assignment #4
347
C h a p t e r 8
Managed Services
L E A r N i N G o B J E C T i V E S
after reading and studying this chapter, you should be able to:
• Outline the different managed services segments.
• Describe the five factors that distinguish managed services operations from commercial ones.
• explain the need for and trends in elementary and secondary school foodservice.
• Describe the complexities in college and university foodservice.
• Identify characteristics and trends in health care, business and industry, and leisure and recreation foodservices.
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Overview Managed services consist of foodservice and related operations and are used most often in the following public and private institutions:
• airlines
• Military
• elementary and secondary schools
• Colleges and universities
• health care facilities
• Business and industry (B&I)
• Leisure and recreation organizations
• Conference centers
• airports
• travel plazas
Companies, public and private facilities institutions, as well as organizations such as educational or health care organizations must decide if they want to operate their foodservice and related operations themselves or whether they want to contract them out to a managed services company. If they decide to operate their own foodservice, they may realize some cost savings; however, if they lack the expertise, they may prefer to invite contractors to submit proposals. a contractor would be expected to make a presentation and to formally discuss and finalize all contractual details.
Several features distinguish managed services operations from commer- cial foodservices such as restaurants:
• In a restaurant, the challenge is to please the guest. In managed ser- vices, it is necessary to meet both the needs of the guest and the client (i.e., the institution itself).
• In some operations, the guests may or may not have alternative dining options available to them and are a captive clientele. these guests may be eating at the foodservice operation only once or on a daily basis.
• Many managed operations are housed in host organizations that do not have foodservice as their primary business.
• Most managed services operations produce food in large-quantity batches for service and consumption within fixed time periods. For example, batch cooking means to produce a batch of food to serve at 11:30 a.m., another batch to serve at 12:15 p.m., and a third batch to serve at 12:45 p.m., rather than putting out all the food for the whole lunch period at 11:30 a.m. this gives the guests who come to eat later in the serving period as good quality a meal as those who came to eat earlier.
• the volume of business is more consistent and therefore easier to cater. Because it is easier to predict the number of meals and portion sizes, it is easier to plan, organize, produce, and serve meals; therefore, the atmosphere is less hurried than that of a restaurant. Weekends tend to
LearnIng OBjeCtIve 1 Outline the different managed services segments.
LearnIng OBjeCtIve 2 Describe the five factors that distinguish managed services operations from commercial ones.
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be quieter than weekdays in managed services and, overall, the hours and benefits may be better than those of commercial restaurants.
a company or organization might contract its food- or other services for the following reasons:
• Financial
• Quality of program
• recruitment of management and staff
• expertise in management of service departments
• resources available: people, programs, management systems, and information systems
• Labor relations and other support
• Outsourcing of administrative functions1
airlines and airports in-Flight and airport Foodservice When airlines do provide meals, either foodservice comes from their own in-flight business or they have the service provided by a contractor. In-flight food may be prepared in a factory mode at a facility close to but outside the airport. In these cases, the food is prepared and packaged; then it is transported to the departure gates for the appropriate flights. Once the food is loaded onto the aircraft, flight attendants take over serving the food and beverages to passengers.
In-flight foodservice is a complex logistical operation: the food must be able to withstand the transport conditions and the extended hot or cold hold- ing period from the time it is prepared until the time it is served. If a food item is to be served hot, it must be able to rethermalize well on the plate. the meal should also look appetizing and taste good. Finally, all food and bever- age items must be delivered on time and correctly to each departing aircraft.
gate gourmet is the largest in-flight food and related services provider, operating in 28 countries on six continents from 122 flight kitchens and pro- ducing 250 million meals on average annually.2 It is estimated that sales will exceed $2 billion, supported by more than 26,000 employees.
another major player in the in-flight foodservice market is LSg Sky Chefs, headquartered in neu-Isenburg, germany. the LSg Sky Chefs group has the vision to “be the global leader in airline catering and the management of all in-flight service related processes.”3 LSg Sky Chefs consists of 156 companies with more than 208 customer service centers in 54 countries. In 2013, it pro- duced about 532 million airline meals for more than 300 airlines worldwide.4 the in-flight food and related services management operators plan the menus, develop the product specifications, and arrange the purchasing contracts. each airline has a representative who oversees one or more locations and checks on the quality, quantity, and delivery times of all food and beverage items. airlines regard in-flight foodservice as an expense that needs to be controlled. to trim costs, most domestic airlines now sell snacks instead of meals on a
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number of short flights and even on flights that span main meal times. Both gate gourmet and LSg Sky Chefs also now oper- ate onboard retail solutions for most airlines.
International airlines try to stand out by offering superior food and beverages in hopes of attracting more passengers, espe- cially the higher-paying business and first- class passengers. Others reduce or eliminate foodservice as a strategic decision to support lower fares. Because of the length of the flight and the higher price paid for the ticket, international flights have better-quality food and beverage service.
On board, each aircraft has two or three categories of service, usually coach, busi- ness, and first class. First- and business-class passengers usually receive free beverages and upgraded meal items and service. these meals may consist of such items as fresh salmon or filet mignon.
a number of smaller regional and local foodservice operators contract to a variety of airlines at hundreds of airports. Most airports have caterers or foodservice contractors who compete for airline contracts. With several international and U.S. airlines all using U.S. airports, each airline must decide whether to use its own foodservice (if it has one) or to contract with one of several independent operators.
as airlines have decreased their in-flight foodservice, airport restaurants have picked up the business. popular chain restaurants such as tgI Fridays and Chili’s are in several terminals, along with the quick-service restaurants such as McDonald’s and pizza hut. these restaurants supplement airport foodservice offered by local restaurants.
▶ check Your Knowledge
1. What are managed services?
2. Why would companies use contract management?
Military Military foodservice is a large and important component of managed ser- vices. there are about 1.5 million soldiers, sailors, and aviators on active duty in the United States. even with the military downsizing, foodservice sales top $6 billion per year. Base closings have prompted many military foodservice organizations to rethink services and concepts to better meet the needs of their personnel.
Airport restaurants from quick service to casual fine dining have seen an upswing in business as a result of the airlines cutting back on in-flight foodservice.
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c O r P O r a t e P r O F i L e
Sodexo
Sodexo is a leading solutions company in North America, delivering on-site service solutions in corporate, education, health care, govern- ment, and remote site segments. Sodexo’s mission is twofold: Improve the quality of daily life and contribute to the economic, social, and en- vironmental development of the cities, regions, and countries in which it operates.
Sodexo (formerly Sodexho Alliance) was founded in 1966 by a Frenchman named Pierre Bellon with its first service provider in Marseilles, France. Primarily serving schools, restaurants, and hospi- tals, the company soon became internationally successful by signing deals with Belgian foodservice contractors. In 1980, after considerable
success in Europe, Africa, and the Middle East, Sodexho Alliance decided to expand its reach into North and South America. In 1997, the company joined with Universal Ogden Services, a leading U.S. remote-site service provider. The empire grew a year later when Sodexho and Marriott Management Services merged. The merger created a new company called Sodexho Marriott Services. Listed on the New York Stock Exchange, the new com- pany became the market leader in food and management services in the United States. At that time, Sodexho Alliance was the biggest shareholder, holding 48.4 percent of shares on the company’s capital. In 2001, however, Sodexho Alliance acquired 53 percent of the shares in Sodexho Marriott Services, which changed its name to simply Sodexo.
Today, Sodexo has more than 428,000 employees at 33,300 sites in 80 countries and serves 75 million con- sumers daily. In the United States, there are 125,000 employees. The goal of Sodexo is to improve the quality and life of customers and clients all over the United States and Canada. They offer outsourcing solutions to the health care, corporate, and education markets. This includes the following services: housekeeping, groundskeep- ing, foodservice, plant operation and maintenance, and integrated facilities management.
Sodexo’s mission is to create and offer services that contribute to a more pleasant way of life for people wherever and whenever they come together. Its challenge is to continue to make its mission and values come alive through the way in which employees work together to serve the clients and customers. The values of Sodexo are service spirit, team spirit, and spirit of progress.
A leading provider of food and facilities management services in North America, Sodexo provides its services at more than 9,000 client sites, including corporations, colleges and universities, health care organizations, and school districts. They are always looking to develop talent. Sodexo offers internships in foodservice and facilities management businesses as well as in staff positions such as finance, human resources, marketing, and sales. Sodexo believes that workforce diversity is essential to the company’s growth and long-term success. By valu- ing and managing diversity at work, Sodexo can leverage the skills, knowledge, and abilities of all employees to increase employee, client, and customer satisfaction.
Sodexo has received numerous awards; among them are as follows: top ranked in the “services” category of 2010 Global Outsourcing, recognized as a Supersector Worldwide Leader for commitment to sustainable devel- opment, named one of the world’s most ethical companies, number one of World’s Most Admired Companies by Fortune magazine, and one of the best companies for hourly workers by Working Mother magazine.5
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recent trends in military foodservice call for services such as officers’ clubs to be contracted out to foodservice management companies. this change has reduced military costs because many of the officers’ clubs lost money. the clubs now have moved the emphasis from fine dining to a more casual approach with family appeal. Many clubs are renovating their base concept even further, restyling according to theme concepts, such as sports or country western, for example. Other cost-saving measures include menu management, such as the use of a single menu for lunch and dinner (guests seldom eat both meals at the clubs). With proper plating techniques and por- tion size manipulation, a single menu (the same menu) can be created for lunch and dinner, meaning one inventory for both meals and less stock in general. to make this technique work successfully, the menu features several choices for appetizers, entrees, and desserts.
another trend is the testing of prepared foods that can be reheated and served without much labor. technological advances mean that field troops do not eat out of tin cans anymore; instead, they receive their food portions in plastic-and-foil pouches called meals ready-to-eat (Mres). today, mobile field kitchens can be run by just two people, and bulk food supplies have been replaced by pre-portioned, precooked food packed in trays, which then are reheated in boiling water.
