |315 |1, 2, 5 |

|MREs (meals ready to eat) are standard for troops in the field. Today, a mobile kitchen can be run by| | |

|only two people. | | |

|One problem of privatization of military foodservice operations may arise in the need to provide |315 |1, 2, 5 |

|foodservice in combat situations. In such cases, the military must be able to provide its own | | |

|foodservice. | | |

Elementary and Secondary Schools Page Object.

|In 1946, the United States Government enacted the National School Lunch Act in response to concerns |315 |3 |

|about malnourishment in military recruits. The rationale was that if students received good meals, | | |

|the military would have healthier recruits. | | |

|Today, approximately 26 million children are fed breakfast, lunch, or both each day, at a cost of |316 |3 |

|about $7 billion dollars a year, by the National School Lunch Program. | | |

|A major challenge for the program is to balance nutrition with foods the students like. Many are |316 |1, 3 |

|concerned about the food that young students are eating. Studies show that the food served in many | | |

|school cafeterias exceeds recommended dietary guidelines for fat and sodium content. | | |

|Some schools have on-site kitchens, where the food is prepared, and dining rooms, where the food is |316- |1, 3 |

|served. Large food districts may prepare foods in a central commissary and then distribute them to |317 | |

|schools in the area. Alternatively, some schools purchase ready-to-serve meals that are assembled at | | |

|the meal site. | | |

|The government National School Lunch Program (NSLP) is a huge market for fast food chains. Although |317 |1, 2, 3 |

|entering this market does mean a decrease in revenues, future benefits, such as building brand | | |

|loyalty, can be extremely valuable. | | |

|There has been much debate over the suitability of allowing chain foodservice operations in the school|317 |3 |

|lunch programs. Many parents feel that fast food is not sound nutrition. | | |

|Nutrition Education Programs | | |

|Nutrition education is now required in the nation’s school lunch program. The food pyramid was |320 |3 |

|developed as a part of this effort. | | |

Colleges and Universities Page Object.

|College and university foodservice operations are complex and diverse. Residence halls, |320 |4 |

|cafeterias/student unions, faculty clubs, sports concessions, conferences, convenience stores, | | |

|administrative catering, and outside catering are the major components of this segment of | | |

|non-commercial foodservice. | | |

|On-campus dining can be a challenge because the clientele lives on campus and eats most of its meals |320 |4 |

|at the campus facilities. Students, faculty, and staff often become bored with the surroundings and | | |

|the menu offerings. | | |

| | | |

| | | |

|Budgeting, in such operations, is simplified because the on-campus students have already paid for |320 |4 |

|their meals and, therefore, numbers are easier to forecast. | | |

|College foodservice operations tend to offer students a variety of meal plans. Rather than the old |320 |4 |

|“board plan,” where students paid one fee for all meals – whether they ate them or not, many schools | | |

|have adopted a pre-paid credit plan, where students pay a dollar amount up front, and as they eat | | |

|meals over the course of the term or school year, the dollar amount of each meal is subtracted from | | |

|the student’s account. | | |

|Student Unions | | |

|The college student union offers a variety of managed services that cater to the needs of a diverse |322 |4 |

|student body. Among services offered are cafeteria foodservices, beverage foodservices, branded | | |

|quick-service restaurants, and take-out foodservices. | | |

|Offering a diverse menu at a good price is very important to the success of campus operations. Like |323 |4 |

|public schools, some college campuses have opted to allow restaurant chains to open on campus. The | | |

|restaurant pays fees, either to the contract food company directly or to the college. Offering | | |

|take-out service is another trend developing in college foodservice. | | |

|Responsibilities in Managed Services | | |

|A foodservice manager’s responsibilities in a small or midsize operation are more extensive than those|326, |4 |

|of managers of larger operations. In addition to foodservice, key areas of responsibility include: |328 | |

|Employee Relations, Human Resource Management, Financial/Budgeting, Safety Administration, Safety | | |

|Budgeting, Food Production/Service, Sanitation/Food Borne Illness Prevention, Purchasing/Recruiting, | | |

|and Staff Training/Development. (See lists on text pp. 326 & 328.) | | |

Health Care Facilities Page Object.

|Healthcare foodservice operations are very complex because they must meet the needs of clientele with |330 |5 |

|special needs. Service is provided by tray, in the cafeteria, dining room, coffee shop, catering, and| | |

|vending. | | |

|The needs and desires of both the patients and the health care workers must be provided for. Meals |331 |5 |

|must be consumed in a short period of time (30 minutes usually) and must have a varied menu. | | |

| | | |

|Health care foodservice is very labor intensive. Labor accounts for 55% to 66% of operating dollars. |331 |5 |

|For example, the main focus of a hospital foodservice operation is the tray line. In the tray line, | | |

|meals are assembled through a color-coding system to meet requirements specified by the dietitian. | | |

|These trays must be double and triple-checked to be sure each patient gets his/her correct meal. | | |

