The Renovation Question – TO REPAIR OR REPLACE?

In Concept & Design, Feature Articles, Vol. 5

 

24993485For most businesses in whichever industry it may be, there will be a time where owners think of revamping or renovating the operation site. Improvements not only refresh the working environment; it can also mean improved efficiency and productivity for some businesses, particularly one in foodservice where customer satisfaction is most important. Renovation or refurbishment can mean to fix up existing facilities to look better or to completely tear down and rebuild with a new idea. With that in mind, where should a business factor this exercise in their annual plan?

Common reasons for restaurants to renovate are to update its look and feel; strengthening its brand as a place that keeps up-to-date with consumer trends yet maintaining its unique identity. Adding to that, io-consultants Pte. Ltd., shared that updating of production kitchens could be required due to an increase in production capacity, to make way for new product lines or to improve productivity by adopting automation. Yet, do you have the funds to cover the expenses of increasing the potential of your business? Hence, io-consultants advises to allocate a budget and timeframe to study what needs to be done and how would the works be carried out; and the ideal timeframe to study, evaluate and seek recommendations which can take 1-3 months, depending on the complexity.

For businesses with limited budgets, discuss the possibility with your consultant to carry out the renovation over a period of time to allow the individual area to roll in the profits of its update and use that funds to work on the next area – this would concern the aesthetics more than the operations side. This is because the kitchen, service area and equipment are interrelated – in order to achieve a fully integrated operating space that is seamless and safe to work in, according to Mr Tan Hang Seong, Managing Director of io-consultants. That said, implementation can still be done in separate parts with proper planning so that interruptions to the operations are minimal and complement one another therefore it is important to study each area in detail and upgrade; alongside executing protection and prevention measures especially in a food facility.
ONE MAN’S TRASH, ANOTHER BUSINESS’ TREASURE?
Often times, we hear success stories of someone picking up an existing business that was going the downhill route or making an abandoned site a flourishing endeavour, which of course depends on the location, how the idea jives with the target audience and marketing efforts. In terms of technical set-up, io-consultants opines that re-planning would be the first thing to do especially if you intend to transform the original purpose of the facility to fit your unique concept and areas to consider include:

a) location – is the facility placed in a certified safe area to produce food and beverage?
b) building specifications – space for exhaust facility, necessary equipment and the sufficient power capacity, as well as drainage system. If you are in food production, look at whether there is space for storage and logistics (loading/unloading)

Refurbishing is unique to each business, requiring a different set of issues to mull over – one of the key in driving possibility for success is thorough planning to ensure that the facility is reworked to best achieve your intentions, and perhaps you could set a line on the extent of changes you are willing and able to afford to turn this underperforming facility into the place of your dreams.

Speaking of your dream establishment, aside from picking up from someone, there can be the unfortunate situation of business not doing as well as expected and one of your ideas to turn things around can be renovations. The question is; how well does it work? Mr Tan said, many of these incidences occur due to lack of planning and rushed implementation therefore his consultants believe in spending time on drawing out the details as it is easier to make changes on paper than during construction or installation which is costlier and has a wider margin for error due to the involvement of many hands. He shares that renovation can be helpful if you engage the right party who understands the underlying problems and provides solutions according to your budget or way of doing things but you should expect changes as the consultants would develop innovations to help you work better towards increased visibility and profitability.

THE TOOLS THAT RUN BUSINESSES
There is not much point to have a beautifully furnished establishment but the workhorses are not up to their best performance. The rule for equipment is “IT MUST WORK WHEN IT IS SUPPOSED TO”. Equipment are subjected to wear and tear and while some are still able to per form despite its less than prime condition, some are prone to go into ‘shutdown’ mode anytime. That said, how do you decide what goes and what stays?

PLANNED VS. UNPLANNED
Usually, big establishments have a timeline or a shelf life for its equipment with a scheduled upgrade already planned out and a budget allocated for the exercise and some even anticipating a complete stop to business stretching from weeks to months depending on the scale of upgrades. These scheduled changes could also be something like a change in the served menu, relocation to a different par t of the building or simply an extension. And in many cases, most equipment are upgraded to a newer version. For smaller establishments that work with a tight budget, machines are often maximised till its lifetime and will only be replaced when it is completely down. This unplanned upgrade or replacement can disrupt operations if the equipment is specialty equipment that has to be imported or require a few days of delivery and installation.