Feeding military personnel includes feeding troops and officers in clubs, dining halls, and military hospitals, as well as in the field. as both the budget and the numbers of personnel decrease, the military is downsizing by consoli- dating responsibilities. With fewer people to cook for, fewer cooks are required.
a model for such downsizing is the U.S. Marine Corps, which contracts out foodservice. With smaller numbers, they could not afford to take a marine away from training to work in the dining facilities without affecting military operations. Sodexo has the contract for the U.S. Marine Corps and serves seven bases in 55 barracks, plus clubs, and other related services. In addi- tion, fast-food restaurants such as McDonald’s and Burger King have opened on hundreds of bases; they are now installing express Way kiosks on more bases. the fast-food restaurants on base offer further alternatives for military personnel on the move. One problem that may arise as a result of the down- sizing and contracting out of military foodservice is that it is not likely that McDonald’s could set up on the front line in a combat situation. the military will still have to do its own foodservice when it comes to mobilization.
Lately, military foodservice has been more innovative and creative in applying new ideas. For example, naval Base San Diego Dining Services program Director Steve hammel revaluated the base’s system in terms of overall value, quality, quick service, and their packaging to enlisted personnel. he also looked at how to individualize the system for each base when each base has its own personality. price points are also important, so the base has a $7.50 buffet and a fixed $5 lunch with different offerings every day.6
at another military operation in Fort Campbell, the cafeteria received a $10 million makeover and began a program of healthy eating. Out went the deep-fat fryer and in came rotisserie chicken, so now instead of selling 75 servings of fried chicken they sell 240 portions of rotisserie chicken.7
Smart Choices, created by veterans Canteen Service, is a healthy choices menu approach that gives guests more healthy meal offerings. the campaign
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merges value, health, and wellness that offer a side salad, a bowl of soup, and a bottle of water totaling 235 calories or a sandwich, fruit, and a bottle of water totaling 340 calories. Interestingly, the calories, grams of fat, carbs, and protein are featured alongside the price on the receipt.8
elementary and Secondary Schools the United States government enacted the national School Lunch act in 1946. the rationale was that if students received good meals, the military would have healthier recruits. In addition, such a program would make use of the surplus food that farmers produced.
each day, millions of children are fed free or low-cost breakfast or lunch, or both, in approximately 101,000 schools to more than 31 million children each school day.9 Many challenges currently face elementary and secondary school foodservice. One major challenge is to balance salability with good nutrition. apart from cost and nutritional value, the broader social issue of the universal free meal arises. proponents of the program maintain that better-nourished children have a better attention span, are less likely to be absent from school, and will stay in school longer. Offering free meals to all students also removes the poor-kid stigma from school lunch. Detractors from the universal program say that if we learned anything from the social programs that were implemented during the 1960s, it was that throwing money at problems is not always the best answer. Both sides agree that there is serious concern about what young students are eating. It’s prob- ably no surprise that the percentage of children who eat one serving or less of fruits and vegetables each day (excluding french fries) is as high as it is. these percentages are shown in Figure 8–1. One example of a school system encouraging a healthier meal program is in texas, where fried chicken will
LearnIng OBjeCtIve 3 Explain the need for and trends in elementary and secondary school foodservice.
Percentage of children who eat less than one vegetable serving/day
Ages 6–11
Ages 12–18
32%
26%
Ages 6–11
Percentage of children who eat less than one fruit serving/day
Ages 12–18
56%
74%
Figure 8–1 • Numbers of Servings of Fruit and Vegetables That Children Eat. (Source: National Center Institute.)
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no longer be a lunchtime staple and deep-fat frying is being eliminated. Instead, all potatoes, including french fries, must be oven baked, and no food item can exceed 28 grams of fat. Fruits and vegetables, preferably fresh, must be offered every day for lunch and breakfast. Sodas will not be offered during the school day in middle school. the aim is to provide a healthy envi- ronment in which children can grow.10
the preparation and service of school foodservice meals varies. Some schools have on-site kitchens where the food is prepared and dining rooms where the food is served. Many large school districts operate a central com- missary that prepares the meals and then distributes them among the schools in that district. a third option is for schools to purchase ready-to-serve meals that require only assembly at the school.
Schools may decide to participate in the National School Lunch Pro- gram (NSLP) or operate on their own. In reality, most schools have little choice because participating in the program means that federal funding is provided in the amount of approximately $2.72 per meal per student. Con- tract companies such as araMarK and Sodexo are introducing more flex- ibility in choices for students.
Meeting dietary guidelines is also an important issue. Much work has gone into establishing the nutritional requirements for children. It is difficult to achieve a balance between healthy food and costs, taking children’s eat- ing habits into account. Under the nSLp regulations, students must eat from what is commonly known as the type a menu. all the items in the type a menu must be offered to all children at every meal. the children have to select a minimum of three of the five meal components for the school to qualify for funding. however, U.S. Department of agriculture (USDa) regula- tions have established limits on the amount of fat and saturated fat that can be offered: Fat should not exceed 30 percent of calories per week, and satu- rated fat was cut down to 10 percent of calories per week.
the government-funded nSLp, which pays in excess of $11.6 billion per year11 for the meals given or sold at a discount to schoolchildren, is a huge potential market for fast-food chains. Chains are extremely eager to
penetrate into the elementary and secondary school markets, even if it means a decrease in revenues. however, they believe that it is to their benefit to introduce pizza hut to young people very early— in other words, the aim is to build brand loyalty. For example, in Du- luth, Minnesota, james Bruner, foodservice director for the city schools, was forced into offering branded pizza in several junior high and high schools. the local principals, hungry for new reve- nue, began offering Little Caesar’s in direct competition to the cafete- ria’s frozen pizzas.
Getting kids to eat proper food is a challenge.
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taco Bell is in nearly 3,000 schools, pizza hut is in 4,500, and Subway is in 650. Domino’s, McDonald’s, arby’s, and others are well established in the market as well. Despite the positives, although it is not hard to convince the children, chains need to convince the adults. Much debate has arisen as to whether chains should enter the schools. Many parents feel that the school environment should provide a standard example of what sound nutrition should be, and they believe that with fast food as an option, that will not be the case.
at a school lunch challenge at the american Culinary Federation (aCF) conference, chefs from around the country developed nutritious menus geared to wean children away from junk food to healthy foods. an 80-cent limit on the cost of raw ingredients was placed on the 11 finalists. Innova- tion and taste, as well as healthfulness, were the main criteria used to evalu- ate the winning entry: turkey taco salad, sausage pizza bagel, and stuffed potatoes.
nutrition education Programs Nutrition education programs are now a required part of the nation’s school lunch program. as a result of this program, children are learning to improve their eating habits, which, it is hoped, will continue for the rest of their lives. to support the program, nutritional education materials are used to decorate the dining room halls and tables. perhaps the best example of this is the food guide called Myplate developed by the Food and nutrition Service of the USDa. Figure 8–2 shows the Myplate food guide, which illus- trates what to eat each day to follow a healthy diet.
Figure 8–2 • The MyPlate icon featuring the five food groups.
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Many schools are now developing unique ways to expose children to nutrition and proper eating guidelines. planting a garden has sparked the interest of 1,500 elementary school students at veterans park academy in Florida where students were involved with the planting of a vegetable garden as a result of a $10,000 grant. Students have increased their veg- etable consumption as a result of their involvement with the program and have learned firsthand the value of good nutrition by participating in after- school cooking classes to learn how to prepare the vegetables they helped grow.12
Colleges and Universities College and university foodservice operations are complex and diverse. among the various constituents of foodservice management are residence halls, sports concessions, conferences, cafeterias/student unions, faculty clubs, convenience stores, administrative catering, and outside catering.
On-campus dining is a challenge for foodservice managers because, as you well know, the clients live on campus and eat most of their meals at the campus dining facility. If the manager or contractor is not creative, students, staff, and faculty will quickly become bored with the sameness of the surroundings and menu offerings. Most campus dining is cafeteria style, offering cyclical menus that rotate every 10 or 14 days.
however, a college foodservice manager does have some advantages when compared with a restaurant manager. Budgeting is made easier because the on-campus students have already paid for their meals and their numbers are easy to forecast. When the payment is guaranteed and the guest count is predictable, planning and organizing staffing levels and food quantities are relatively easy and should ensure a reasonable profit margin. For instance, the daily rate is the amount of money required per day from
each person to pay for the foodser- vice. thus, if foodservice expenses for one semester of 98 days amount to $650,000 for an operation with 1,000 students eating, the daily rate is calculated as follows:
$650,000 , 98 days 1,000 students
= $6.63
College foodservice operations now offer a variety of meal plans for students. Under the old board p l a n , w h e n s t u d e n t s p a i d o n e f e e f o r a l l m e a l s e a c h d a y — whether they ate them or not—the foodservice operator literally made a profit from the students who did
LearnIng OBjeCtIve 4 Describe the complexities in college and university foodservice.
College foodservice.