|Hospital foodservice has evolved to the point where the need for new revenue sources has changed the |331- |5 |

|traditional patient and non-patient meal-service ratios at many institutions. Often the cafeteria is |332 | |

|the greatest revenue generated for the health care foodservice operation. Cash sales to patients, | | |

|their families, and staff have become important contributors to the bottom line in many operations. | | |

|Some operations have branched out into retail bakeries and catering. | | |

|Innovations in preparation, such as sous vide and cook-chill, have allowed for labor savings. |332 |5 |

|Additional savings can be realized through the quantity purchasing, menu management, and the use of | | |

|operating systems to reduce food and labor costs. | | |

|Quick-service chains have also entered this segment of the industry. These chains benefit from |332 |5 |

|long-term leases at very attractive rates compared with a restaurant site. | | |

Business and Industry (B&I) Page Object.

|Important terms to understand in regard to this segment are: Contractors (companies that operate |333 |5 |

|foodservice for the client on a contractual basis), Self- operators (companies that operate their own | | |

|foodservice operations), and Liaison personnel (responsible for translating corporate philosophy to the| | |

|contractor and overseeing the contractor). | | |

|Contractors have about 80% of the B&I market. The remainder is self-operated. A new trend is for one |333 |5 |

|operator to serve several tenants in a building through a central facility. | | |

|B&I operators have begun to offer more diverse menu options. By offering more healthful meal options, |335 |5 |

|operators are meeting the evolving needs of their clients. | | |

|The resources largely determine the type of service offered by B&I operators: money, time, space, and |335 |5 |

|expertise. Typical manners of service include: full-service cafeterias with straight, line scatter, or| | |

|mobile systems, or limited service cafeterias offering parts of the full-service cafeteria, fast-food | | |

|service, cart and mobile service, and executive dining rooms. | | |

Leisure and Recreation Page Object.

|Leisure and recreation is probably the most fun area of the foodservice industry to work in: stadiums, |336 |5 |

|arenas, national parks, state parks, zoos, aquariums, and other venues where food and beverage are | | |

|provided for large numbers of people, are leisure and recreation operations. | | |

| | | |

|Stadium Points of Service | | |

|Points of service include vendors, concession stands, and restaurants. A major point of service is the | | |

|food and beverage offered in the premium seating areas known as superboxes, suites, and skyboxes. | | |

| |336 |5 |

|It is possible for all of these points of service to go on all at once serving upwards of 60,000 to | | |

|70,000 fans. To feed all these people many foodservice companies have contracts with the stadiums and | | |

|arenas. | | |

| |337 |5 |

|Other Facilities | | |

|The same managed services companies that serve the stadiums and arenas contract most U.S national | | |

|parks. These parks have hotels, restaurants, snack bars, gift shops and myriad other service outlets. | | |

|Other venues that require food and beverage service are golf and tennis tournaments. | | |

| | | |

|Advantages and Disadvantages |337 |5 |

|Advantages of a foodservice career in this segment include the unique opportunity to see professional | | |

|and amateur sporting events as much as you please, to be in rural, scenic areas and enjoy the great | | |

|outdoors, to provide a diverse set of services for the guests or fans, and to have a set work schedule.| | |

|With recent growth in this segment, many new career openings are now being offered. | | |

| | | |

|Disadvantages include large amounts of people to serve in short periods of time; a work schedule of | | |

|weekends, holidays, nights; impersonal service, less creativity with food, seasonal employees, and an |337 |5 |

|on/off season work schedule. | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| |337 |5 |

Trends in Managed Services Page Object.

|College and university foodservice managers face increasing challenges. There is an ever-present |338 |4 |

|problem of trying to balance rising costs with decreased revenues. | | |

|Some of the challenges have come directly from changes like ending blanket board charges in favor of |338 |4 |

|“pay as you go” systems. Food and utilities costs have continued to rise. Employing students has | | |

|helped to reduce labor costs. The use of food-to-go, campus cards, 24-hour service, business in | | |

|health care and nursing homes, and carts at vantage points has increased (see full list of trends on | | |

|text p. 338). | | |

Check Your Knowledge, p. 314

1) Question: What are managed services?

Answer: Managed services are services that can be leased to professional management companies.

2) Question: Why would companies use contract management?

Answer: financial, quality of program, recruitment, expertise, resources, labor relations & other support, outsourcing. (See box on p. 310).

Check Your Knowledge, p. 329

1) Question: In your own words, define in-flight foodservice.

Answer: In-flight foodservice is a complex logistical operation. The food must be able to withstand the transport conditions and the extended hot or cold holding period from the time of preparation to the time of service. If a food item is to be served hot, it must be able to re-thermalize well on the plate. Other complications involve time, space, and appearance (p. 311).

2) Question: What are some of the challenges faced by in-flight foodservice operators? What can be done to solve these problems?