In this industry, it is also common for many to buy over an entire premise from the former operator and the consideration might be whether to repair or replace equipment before star ting business on new grounds. Speaking from experience, Alpha Catering Equipment Pte Ltd’s Senior Sales Manager in charge of Projects, Mr Frankie Lim advises to “make a list of all your equipment in-house before you do anything to the “new” premise. Then get your service company to come and assess all the equipment as they should be able to advise you what needs to be changed or the extent of repair work necessary, if any. This would give you a better view of your overall budget and expenses when taking over this new establishment.” Maintenance is important for equipment’s performance; but due to being operated by people of different background and training, there are cases of equipment breaking down. And like everything manufactured, sometimes it is just unfortunate that the particular unit delivered to you has faulty components or glitches compared to other units on the same production line.

How then do you evaluate when to repair the machine or when to invest in a new one? We break it down to 3 factors:

1. TO REPAIR
Petty repairs such as gaskets for your fridges, knobs for your stoves or thermostats and heaters are common items that would require regular changing. These repairs are nominal and don’t interrupt the function therefore not requiring a complete change. Although there might be new versions of the similar equipment with a fancier colour or a small additional upgrade, always evaluate whether the costs is necessary. If the per formance of the current equipment is not compromised with these minor repairs, consider keeping them. Small repairs like these can be easily done in-house and many times, these repairs result from poor maintenance that was not done in the kitchen. Look into setting up a easy maintenance guide for your own kitchen in page 84.

6002663However, if these repairs are frequent, it might be better to change the equipment instead. Monitoring your repair costs would make it easier for you to evaluate the equipments’ value as well. Also follow up on the diagnosed problems so that you may address them with your staff on the need for these repeated repairs with training on the proper use and care for the particular equipment. On the other hand, if these repairs are attributed to overworking, you should look into replacing or upgrading the equipment.

 

121346732. REPLACE OR UPGRADE
This is the next level when it comes to assessing your equipment for the year. Equipment in this category are normally used throughout the day and go through wear and tear. The best reason for upgrading is the increase in volume. We recommend that you look at space versus capacity. A single, bigger equipment to handle higher volumes might make more sense, but also study your flow of customers. If they are entering your premises at an unpredictable flow, firing up the whole cabinet to cook or heat might burn more energy than necessary. Instead, having 2 cabinets operating at different temperatures might help reduce the amount of waste; other wise operate them alternately to maintain the quality of your food.

Another reason to consider replacement is equipment using too much energy to operate. For example, a dishwasher is an expensive machine to run but its benefits cannot be negotiated when it comes to hygiene. We sought an expert’s advice and Rudolf Kitzbichler, Regional Manager of MEIKO, says that users can make an estimated calculation on the increasing costs of an old machine against the benefits of the latest technology and come up with a gauge on return-on-investment. This in turn, gives the owner an idea in answering the basic question of “how much do I save with a new machine and at which point do I get the investment back?”

Equipment that have to be manually monitored during service should be considered for replacement with equipment that you can control with a touch of the button. Automation advances in big kitchen equipment such as combi ovens, dishwashers or even boiling kettles results in new functions being regularly added into new models and at times, upgrading the software may seem adequate. In Rudolf’s opinion, upgrading can provide equipment more flexibility but it does not change the general physics and construction of the machine thus it is an intermediate solution and there will be a point of time where it no longer supports upgrading and you would probably see the need for a newer version; much like how we view our mobile phones and its technology.

It goes without saying that new equipment comes with the benefit of training by the manufacturer and more importantly – warranty for its parts and components. On this note, manufacturers’ role is to ensure consistency in updating their customers on the benefits of latest developments and provide advice for cost efficiency from the equipment as well as for the entire operation.
After getting the side of the coin from a manufacturer, Rudolf suggests that owners speak to an independent Foodservice consultant for a balanced view.

147267993. REVAMPING YOUR MENU OR CONCEPTS
You are planning to revamp your concept entirely, for example, changing from an Italian to a Japanese restaurant. Equipment generally perform the same functions but a revamp might see a sudden need to
have additional equipment such as freezers or chillers compared to before or perhaps lesser stoves with the new menu. This would also affect you if you are taking over an establishment that is going out of business. What happens to all these old equipment? Going up equipment heaven would be quite a waste as it can usually be sold as scrap metal. Otherwise, if you ask around, you can find some manufacturers who run a trade-in program that might get you returns in some form.

In conclusion, businesses ought to take into account both its exterior and machinery when evaluating whether to repair or refresh its establishment to stay sustainable and relevant to its customers. Together with a practical plan and timeframe, the investment to improve and make changes can be a rewarding one.

We wish to thank the following individuals for their insights
and opinions reflected in this article:

Mr Tan Hang Seong, io-consultants Pte. Ltd.
Mr Frankie Lim, Alpha Catering Equipment Pte. Ltd.
Mr Rudolf Kitzbichler, MEIKO Maschinenbau GmbH & Co. KG

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