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i n t r O d u c i n g H a d Y n H a Y W a r d
Operations Director for Dining Services
Hadyn began his career at a small university in North Carolina in 2004 as a shift manager. He quickly moved up to become the location manager of that operation and then became the location manager of the largest dining hall on campus. In 2007, Hadyn transferred to a larger Connecticut university as the assistant food service direc- tor, managing many locations across the campus. In 2008, Hadyn was again promoted to food service director when he transferred to a state university in Georgia. In 2009, Hadyn was promoted to the operations director, managing all retail operations on campus.
Hadyn’s major responsibilities included planning and managing high-volume, complex, multilocation foodser- vice operations. He planned, directed, and controlled all retail unit foodservice and resources in order to meet operating and financial goals, client objectives, retail brand franchise relations, audits, and customer needs. He analyzed all financial reports for the retail operations, along with all financial measurements to ensure achieve- ment of financial goals. Hadyn also had to ensure compliance with the company’s operation standards in all retail and catering operations. Daily interaction with university clients helped him maintain effective client and customer relations at all levels within the university and its dining services.
There is no such thing as a typical day for Hadyn at USF as he oversees over 10 locations on the campus, in addition to the catering department for the university. Hadyn’s workweek involves meetings with various departments and groups ranging from HR, marketing, finance, clients, catering events, customers, and his management team. In between these tasks, he also attends monthly meetings with students, who voice their opinions and offer suggestions about the services on campus. Hadyn then meets with his operations team to review the student meeting notes along with operational goals, successes, and opportunities.
not actually eat the meals for which they had paid. More typically now, students match their payments to the number of meals eaten: Monday through Friday, breakfast, lunch, dinner; dinner only; and prepaid credit cards that allow a student to use the card at any campus outlet and have the value of the food and beverage items deducted from his or her credit balance.
Leaders of the national associations of College auxiliary Services ( naCaS), which represents 600 member institutes, have noticed that on- campus services and activities are undergoing continuous change.13 the environment has become a critical part of policy and implementation that transcends parochial interests for those that best meet the needs of the institution and, ultimately, its students.
the driving forces of change on campuses are the advent and growth of branded concepts, privatization, campus cards, and computer use. a college foodservice manager today must have greater skills in retail marketing and merchandizing as students are given more discretion in how they may spend their money for food on campus.
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student unions as you know, the college student union offers a variety of managed services that cater to the needs of a diverse student body. among the services offered are cafeteria foodservice, beverage services, branded quick-service restau- rants, and take-out foodservice.
the cafeteria foodservice operation is often the “happening” place in the student union where students meet to socialize as well as to eat and drink. the cafeteria is generally open for breakfast, lunch, and dinner. Depending on the volume of business, the cafeteria may be closed during the nonmeal periods and weekends, and the cafeteria menu may or may not be the same as the residence foodservice facility. Offering a menu with a good price value is crucial to the successful operation of a campus cafeteria.
On campuses at which alcoholic beverage service is permitted, bever- age services mainly focus on some form of a student pub where beer and perhaps wine and spirits may be offered. not to be outdone, the faculty will undoubtedly have a lounge that also offers alcoholic beverages. Other beverages may be served at various outlets such as a food court or conve- nience store. Campus beverage service provides opportunities for foodser- vice operators to enhance profits.
In addition, many college campuses have welcomed branded, quick- service restaurants as a convenient way to satisfy the needs of a community on the go. Such an approach offers a win-win situation for colleges. the experience and brand recognition of chain restaurants such as Chick-fil-a, Moe’s Southwest grill, au Bon pain, Ben & jerry’s, einstein Bros Bagels, Burger King, Smokehouse Bar-B-Q, Starbucks, Beef ‘O’ Brady’s, pizza hut, McDonald’s, Subway, and Wendy’s attract customers; the restaurants pay a fee either to the foodservice management company or the university directly. Obviously, there is a danger that the quick-service restaurant may attract customers that the cafeteria might then lose, but competition tends to be good for all concerned. to create interest, an Iron Chef competition was held at the University of Missouri, where it gave students and chefs the oppor- tunity to come up with innovative menu ideas, while creating a tighter knit campus community.14
take-out foodservice is another convenience for the campus community. at times, students—and staff—do not want to prepare meals and are thank- ful for the opportunity to take meals with them. and it is not just during examination time that students, friends, and staff have a need for the take- out option. For example, tailgate parties prior to football and basketball games or concerts and other recreational/sporting events allow entrepre- neurial foodservice operators to increase revenue and profits. the type of contract that a managed services operator signs varies depending on the size of the account. If the account is small, a fee generally is charged. With larger accounts, operators contract for a set percentage (usually about 5 percent) or a combination of a percentage and a bonus split. Figure 8–3 shows a typical college menu for the dining hall where students usually eat on campus.
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Monday Tuesday Wednesday Thursday Friday
Breakfast- Cold Cereal, Fruit and Yogurt Bar, Toast, English Mu�ns, Belgium Wa�es, Juices, Milks, Co�ee, Tea, Hot Chocolate, Whole Fruit
Entrees French Toast Chocolate Chip Buttermilk Pancakes Bacon, Egg & Cheese English Mu�n Southwestern Egg Wrap Made to Order Omelets Egg, Ham & Cheese Bagel Breakfast Taco Made to Order Omelets French Toast Blueberry Buttermilk Pancakes Scrambled Eggs Scrambled Eggs Biscuits & Gravy Scrambled Eggs Cheddar Biscuits Hashbrowns Home Fries O' Brein Potatoes Crispy Tater Tots Rosemary Potatoes Turkey Sausage Links Bacon Turkey Sausage Patty Sausage Patty Turkey Bacon
Hot Cereal Old Fashioned Oatmeal Cream of Rice Grits Cream of Wheat Old Fashioned Oatmeal
Bakery Blueberry Mu�ns Apple Cinnamon Scones Peach Almond Crumb Cake Chocolate Chip Scone Iced Cinnamon Roll Assorted Donut Bites Double Chocolate Chip Mu�ns Bananas Foster Mu�n Blueberry Mu�n Banana Nut Mu�n Cherry Cobbler Sweet Bread Buttermilk Biscuits Chocolate Donut Bites Cinnamon-Sugar Donut Caramel Apple Sweet Bread
Lunch- Salad Bar, Specialty Pizzas, Cereal, Build-Your-Own Sandwich Bar, Fresh Fruit
Entrees Bistro Chicken Sandwich French Fries Celery Sticks
Grilled Lemon Chicken Basmati Rice Carrots
Roast Beef French Dip Au Jus Steakhouse Potatoes
Shrimp Pad Thai Steamed Broccoli
Grilled Ham & Cheese Sandwich French Fries Carrot Sticks
Char Sui Pork White Rice Orange Spiced Carrots
Ham & Swiss Panini Pasta Salad Homemade Chips
Chicken, Broccoli & Mushroom Stir-Fry Jasmine Rice
Country-Style Meatloaf Mashed Potatoes with Gravy Glazed Carrots
BBQ Grilled Turkey Baked Sweet Potatoes Grilled Zucchini & Squash Medley
Bruschetta Calzones Garlic Toast
Cheesy Lasagna Garlic Breadsticks
Pepperoni Melt Mini Italian Sandwich
Meat Lover's Mini Calzone Farfalle & Sausage Alfredo Bake
Meatball Stromboli Cheesy Toast
Vegetarian Feature Vegetable Enchilada Moroccan Vegetable Stew Quinoa & Red Pepper Slider Grilled Veggie & Black Bean Wrap Blackened Tofu Taco Salad
Soup Cheddar Cauliflower Chicken & Rice Florentine Beef Mushroom Barley Split Pea Broccoli Cheddar Chicken Noodle Hearty Vegetable Curried Tomato Lentil Two Bean Chili Minestrone
Dessert Chocolate Chip Cookies Banana Pudding Parfait Duce de Leche Brownies Spiced Pumpkin Blondies Oreo Brownie Pudding Parfait Peanut Butter & Devil's Food Parfait Double Chocolate Brownie Strawberry Jell-O Parfaits Peanut Butter Swirl Brownies Rice Krispy Treats Vegan Oatmeal Cookies Peanut Butter Cookies M&M Cookies Sugar Cookies Double Chocolate Chip Cookies
Dinner- Salad Bar, Specialty Pizzas, Cereal, Build-Your-Own Sandwich Bar, Fresh Fruit
Entrees Chicken Fresca Quesadilla Brown Rice Black Beans
Beef Teriyaki Lo Mein Noodles Ginger Honey Glazed Carrots
Crispy Fried Chicken Baked Macaroni & Cheese Fresh Collard Greens
Roasted Turkey Homemade Stu�ng Sweet Cornbread
Top Your Own Burger French Fries Corn on the Cob
Roast Beef Garlic Mashed Potatoes Sautéed Sugar Snap Peas
Stu�ed Pork Chops Baked Potato Wedges Seasonal Mixed Vegetables
BBQ Beef Brisket Scalloped Potatoes Au Gratin Steamed Green Beans
Spaghetti and Meatballs Garlic Breadsticks Fresh Steamed Broccoli
Rotisserie Lemon-Garlic Chicken Whipped Cheddar Mashed Potatoes Roasted Carrots
Grilled Basa Bruschetta Oven Roasted Sea Salt Potatoes Steamed Broccoli
Crispy Asiago-Crusted Chicken Rice Pilaf Grilled Asparagus
Blackened Fish Sandwich Hand Cut French Fries Creamy Coleslaw
Slow Roasted BBQ Ribs Savory Baked Beans Sautéed Brussel Sprouts
Crispy Tilapia with Tropical Salsa Cilantro-Lime Rice Steamed Green Peas
Vegetarian Feature Grilled Portobello Sandwich Tofu Fajita Eggplant Parmesan BBQ Tofu Sliders Vegetable Quesadilla
Soup Cheddar Cauliflower Chicken & Rice Florentine Beef Mushroom Barley Split Pea Broccoli Cheddar Chicken Noodle Hearty Vegetable Curried Tomato Lentil Two Bean Chili Minestrone
Dessert Caramel Pecan Cupcake Blueberry Crumb Cupcake Banana Chocolate Chip Cupcake Red Velvet Cream Cheese Cupcake Vanilla Sprinkle Cupcakes Strawberry Shortcake Parfait Ginger-Spiced Rice Pudding Oreo Pudding Parfait Peanut Butter Pie Banana Pudding Parfait Sugar Cookies Double Chocolate Chunk Cookies Vegan Oatmeal Cookies Chocolate Chip Cookies M&M Cookies
Week 1
Figure 8–3 • Sample College Menu. (Courtesy: Sodexo Foodservice Management.)