Answer: As mentioned in the previous question, challenges such as time, transportation, re-thermalization, lack of space, and so on, are overcome by the expertise and specialized services of an in-flight caterer. The logistical operations are so complex that most airlines choose to contract out their in-flight catering services (p. 311).

3) Question: Name the foodservice operations that constitute managed services.

Answer: These include: airlines, military, elementary and secondary schools, colleges, healthcare facilities, business and industry, leisure and recreation, conference centers, airports, travel plazas (p. 310).

4) Question: How is each foodservice operation characterized?

Answer: Features that distinguish managed services from commercial foodservices include:

a. Managed service operators must meet needs of both the guest and the client (i.e., the institution). In a restaurant, the goal is to please the guest.

b. Managed services guests may or may not have alternate dining options available.

c. Many managed operations are housed in host organizations that do not have foodservice as their primary business.

d. Most managed services operations produce food in large quantity batches for consumption within fixed time periods.

e. Volume of business in managed services is more consistent and easier to forecast (p. 310).

5) Question: In small groups, share the differences between the foodservice operations; then share with the class.

Answer: Note to instructor: This is a group activity designed to promote interactive learning.

Check Your Knowledge, p. 336

1) Question: What roles other than those strictly related to foodservice does the foodservice manager perform?

Answer: These roles include: (pp. 326-28)

Employee Relations

Human Resource Management

Financial Budgeting

Safety Administration and Budget

Food Production/Service

Sanitation/FBI (food-borne illness) Prevention

Purchasing/Recruiting

Staff Training/Development

2) Question: Briefly explain some of the tasks the foodservice manager performs. What makes each task so important?

Answer: Looking at the previous question’s response we will discuss three tasks and their importance. (pp. 326-28).

a. Employee Relations: It is important for the manager to maintain employee relations in order to keep the organization running efficiently and effectively. Employee relations involve discussing and establishing:

Business vs. personal need

Rewards and recognition

Substance abuse guidelines and programs

Positive work environment

Coaching/facilitating vs. directing

b. Human Resource Management: Although a position or separate human resources department may exist, management at all levels and departments plays a significant role in human resources. The importance can be illustrated by the following tasks:

Recruiting/training/evaluating

Wage/salary administration

Compliance with Federal/State Laws/EEO/Senate Bill 198

Disciplinary actions/termination/unemployment

c. Food Production/Service: The foodservice manager oversees production and service to ensure quality performance and efficient production. Management is involved with:

Menu/recipe development

Menu mix vs. competition

Food waste/leftover utilization

Production records/Control/Merchandising

Presentation

Answers to Chapter 9 Review Questions

1) Managed services operate on a non-profit-oriented basis. Foodservice operations that are classified as non-profit include airlines, military, elementary schools, universities, health care, and business.

2) There are several features that distinguish non-commercial and commercial foodservice operations. Managed services need to satisfy the guest as well as the client and usually produce food in large quantities. They deal with a volume of business that is more consistent and easier to cater to because the number of meals and portion sizes are pre-planned. As a result of this, hours and benefits are better than those of commercial restaurants, particularly since weekends tend to be quieter than weekdays.

3) School foodservice programs face the challenge of providing good nutrition, but at the same time maintaining sales. Another issue is whether or not to provide free meals to students. Proponents of the program maintain that better nourished children have a better span of attention and are less likely to be absent from school.

4) The National School Lunch Program (NSLP) provides federal funding for school foodservice. Under NSLP regulations, schools must meet dietary guidelines in order to receive funding. Under these regulations, students must select three to five meal components from a commonly called “Type A” menu, which has limited amounts of fat and saturated fat.

5) A recent trend in college foodservice management is the requirement of nutrition education. On-campus dining is a challenge for foodservice managers because the students eat all their meals on-campus and may quickly become bored with the menu. As an alternative, college food operations offer a variety of meal plans, such as offering students a prepaid credit card that allows them to use the card at various campus outlets and have the value deducted from their credit balance. Recently, many campuses have welcomed fast-food restaurants on campus and the opportunity for take-out foodservice. College foodservice managers need to balance rising costs with declining enrollment and a reduction in state funding. One solution is to fill positions with student employees and make more use of scratch cooking and convenience food, in addition to efficient labor scheduling.

6) With the modern trend of health and nutrition consciousness, fast-food chains on campus may attract more customers than the cafeteria, which offers more healthy choices. On the other hand, fast-food chains offer a win-win situation because they are more convenient in satisfying a fast-paced community. Although they may mean loss of students in the cafeteria, they pay a fee to the food-service company or university which evens out the business of the cafeteria. Overall, competition is good for everyone concerned.

7) Health care foodservices need to provide special meals with specific dietary requirements to the right people in a limited amount of time. With the stay and the number of patients declining, hospital foodservices need to find new ways of generating revenues. In an effort to reduce cost and labor, there has been an increase in “help-yourself” food stations including buffets, salad bars, and dessert bars. Also, entry into the delivery business, like pizza, helps keep costs down.

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