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360 Part ii Beverages, restaurants, and Managed Services
as with all types of contract services, there are advantages and disadvan- tages. here are both from a client’s (i.e., your college’s) perspective:
Advantages Disadvantages
experience in size and types of foodservice operations
Use contracted department as a model for rest of institution
potential for lost contracts, meaning foodservice contracts are generally for a period of five years, after which bids are requested for another contract. thus, the operator must maintain the service and pricing that please the client (the college/ university).
variety of services
resource and support available
hold contractor to a higher level of performance
Managing Managed Services15
Operating a large $24 million university campus foodservice operation with 32 managers and 680 hourly employees is exhilarating. each university or college campus is somewhat different, so an operator is smart to become a part of the living and learning campus community and align with the university’s goals. also important is to seek input into many of the decisions made so that there is more of a buy-in by the campus community.
each year, strategic planning and marketing sessions are held with each of the key operating divisions: residential, retail, concessions, and catering; then, financial budgets are completed by month and week for every opera- tion and category. these figures are also updated monthly throughout the year.
the managed services operating ratios vary according to the type of operation, for example, labor costs, which range from the low teens to 50 percent. For residential and retail, labor costs are high and food costs are low, whereas for concessions, labor costs are low and food costs are high. Overall, a well-run operation makes a net profit of between 5 and 15 percent.
Communications are a vital part of a successful foodservice operation. Because there is so much going on, each director and manager has regular meetings to ensure everyone is on the same page. Many day-to-day operat- ing decisions are made by supervisors, who, along with management, all use Outlook and newsletters to communicate electronically.
Foodservice directors spend about 75 percent of their time by follow- ing up and making sure that things are still happening the way they are intended to. the fact that foodservice directors need to spend so much time
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controlling underlines the importance of making good hires and setting clear and concise standards.
a foodservice manager’s responsibilities in a small or mid-size opera- tion are frequently more extensive than those of managers of the larger operations. this is because larger units have more people to whom certain functions can be delegated, such as human resources. For example, fol- lowing are some of the responsibilities that the foodservice manager in a small or mid-size operation might have in addition to strictly foodservice responsibilities:
c O r P O r a t e P r O F i L e
araMarK
In the 1950s, Dave Davidson and Bill Fishman, both in the vending business, realized that they shared the same dreams and hopes of turning vending into a service and combining it with foodservice. And this they did— ARAMARK is the world’s leading provider of quality managed services. It operates with 270,000 employees in all 50 states and in 22 foreign countries,16 offering a very diversified and broad range of services to businesses of all sizes and to thousands of universities, hospitals, and municipal, state, and federal government facilities. Each day, they serve millions of people at more than 500,000 locations worldwide. ARAMARK’s emphasis on the quality of service management was evident from the very beginning of its operations. ARAMARK entered new markets by researching the best-managed local companies, acquiring them, and persuading key managers to stay with the company.
ARAMARK says that customer service is at the center of what they do. And that they are always looking for new ways to ensure they are offering the best possible products and services to meet the needs of customers and clients. ARAMARK serves more than 2,000,000,000 meals a year and responsibly sources ingredients, part- ners with popular local flavors and celebrity chefs, and dynamically transforms dining spaces and creates fresh dishes that are inspired by the tastes of their guests. ARAMARK offers guests:17
• Creative menus and recipes influenced by customer insights • Culinary experts that build remarkable dining experiences • Experienced Service Stars committed to going above and beyond every day • Environmentally friendly policies that support sustainability • An industry-leading health and wellness platform to promote healthy living
ARAMARK has created an Innovation Center for corporate research, design, and product development resources. One interesting outcome is the design of a cool place for students to eat—it has a unique design with students in mind, different from the days of the old gym dining.
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362 Part ii Beverages, restaurants, and Managed Services
Employee Relations
• team development
• rewards/recognition
• Drug alcohol abuse/prevention
• positive work environment
• Coaching/facilitating versus directing
Human Resource Management
• recruitment/training/evaluating
• Wage/salary administration
• Benefits administration
• Compliance with federal/state laws/eeOC (equal employment Opportunity)/Senate Bill 198
• harassment/OSha (Occupational Safety and health administration)
• Disciplinary actions/terminations
• Unemployment/wrongful disclosure
Financial/Budgeting
• project budgets
• actual versus projected budget monitoring (weekly)
• Controlling food cost, labor, expenses, and so on
• record-keeping requirements/audit
• Monitoring accounts payable/receivable
• Billing/collecting
• Compliance with contracts
• Cash procedures/banking
Safety Administration
• equipment training/orientation
• Controlling workers’ compensation
• Monthly inspections/audits (federal/state/OSha requirements/Senate Bill 198)
Safety Budget
• Work on the expensive injuries
• reduce lost time frequency rate and injury frequency rate
Food Production/Service
• Menu/recipe development
• Menu mix versus competition
• Food waste/leftovers utilization
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chapter 8 Managed Services 363
• production records
• production control
• presentation/merchandising
Sanitation/Foodborne Illness Prevention
• Foodborne illness (FBI) prevention
• Sanitation/cleaning schedule
• proper food handling/storage
• Daily prevention/monitoring
• Monthly inspection
• health department compliance
Purchasing/Recruiting
• Ordering/receiving/storage
• Food and beverage specifications/quality
• Inventory control
• vendor relation/problems
Staff Training/Development
• On-the-job versus structured
• Safety/sanitation/food handling and so on
• Food preparation/presentation
• guest service
Figure 8–4 shows an organization chart for a large university foodservice operation.
Sustainable Managed Services hospital foodservice directors often say that offering healthy choices in their cafeterias is a key department mission. But many operators are quick to add that they still offer the so-called unhealthy options to prevent a drop in participation and revenues. however, raquel Frazier, former food- service director at La rabida Children’s hospital in Chicago, did not have that luxury. She was mandated by the hospital’s administration to make the cafeteria 100 percent healthy.18 to meet new nutritional guidelines, food items could not exceed 450 calories, with 10 grams of fat or three grams of saturated fat, and had to contain at least three grams of fiber. In addition, nutritional information for all items had to be posted on the menu and at the point of service. the outcome was that most employees reported losing weight and keeping it off and leading a healthier lifestyle.19
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364 Part ii Beverages, restaurants, and Managed Services
President / District Manager
Retail Operations Director Residential Operations Manager
O�ce Support Marketing Manager Assistant Marketing Manager Human Resources Controller Assistant Controller
Student Center Food
Service Director (8 OPS)
Catering Food Service
Director (2 OPS)
Satellite Food Service
Director (7 OPS)
Concessions Manager
Residential Food Service Director (4 Dining Halls)
Location Manager for
each location
Sales Manager
Operations Manager
Executive Chef
Assistant Location Manager
Production Manager
Location Manager for
each location Nutritionist
Location Manager
Figure 8–4 • An Organization Chart for a Large University.
For a student majoring in hotel and restaurant management, being a general manager, president, or even chief executive officer in the food industry is a goal to be achieved. For Regynald G. Washington, it has been not only a goal reached but a dream realized. His bright smile spells success. As a child growing up in a middle- income family in the town of Marathon in the Florida Keys, working was mandatory. At the early age of 13, he was intro- duced to the food industry. His first job consisted of waiting on and busing tables and doing other chores in the Indies Inn Yacht Club. He took this on as an exciting and new challenge.
i n t r O d u c i n g r e g Y n a L d g . W a s H i n g t O n
Chief executive Officer of hojeij Branded Foods Former vice president and general Manager for Disney regional entertainment and vice president of new Business Initiatives for Walk Disney parks and resorts
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For Regynald, attitude is everything. His positive attitude toward being the best that he can be was derived from a phrase his parents used to repeat to him: “A chip on your shoulder earns a lack of respect from col- leagues, friends, and family.” His great energy and pride in his work is what makes him stand out among many other leaders in the food industry. He has a quality- and people-oriented mind that keeps him focused on any task he wishes to accomplish.
Regynald graduated from Florida International University with a degree in hotel and restaurant administra- tion. He continued to work for Indies Inn, but by this time he was running the food and beverage operation. This was the beginning of the long career road for Regynald G. Washington.
In the years that followed, Regynald worked as a restaurant general manager and at Concessions Interna- tional, an airport food and beverage, duty free, gifts, and magazine organization in Atlanta. He was promoted to executive vice president in 1990. He then formed Washington Enterprises and developed Sylvia’s Restaurant in Atlanta, which turned out to be very successful.
A few years later, though, a major entertainment company executive recruiter offered Washington an oppor- tunity to join the new and creative food and beverage approach that the company was aiming to develop.
Regynald’s secret to managing 2,500 employees and satisfying Epcot’s customers was simply organization and care—having organization and direction in your work eliminates stress and makes time for fun. He used a back-to-basics formula that required everything go well, from making guests happy to proper staffing. Regyn- ald’s ambition and energy helped him climb to the top and have translated into concern for others. He is very well focused on quality and precision in anything and everything he does. One of his number one concerns at Disney was food safety.
To make sure everything was intact and going well, Regynald and his support team performed unannounced inspections every quarter at a specific food and beverage facility. The facility was fully evaluated for its table turns, guest service, food quality, and training programs. Specialists acted as the guests and observed and reported anything that seemed less than perfect. Epcot executive chefs checked the kitchen food as well as the menu. In-house sanitarians evaluated the level of sanitation at the facility. The goal of these inspections was to make sure everything was perfect.
Regynald is a frequent guest lecturer in educational forums and has served on the advisory boards of a num- ber of universities for their hospitality management programs. His board service includes being a trustee of the National Restaurant Association Educational Foundation.
Regynald believes that he has achieved a lot and has had many successes during his career. His career is exciting and motivating and he has the opportunity to make a difference in people’s lives every single day. This is what he always wanted and now he has it. He says, “My parents really wanted me to become a lawyer, physi- cian, or architect. They didn’t believe you could reach the top and do exciting things in the restaurant industry.”
Source: This profile draws on Whit Smyth, “Regynald Washington, EPCOT’s Chief of Food and Beverage, Says Pleasing Customers Is No Mickey Mouse,” Nation’s Restaurant News 33 (January 25, 1999): 28–30; personal correspondence with Regynald Washington, April 6, 2005.
a number of support staff positions offer career opportunities not only within managed services but also in all facets of hospitality operations and arrangements. they include sales, marketing, controller/audit, financial analysis, human resources, training and development, affirmative action/ eeOC compliance, safety administration, procurement/distribution, technical services (recipes, menus, product testing), labor relations, and legal aspects.
a sample operating statement is shown in Figure 8–5. It shows a monthly statement for a college foodservice operation.
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366 Part ii Beverages, restaurants, and Managed Services
▶ check Your Knowledge
1. In your own words, define in-flight foodservice.
2. What are some of the challenges faced by in-flight foodservice opera- tors? What can be done to solve these problems?
3. name the foodservice operations that constitute managed services.
4. how is each foodservice operation characterized?
5. In small groups, discuss the differences between the foodservice opera- tions and then share with the class.
SALES FOOD REGULAR FOOD SPECIAL FUNCTIONS PIZZA HUT EXPRESS BANQUET & CATERING CONFERENCE BEER SNACK BAR A LA CARTE CAFE ** TOTAL SALES
PRODUCT COST BAKED GOODS BEVERAGE MILK & ICE CREAM GROCERIES FROZEN FOOD MEAT, SEAFOOD, EGGS, & CHEESE PRODUCE MISCELLANEOUS COLD DRINK ** TOTAL PRODUCT COST
LABOR COST WAGES LABOR—OTHER EMPLOYEES BENEFITS + PAYROLL TAXES MANAGEMENT BENEFITS WAGE ACCRUALS ** TOTAL LABOR COST
951,178 40,000
200,000 160,000
60,000 1,411,178
9,420 10,000 11,982
131,000 76,045
129,017 65,500
0 432,964
581,000 101,500 124,794 58,320
0 865,614
$
$
$ $ $
$
$ $ $
$
$
$
$
$
$
$ $ $
$ $ $
$ $ $
100,000
80,000 300,000
480,000
4,700 8,000 2,819
49,420 37,221 48,000 26,000
0 176,160
154,000 545,000 50,657 6,000
265,157
100.0%
36.7%
55.2%
951,178 40,000
100,000 200,000 160,000 80,000 30,000 60,000
1,891,178
14,120 18,000 14,801
180,420 113,266 177,017 91,500
0 0
609,124
735,000 156,000 175,451 64,320
0 1,130,771
100.0%
32.2%
59.8%
% STUDENT UNION
% TOTAL %DESCRIPTION
FOOD OPERATING COST— CONTROLLABLE CLEANING SUPPLIES PAPER SUPPLIES EQUIPMENT RENTAL GUEST SUPPLIES PROMOTIONS SMALL EQUIPMENT BUSINESS DUES & MEMBERSHIP VEHICLE EXPENSE TELEPHONE
24,000 9,000
4,500 35,000
3,000 3,600
17,000
6,000 46,000
2,500 5,000
700 5,000
30,000 55,000
0 7,000
40,000 0
3,000 4,300
22,000
Figure 8–5 • An Operating Statement.
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chapter 8 Managed Services 367
health Care Facilities health care managed services operations are remarkably complex because of the necessity of meeting the diverse needs of a delicate clientele. health care managed services are provided to hospital patients, long-term care and assisted living residents, visitors, and employees. the service is given by tray, cafeteria, dining room, coffee shop, catering, and vending.
the challenge of health care managed ser vices is to provide many special meal components to patients with very specific dietary requirements. Determining which meals need to go to which patients and ensuring that they reach their destinations involve especially challenging
LearnIng OBjeCtIve 5 Identify characteristics and trends in health care, business and industry, and leisure and recreation foodservices.
* * TOTAL COST OF OPERATIONS
EXCESS OR (DEFICIT)
PARTICIPATION-CONTRACTOR *** NET EXCESS OR (DEFICIT)
STATISTICS
CUSTOMER COUNT
HOURS WORKED AVERAGE FOOD- SALES/CUSTOMER
1,562,495
(151,317)
594,085
(114,085)
123.8%
(23.8)
110.7%
(10.7%)
2,156,580
(265,402)
114.0%
(14.0%)
LAUNDRY & UNIFORMS MAINTENANCE & REPAIRS FLOWERS TRAINING SPECIAL SERVICES MISCELLANEOUS * * TOTAL CONTROLLABLE SUPPLIES
OPERATING COSTS— NONCONTROLLABLE AMORTIZATION & DEPRECIATION INSURANCE MISCELLANEOUS EXPENSE ASSET RETIREMENTS RENT/COMMISSIONS PIZZA HUT ROYALTIES PIZZA HUT — LICENSING MARKETING TAXES, LICENSE & FEES VEHICLE — DEPRECIATION & EXPENSE ADMINISTRATION & SUPERVISION * * TOTAL NONCONTROLLABLE COST
1,200 10,000
18,000
125,300
13,500 55,717 12,400
48,000
5,000
4,000
138,617
200 4,000
3,000
72,400
7,000 14,768
4,100
40,000 7,000
7,000 500
80,368
15.1%
16.7%
8.9%
9.8%
0 1,400
140,000 0
21,000
197,700
20,500 70,485 16,500
0 88,000
7,000
7,000 5,500
4,000
218,985
10.5%
11.6%
% STUDENT UNION
% TOTAL %DESCRIPTION
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
Figure 8–5 • An Operating Statement. (continued)
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368 Part ii Beverages, restaurants, and Managed Services
logistics. In addition to the patients, health care employees need to enjoy a nutritious meal in pleasant surroundings in a limited time (usually 30 minutes). Because employees typically work five days in a row, managers must be creative in the development of menus and meal themes.
t h e m a i n f o c u s o f h o s p i t a l foodservice is the tray line. Once all the requirements for special meals have been prepared by a registered dietitian, the line is set up and menus color coded for the various diets. the line begins with the tray, a mat, cutlery, napkin, salt and pepper, and perhaps a flower. as the tray moves along the line, various menu items are added according to the color code for the particular patient’s
diet. naturally, each tray is double- and triple-checked, first at the end of the tray line and then on the hospital floor. the line generally goes floor by floor at a rate of about five trays a minute; at this rate, a large hospital with 600 beds can be served within a couple of hours. this is time- consuming for the employees because three meals a day represent up to six hours of line time. Clearly, health care foodservice is very labor intensive, with labor accounting for about 55–66 percent of operating dollars. In an effort to keep costs down, many operators have increased the number of help-yourself food stations, buffets, salads, desserts, and topping bars. they also focus on increasing revenues through catering and retail innovations. Operators must also contend with the fact that food costs are not totally covered by Medicare.
hospital foodservice has evolved to the point where the need for new revenue sources has changed the traditional patient and nonpatient meal- service ratios at many institutions. this situation was imposed by the federal government when it narrowed the treatment- reimbursement criteria; originally 66 percent of a typical acute-care facility’s foodservice budget went toward patients’ meals, with the remainder allocated for feeding the employees and visitors. In the past few years, as cash sales have become more important, the 66/33 percent ratio has reversed.
experts agree that because economic pressures will increase foodservice managers will need to use a more high-tech approach, incorporating labor- saving sous-vide and cook-chill methods. this segment of the industry, which currently is dominated by self-operated managed services, will continue to see contract specialists, such as Sodexo, Compass group, and araMarK, increase their market share at the expense of self-operated health care managed services. One reason for this is that the larger contract companies have the economy of scale and a more sophisticated approach to quantity purchasing, menu management, and operating systems that help to reduce food and labor costs. a skilled independent foodservice operator has the
The all-important tray line in health care foodservice.
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Karen Ozawa is a foodservice manager who works for a 300-bed medical center that is accredited by the Joint Commission on Accreditation of Rehabilitation Facilities (CARF). Karen shared her plan for enhancing the food- service operations at her facility.
When hired, Karen was tasked with surveying the current foodservice operations, and, based upon informa- tion and feedback from both employees and patients, she then developed an improved menu for patient in-room meals, as well as employee cafeteria meals. Every day, for two weeks, as foodservice manager, Karen walked through both the foodservice kitchen and the employee cafeteria, making mental notes of areas for improve- ment. She noted that the kitchen was usually clean and appeared to be well maintained, with each kitchen attendant partaking in some job responsibility. The layout of the kitchen was conveniently planned for mass production and distribution of food items.
At the heart of the kitchen’s foodservice operation was a long meandering assembly line for preparing food trays for the hospital patients. The trays were assembled in a swift manner; however, the presentation of the food items was messy during peak meal times. The meat and side items were placed onto the plates with less care about appearance than about speed. The plates were then topped with hot-lids for heat insulation, but were not checked to ensure they were the appropriate temperature for serving.
Next, upon surveying the employee cafeteria area, Karen determined that although there were a wide variety of food items that were fairly priced, the quality of food items was inconsistent in appearance and taste. Further, she noted that the condiment station in the middle of the cafeteria seating area was infested with small fruit flies. At no time did she see a cafeteria attendant cleaning the condiment station or taking the proper steps to rid the station of these pests.
Karen’s next step was to conduct separate focus groups with patients and employees in order to determine their opinion of the foodservice operation. Both patients and employees were asked, “What do you think about the quality of food in terms of variety, taste, and appearance?” The focus groups with patients revealed that the appearance and taste of the food was inconsistent and unsatisfactory and that the temperature of food was often delivered to patients at an inappropriate temperature. Furthermore, the focus groups with employees revealed that the cafeteria area needed to be cleaned more often. Finally, the employees expressed their prefer- ence for a smaller selection of better-quality food rather than a wide variety of lower-quality food items.
Karen determined that the best solution was to slightly increase the number of staff during peak hours for manning the assembly line to ensure that the cafeteria was always clean and the patients’ food trays were well- presented. Including a simple herb garnish on each plate was implemented to further enhance the appearance. In the cafeteria, the number of food items was condensed, and the price of food items was increased moderately. Finally, the cafeteria was staffed with an extra person to clean up during lunch hours. Ultimately, the increase in cafeteria food items would offset the increase in staffing for the cafeteria and kitchen areas.
H O W t O P L a n F O r t H e i m P r O v e m e n t O F H e a L t H c a r e m a n a g e d s e r v i c e s
Courtesy of James McManemon, M.S., University of South Florida Sarasota–Manatee
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370 Part ii Beverages, restaurants, and Managed Services
Courtesy of allie hire
Understanding your guests in the hospitality industry, where they are from, and what they seek in terms of value and quality is strategic to maximizing profits. Success or failure can often depend upon how much data a com- pany can collect, or mine, and translate that data into useful information for marketing, retention, and overall guest experience improvements. Data mining is a traditional approach in the hospitality industry, and it has proven successful in formulating hotel and restaurant customers.
More common than ever, businesses are using technology to support managed services. Managed services are the methods of outsourcing day-to-day managerial functions in efforts to improve operations and maximize profitability. Examples of outsourcing include human resource activities, employee training and improvements, and production support. The person that organizes and provides the managed service is referred to as the service provider, or MSP. The MSP is a third party and works 24/7 for the customer or client in need of the services. The MSP assumes a re- sponsibility for constant monitoring, problem resolution, or managing of the IT (information technology) systems in an organization. The difference between an MSP and IT services is the delivery of their service and the information that is constantly monitored and provided to the client.
The MSPAlliance mission was established in 2000, with the goal of helping MSPs become better. The MSPAll- iance mission states that characteristics of MSPs include the following:
• Include some form of Network Operation Center • Have some form of service or help desk service • Be able to remotely monitor and manage all or a majority of the IT objects for the customer • Proactively, compared to reactively, maintain the IT objects under management for the customer • Delivering these solutions with some form of predictable billing model, where the customer knows with
great accuracy what their regular IT management expense will be
Statistics show that by the end of 2014, businesses in the United States will have spent over $13 billion on cloud computing and managed IT services, and the global market for cloud equipment is predicted to reach $79.1 billion by 2018.20 The spending on this technology may seem high, but considering how dependent we’ve become on technology, especially in businesses, the spending is justified. But just how much money does a com- pany save when using technology in managed services?
A Computing Technology Industry Association poll of 400 IT and business professionals in 2011 found that 46 percent of organizations that rely on MSPs for some or all of their IT needs say they have reduced annual IT budgets by at least 25 percent as a result of adopting managed services.21 In the total poll, it was determined that 96 percent of all organizations that participated stated that managed services saved them money. The evidence shows that managed services makes sense, both monetarily and from a managerial standpoint.
Managed services is prominent in the hospitality industry, and particularly so in foodservice in airlines, elementary and secondary schools, colleges and universities, and health care facilities. ARAMARK is one of the largest companies that serve this industry. ARAMARK provides services to more than 1,400 colleges, universi- ties, school systems and districts, and private schools. They also provide services to more than 2,000 health care facilities, collectively representing over 75 million patient days annually.22 The team at ARAMARK creates dining solutions for almost any industry in need, with options that are both high quality and profitable.
t e c H n O L O g Y s P O t L i g H t
Data Mining
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advantage of being able to introduce changes immediately without having to support layers of regional and corporate employees.
another trend in health care managed services is the arrival of the major quick-service chains. McDonald’s, pizza hut express, Burger King, and Dunkin’ Donuts are just a few of the large companies that have joined forces with the contract managed services operators. Using branded quick-service leaders is a win-win situation for both the contract foodservice operator and the quick-service chain.
the chains benefit from long-term leases at very attractive rates com- pared with a restaurant site. Chains assess the staff size and patient and visi- tor count to determine the size of unit to install. thus far, they have found that weekday lunches and dinners are good, but the numbers on weekends are disappointing.
In contrast, several hospitals are entering the pizza-delivery business: they hook up phone and fax ordering lines, and they hire part-time employ- ees to deliver pizzas made on the premises. this ties in with the increasing emphasis on customer service. patients’ meals now feature comfort foods, based on the concept that the simpler the food is, the better—hence, the resurgence of meat loaf, pot pies, meat and potatoes, and tuna salad, which contributes to customer satisfaction and makes patients feel at home and comfortable.
In 2014, ARAMARK announced they would pilot acceptance of mobile payments from Apple Pay at certain hockey arenas during the 2015 season. ARAMARK’s goal is to innovate the guest experience with concepts that work for both the client and the consumer. By allowing customers to use these apps to purchase food and bev- erages, they are able to have a secure and convenient way to pay for those items, using their iPhone or Apple Watch. Another innovation was a concept called Burger Studio, a retail dining experience designed for colleges and universities. Digital menu boards and electronic touch-screen ordering stations allowed students to design their own meal, from start to finish.
Sodexo is another leader in the industry of managed services. They serve more than 15 million consumers daily, and they serve 9,000 sites.23 Sodexo manages the food and facilities for over 1,600 hospitals and health care facilities across the United States, and in 2009 expanded their partnership with Skylight Healthcare Sys- tems, the leader in interactive patient care technology. Skylight Healthcare Systems is a pioneer in interactive patient system technology with a focus on patients and families participating in their health care. Their findings show that the more interactive a patient and their families are, the better the communication between staff and those patients, thus creating a more seamless and comfortable hospital stay. A recent example of this joint ven- ture is turning the hospital televisions into interactive patient information stations—a small change that makes a large impact for patients and staff alike.
Managed foodservices aren’t just on land. If you’ve recently travelled on an airline and received a beverage, snack, or meal, you’ve witnessed the managed service of airline foodservice from companies like Gate Gourmet and LSG Sky Chefs. LSG Sky Chefs use retail technology to maximize revenues for airlines. They advertise that their point-of-sale hand-held terminals allow an airline to change prices and offer promotions, accept credit cards, loyalty cards, and coupons. The terminals communicate information that is then useful for marketing, sales predictions, and controlling stock levels.
t e c H n O L O g Y s P O t L i g H t (Continued)
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Some hospitals have adopted a room service menu concept for patients whose diets are not restricted. here patients are often contacted before they arrive at the hospital so that the foodservice professionals may find out the likes and requests of future patients.
Business and Industry (B&I) B&I managed services is one of the most dynamic segments of the man- aged services industry. In recent years, B&I foodservice has improved its image by becoming more colorful, with menus as interesting as commercial restaurants.
the following are important terms to understand in B&I foodservice:
1. Contractors. Contractors are companies that operate foodservice for the client on a contractual basis. Most corporations contract with managed services companies because they are in manufactur- ing or some other service industry. therefore, they engage profes- sional managed services corporations to run their employee dining facilities.
2. Self-operators. Self-operators are companies that operate their own foodservice operations. In some cases, this is done because it is eas- ier to control one’s own operation; for example, it is easier to make changes to comply with special nutritional or other dietary requests.
3. Liaison personnel. Liaison personnel are responsible for translating corporate philosophy to the contractor and for overseeing the contrac- tor to make certain that he or she abides by the terms of the contract.24
Contractors have approximately 80 percent of the B&I market. the remaining 20 percent is self-operated, but the trend is for more foodservice operations to be contracted out. the size of the B&I sector is approximately 30,000 units. to adapt to corporate downsizing and relocations, the B&I seg- ment has offered foodservice in smaller units, rather than huge, full-sized cafeterias. another trend is the necessity for B&I foodservice to break even or, in some cases, make a profit. an interesting twist is the emergence of multitenant buildings, the occupants of which may all use a central facility. however, in today’s turbulent business environment, there is a high vacancy rate in commercial office space. this translates into fewer guests for B&I operators in multitenant office buildings. as a result, some office buildings have leased space to commercial branded restaurants.
B&I managed services operators have responded to requests from corporate employees to offer more than the standard fast-food items of pizza and hamburgers; they want healthier food options offered, such as make-your-own sandwiches, salad bars, fresh fruit stations, and ethnic foods.
Most B&I managed services operators offer a number of types of service. the type of service is determined by the resources available: money, space, time, and expertise. Usually these resources are quite limited, which means that most operations use some form of cafeteria service.
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F O c u s O n m a n a g e d s e r v i c e s
Mega-event Management: the Olympics—going for the gold
Fred J. DeMicco, professor and araMarK Chair, Department of hotel, restaurant and Institutional Management, University of Delaware, and penn State Walter j. Conti professor of hrIM
ARAMARK is a world leader in providing global managed services, including food, facility, and other support services. ARAMARK has leadership positions serving the business, education, health care, sports, entertainment, and recreation management segments. Related to sports, en- tertainment, and food service is “serving the world” at the Olympics.
ARAMARK has a long and rich history with the Olympic Games, dating back to 1968 when it served at the Mexico City Summer Games, the largest in history at the time. Since then, the com- pany has managed services at more Olympic Games than any other company, earning its own
gold medal performance at both the summer and winter games over the past four decades. ARAMARK chefs and nutritionists develop a World Menu with more than 550 recipes designed to meet the
needs of athletes from 200 different countries, with different ethnic and religious backgrounds and varying nu- tritional needs, to help them achieve their best during their Olympic performances.
For the third time, Dr. DeMicco took students to the Olympic Village to work for ARAMARK. In 1996, his students worked for the Summer Games in Atlanta, and they traveled to Sydney to work in the 2000 Summer Games. With 1,500 different menu items available, 24 hours a day, the students had their work cut out for them. Some of the stranger dishes that appeared on athletes’ plates during the 2000 Sydney Olympics included kanga- roo prosciutto, smoked emu, grilled mako shark, and goat vindaloo.
“The exposure to this type of event provides more learning than any other foodservice venture,” Jerome Bill, of ARAMARK, says. “Usually a small city is built, operated for approximately 33 days, and then is taken down just as fast. The logistics are tremendous.”
ARAMARK recruits and trains more than 6,500 persons to prepare and serve more than 5 million meals dur- ing the 33 days the Olympics and Para-Olympics take place. The grocery list for such an event is enormous. Some of the major ingredients that ARAMARK used included 576,000 eggs, 34,000 pounds of rice, 32,800 pounds of margarine, and 9,057 pounds of shredded cheddar cheese.
“Where else can you welcome 15,000 of the best in the world into your home for dinner? It is truly the ul- timate display of blending one’s background, classroom experience, and human nature into an unforgettable learning environment. Students learn more than just serving and cooking; they reach the brink of fully under- standing the true meaning of hospitality,” said Marc Bruno, MBA, ARAMARK.
The students were able to interact with elite athletes in the world in a fast-paced and constantly changing environment. They were able to be part of providing foodservice that met the unique cultural and nutritional needs of athletes from more than 200 countries. They went in every day knowing that their jobs were critical to each athlete’s peak performance.
According to a student participant, “The Olympics allowed me to get an inside view of how a mega event was run, the problems that came up, and how they were overcome. Being in the Olympic Village introduced me to working with people of many different cultures. I am currently working for NBC Olympics in the Games Ser- vices department. I am really looking forward to being part of another Olympic Games.”
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B&I foodservice may be characterized in the following ways:
1. Full-service cafeteria with straight line, scatter, or mobile systems
2. Limited-service cafeterias offering parts of the full-service cafeteria, fast- food service, cart and mobile service, fewer dining rooms, and executive dining rooms
▶ check Your Knowledge
1. What roles other than those strictly related to foodservice does the foodservice manager perform?
2. Briefly explain some of the tasks the foodservice manager performs. What makes each task so important?
managed services Other than Food Many companies such as Sodexo have recognized the potential to increase their market opportunities by developing service capabilities beyond food. this also offers hospitality managers the opportunity to expand their career paths as well. typically, hospitals, colleges, schools, and businesses outsource other service departments the same as they do for food. Companies on the cutting edge are able to offer clients broader packages of services. these services often come under the area of facilities management25 and offer the following services:
• housekeeping/custodial/environment services
• Maintenance and engineering
• grounds and landscaping
• procurement and materials management
• Office and mail services
• Concierge services
• patient transportation services (hospitals)
Many colleges and universities recognize that this is an area for career op- portunities and are developing courses and programs surrounding the area of facilities management. Managers who work in the managed services seg- ment of the industry have the advantage of learning about several disci- plines. In doing so, they increase their career growth potential and can find career paths similar to those available in the lodging segment of the industry.
Leisure and recreation the leisure and recreation26 segment of managed services may be the most unique and the most fun part of the foodservice industry in which to work.
Leisure and recreation foodservice operations include stadiums, arenas, theme parks, national parks, state parks, zoos, aquariums, and other venues
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where food and beverage are provided for large numbers of people. the customers are usually in a hurry, so the big challenge of the foodservice segment is to offer the product in a very short period of time. the average professional sporting event lasts for only two to three hours of time.
What makes this segment unique and fun is the opportunity to be part of a professional sporting event, a rock concert, a circus, or other event in a stadium or arena. there is also the choice of working in a national or state park and being part of the great outdoors. the roar of the crowd and the excitement of the event make this a very stimulating place to work. Imagine getting paid to see the Super Bowl versus paying to see the Super Bowl.
stadium Points of service Leisure and recreation facilities usually have several points of service where food and beverage are provided. In the typical stadium, a vendor yells, “here, get your hot dog here!” to the fans in the stands, while on the con- course other fans get their food and beverage from concession stands. these stands offer everything from branded—meaning well-known brands—foods to hot dogs and hamburgers to local cuisine. For example, in philadelphia the cheesesteak sandwich is popular, whereas in Baltimore, crabcake sand- wiches are favored by fans. another place for people to get food is in a restaurant, which most stadiums have as a special area. In some cases, fans must be members of the restaurant; in other cases, fans can buy special tick- ets that provide them with access to this facility. these restaurants are like any other except that they provide unobstructed views of the playing area.
the other major point of service is the food and beverage offered in the premium seating areas known as superboxes, suites, and skyboxes. these pre- mium seating areas are usually leased by corporations to entertain corporate guests and customers. In each of these areas, branded and gourmet food and beverage service is provided for the guests. these facilities are capable of hold- ing 30–40 guests and usually have an area where the food is set up buffet style and a seating area where the guests can see the sporting or other event. In a large, outdoor stadium, there could be as many as 60 or 70 of these superbox- type facilities. For stadium foodservices, more tickets are being placed on mobile devices to enter the stadium/arena; once in the stadium, there are promotions texted to fans, and gpS locations are used in stadiums for vendor ordering.
In summary, a large stadium or arena could have vendors in the stands, concession outlets, restaurants, and superboxes all going at once and serv- ing upward of 60,000–70,000 fans. Feeding all these people takes tremen- dous planning and organization on the part of the foodservice department. the companies that have many of the contracts for stadiums and arenas are araMarK, Sodexo, Compass group, and Delaware north.
Other Facilities Besides stadiums and arenas, food and beverage service is provided in sev- eral other types of facilities by the same major managed services companies that service stadiums. Most of the U.S. national parks are contracted to these companies. these parks have hotels, restaurants, snack bars, gift shops, and a
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376 Part ii Beverages, restaurants, and Managed Services
myriad of other service outlets where tourists can spend their money. In addi- tion to parks, other venues where food and beverage are offered include zoos, aquariums, tennis tournaments such as the U.S. Open in new York, and pro- fessional golf tournaments. all these events involve big numbers of people. For example, a professional golf event, which lasts a week including practice time, will have upward of 25,000 spectators per day watching the pros play. tournament events are similar to stadium and arena foodservice operations because they also include concession stands, food and beverage areas for the fans, and corporate tents for special catering and company guests.
advantages and disadvantages a foodservice career in this segment has several advantages, which include the unique opportunity to see professional and amateur sporting events to your heart’s delight; to hear the roar of the crowd; to be in rural, scenic ar- eas and enjoy the great outdoors; to provide a diverse set of services for the guests or fans; and to have a set work schedule.
the disadvantages of this segment include very large crowds of people to serve in a short time; a work schedule of weekends, holidays, and nights; the chance to give only impersonal service; less opportunity to be creative with food; seasonal employment; and an on-season/off-season work schedule.
Leisure and recreation foodservice is a very exciting, unique part of the hos- pitality industry that offers employees very different opportunities from standard hotel and restaurant jobs. With the current trend toward building new stadiums and arenas around the country, this segment offers many new career openings.
trends in Managed Services Courtesy of Dr. greg Dunn, Senior Lecturer and Managing Director, UF eric Friedheim tourism Institute
• Increased K-12 Foodservice Managed Services. the trend toward more private foodservice contracting in school foodservice continues as more school districts struggle with funding and resources to provide meal service options that adapt to health and nutrition-driven demand.
• Evolution of College and University Foodservice. Colleges and universities continue to seek and develop innovative, in-demand foodservice concepts to meet changing students’ expectations and desires. Dining halls are being refashioned for the twenty-first century and offering greater depth and variety of cuisines and preparation styles, while new kiosk and mobile foodservice operations provide greater convenience for time-starved students.
• Quality of Life and Social Responsibility. Managed services providers such as Sodexho and araMarK are looking to add more value to their clients and consumers by offering expanded services and experiences targeted to improving quality of life at work and in communities through philanthropy, outreach programs, healthy lifestyles, wellness and nutrition, in-home care, concierge services, and grab-and-go options.
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The kitchen at a major corporation’s managed services business account includes several gas and electric stoves, ovens, broilers, steamers, grills, and other appliances. On average, the kitchen serves 500 lunches. At 10:15 a.m. on a Tuesday in December, a gas leak prompts the gas company to cut off the gas supply.
discussion Question 1. What can be done to offer the best possible lunch food and service?
c a s e s t u d Y
gas Leak
Jane is the foodservice director at an on-campus dining service that feeds 800 students per meal for breakfast, lunch, and dinner. Jane arrives at her office at 7:00 a.m. (half an hour before breakfast begins) only to find many problems.
After listening to her phone messages, she finds that her breakfast cashier and one of her two breakfast dishroom employees have called in sick. The cashier position is essential, and the second dishroom person is necessary at 8:15 a.m. when the students leave to go to their 8:30 a.m. classes.
Then, the executive chef tells Jane that one of their two walk-in refrigerators is not work- ing properly, so some of the food is above the safe temperature of 40°F.
The lead salad person later comes to her, saying that one of the three ice machines is not working. Hence, there will not be enough ice to ice down the salad bars and to use for cold beverages at lunch.
Last, the catering supervisor tells Jane that he has just found out that there was a misun- derstanding with the bakery that supplies their upscale desserts. The desserts were requested by the president of the university for a luncheon he is having that day; however, because the employee at the bakery wrote the wrong delivery date, the desserts would not be delivered. This will cause the president to be angry.
discussion Questions 1. How should Jane handle being short a cashier and a dishroom person at breakfast? 2. What should Jane do with the food in the defective refrigerator? Should the food that is
measured to be above 40°F be saved? 3. What are Jane’s options concerning the ice shortage?
c a s e s t u d Y
Chaos in the Kitchen
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378 Part ii Beverages, restaurants, and Managed Services
Summary 1. Managed services operations include
segments such as airlines, military, schools and colleges, health care facilities, and businesses.
2. Food has become scarce on short and medium domestic flights. Most airlines have food prepared by a contractor, such as gate gourmet or LSg Sky Chefs.
3. Service to the military includes feeding troops and officers in clubs, dining halls, and hospitals as well as out in the field. Direct vendor delivery, menu management, prepared foods, and fast-food chains located on the base have met new trends in military foodservice.
4. Schools are either equipped with on-site kitchens and dining rooms or receive food from a central commissary. they try to bal- ance salability with good nutrition. today, nutrition education is a required subject in school.
5. College and university managed services operations include residence halls,
cafeterias, student unions, faculty clubs, convenience stores, and catering.
6. the responsibilities of a foodservice manager are very complex. he or she is in charge of employee relations, human resource management, budgeting, safety administration, sanitation, and inventory.
7. health care managed services operations need to provide numerous special meals to patients with very specific dietary requirements and nutritious meals in a limited time period for employees. the main areas of concern for health care managed services operations are tray lines and help-yourself food stations.
8. Business and industry managed services operations either operate with a full-service cafeteria or limited-service cafeteria. the type of service is determined by money, space, and time available.
9. Leisure and recreation foodservice offers yet more career opportunities. It is often available at several points of service.
4. How should Jane handle the president’s function, knowing that the requested desserts have not been delivered?
5. If the special dessert cannot be purchased in time, how should the catering supervisor approach this situation when speaking with the president’s office?
6. What can be done to ensure that mistakes, such as the one made by the bakery em- ployee, do not happen again?
c a s e s t u d Y (Continued)
Key Words and Concepts
batch cooking commercial foodservice contractors daily rate
liaison personnel managed services national School Lunch program (nSLp)
nutrition education programs self-operators tray line
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Internet exercises
1. Organization: ARAMARK Summary: araMarK is “a global leader in managed services” according to its Web site. araMarK is an outsourcing company that provides services ranging from every- day catering to corporate apparel.
(a) Go to araMarK’s Web site and see what they are doing under the Social responsibility heading. (b) What are some of the characteristics that make a star of the month?
2. Organization: Sodexo Summary: With a presence across 80 coun- tries, Sodexo offers a number of job op- portunities for candidates from different backgrounds.
(a) What are the six dimensions of qual- ity of life that Sodexo focuses on? (b) What are the types of jobs offered by Sodexo that interest you?
review Questions
1. What are managed services operations? 2. List and explain features that distinguish
managed services operations from commer- cial ones.
3. Describe the issues that schools are cur- rently facing concerning school foodservice.
4. explain the advantages and disadvantages of foodservice in the leisure and recreation segment.
5. Identify recent trends in college foodser- vice management.
6. What are the pros and cons concerning fast-food chains on campus?
7. Briefly explain the complex challenges for health care managed services operations.
apply Your Knowledge
1. From the sample operating statement ( Figure 8–5), calculate the labor cost percentage by taking total labor cost and dividing by total sales × 100. remember the formula:
Cost
Sales * 100
2. as the manager of a local family food estab- lishment, you are responsible for creating a meal that includes an entrée, a side dish, and a drink. Describe the meal that you will create and the consumers you will target. Determine the price of the meal, the cost of the ingredients used, and the labor costs, and then calculate the net profit.
Suggested activity
1. Select a school or health care facility in your area that you think serves nutritionally unbalanced meals in its cafeteria. analyze
the meal and spot nutritional gaps. then, create a sample meal that will fill those gaps.
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380 Part ii Beverages, restaurants, and Managed Services
endnotes 1. personal conversation with Susan pillmeier,
araMarK, and john Lee, Sodexo, july 28, 2005. 2. gate gourmet, About Gate Gourmet, www
. gat egourmet.com. Click on about (accessed May 1, 2015).
3. LSg Sky Chefs, Who We Are, http://www.lsgsky chefs .com. Click on Who we are (accessed july 29, 2014).
4. Ibid. 5. this content is based on material from the following
sites: Sodexo, Group profile, http://www .sodexo .com. Click on group (accessed February 29, 2015); Sodexo, About Us, http://www.sodexousa.com. Click on about Us (accessed March 4, 2015).
6. “Channeling the College environment: viewing a Military Installation Like a College Campus Can help Foodservice enhance the retail experience,” Foodservice Director (March 15, 2011):
7. “Cafeteria Boot Camp: Fort Campbell’s hospital Cafeteria Focuses on healthy Dining after renova- tion,” Foodservice Director (March 15, 2011): 8.
8. “Smart Choices,” Foodservice Director (april 15, 2011): 10.
9. United States Department of agriculture, Food and nutrition Service. National School Lunch Program, September 2013, www.fns.usda.gov. go to programs, click on national School Lunch program (nSLp), and then click on program Fact Sheet ( accessed april 28, 2015).
10. Sahra Bahari, “Students can expect healthier Selec- tion,” Fort Worth Star-Telegram, august 12, 2007.
11. United States Department of agriculture, Food and nutrition Service. National School Lunch Program, September 2013, www.fns.usda.gov. go to programs, click on national School Lunch program (nSLp), and then click on program Fact Sheet ( accessed november 24, 2014).
12. “teaching Moments: School’s garden Spurs nutrition program for Students,” Foodservice Director (December 15, 2010): 8.
13. the national association of College & University Food Services, About NACUFS, www.nacufs.org. Click on about naCUFS (accessed april 28, 2015).
14. “Smart Choices,” Foodservice Director (april 15, 2011): 1.
15. Based on an interview with Steve Dobrowolski, retail Operations Director, araMarK, University of South Florida, april 27, 2011.
16. araMarK, About Us, www.aramark.com. Click on about Us (accessed july 29, 2014).
17. araMarK, Food Services, http://www.aramark. com. go to Services and then click on Food Services (accessed May 27, 2015).
18. FSD Staff, “environmental awareness,” Foodservice Director 22(8), august 15, 2009, 58.
19. Ibid. 20. nate teplow, “29 Statistics every MSp needs to
Know,” MSP Blog, april 29, 2014 (8:30 a.m.), http:// blog.continuum.net/29-statistics-every-msp-needs- to-know.
21. pedro pereira, “Do Managed Services really Save Money?,” December 1, 2011, http://www.chan- nelinsider.com. Search for “Do Managed Services really Save Money” to view the article (accessed May 27, 2015).
22. araMarK, Food Services, http://www.aramark. com. go to Services and then click on Food Services (accessed May 27, 2015).
23. Sodexo, About Us, http://www.sodexousa.com. Click on about Us (accessed March 4, 2015).
24. personal correspondence with john Lee, Director of College and external relations, Sodexho, September 13, 2005.
25. Ibid. 26. Courtesy of David tucker.
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