W h at ’s fo r
lunch
Volume #02
November 2012
Hot-button FoodService Dilemma:
Inside this Issue: To Outsource or Not to Outsource pg 1-2
To Outsource or Not to Outsource?
Best Practices: More Choices, More Sales pg 2 Why Are We Still Taking Cash? pg 3 6 Points for Purchasing a POS System and Costly Ones to Avoid. pg 4
In times like these, schools are under immense pressure to first cut costs then squeeze all they can out of every penny. As budgets move from small to smaller, an increasing number of school districts are beginning to consider the possibility of outsourcing their food service needs. While such an idea is sure to cause some angst among food service workers, and rightly so, one cannot escape what outsourcing can mean to a school’s or district’s bottom line. Few outside the food service operation can fully understand the difficulty of balancing government regulations and nutritional worries against marketing and customer service, and food management companies can be seen as a real asset. Even so, before jumping in head first one should first educate themselves on the realities of food service outsourcing and the effects it will have on all involved.
The Outsourcing Options The practice of outsourcing is more prevalent in some states than others. Those that top the list are New Jersey, Michigan and Florida, with statewide school food service outsourcing rates of between 20-70%. While some states encourage their school districts to investigate outsourcing as a means of cutting costs, others take a neutral stance. When it comes to outsourcing food services, the options are as varied as flavors of ice cream. While some schools choose to limit the responsibilities and tasks they outsource, others find it beneficial to hand over everything – from food purchases to payroll. Schools that choose to go this route must first consider the effect it will have on their existing personnel. Contracting with food service providers is not without controversy. The reputations of a schools’ food service department and the welfare of its longtime employees is at stake, with fears that their positions will be terminated in the drive to cut costs. While the pressure placed on school system leaders and their governing boards forces them to examine every budget item for cost savings, they must always remember the effect their decisions will have on their food service staff.
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Continued from page 1
Buying Power Schools and districts may see a benefit in investing in their local economies by purchasing local produce, but when times are tough, credence must be given to cutting costs, and there is a lot of money that can be saved. Put simply, food service management companies are unsurpassed when it comes to purchasing efficiency. They are able to purchase food at quantity levels that dramatically decreases the per unit cost. Spending less on each brick of cheese frees up funding for use in the classroom, putting the focus on what schools do best—educating kids.
Marketing School Lunch Besides offering school districts economies of scale, private-sector companies have at their fingertips marketing resources and products that are out-of-reach of most selfoperated school food service programs. These companies can also offer training and education for food service workers. Contract management companies can tap into a wealth of interesting recipes and the experience of food service experts to revamp cafeteria menu offerings and increase participation. That, in turn, increases revenue for the food program, freeing up additional money that can be spent toward educational needs. When school lunch participation rates increase, schools districts profit in other ways as well. Many schools do not seem to adequately contemplate the correlation between free and reduced-price lunch enrolment and the amount of Title I and E-rate funding they receive. This funding is awarded based on the number of students in the free and reduced-price program, and certain food service contract companies are capable of aiming their marketing efforts toward encouraging eligible families to apply. Most contract management companies have established methods for luring more students to the lunch line. Examples include transforming lunchrooms to resemble mall food courts, providing appealing giveaway items such as Frisbees or MP3 players, and offering special snacks or awards that students or classes can win, such as pizza or fresh fruit parties.
The Human Toll As mentioned previously, reaping the benefits of food service outsourcing often comes at the expense of human capital, and that is a political price some school boards do not want to pay unless they have no other option. It is obvious that employee costs and labor relations are the biggest obstacles when it comes to privatizing food services. When done correctly, outsourcing saves school districts money, and typically the biggest savings come as a result of completely relinquishing control of their food service departments. The reasons being that contract management companies can complete the job with fewer personnel and they can better stem the rising expense of benefits packages.
Other Alternatives Districts with struggling food service programs are not left with contact management companies as their only option.The American School Food Service Association and state school food service associations are available to help evaluate school lunch programs. Help is also available from state departments of education as well as the Associate of School Business Officials. Sometimes schools can dramatically improve their bottom line by developing stronger leadership in their food service departments. Before abandoning self-operated programs, districts they should thoroughly research their options. Requests for proposals from proprietary firms should be specific and detailed, and proffered contracts should be studied carefully. District administrators should check with their state’s department of education to make sure special rules don’t govern such arrangements. It is also a good idea that school boards first ask their district’s current food service department to offer a proposal before making any sort of decision. Keep in mind that if a district decides that contract management is the right move for them, the district administrator still must audit the food service program to ensure the USDA guidelines are being followed and that food quality is maintained. NOTE: This article contains excerpts from “Hot potato in the school cafeteria: more districts outsource their food services, but some raise questions about personnel relations and savings” written by Kate Beem.
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Best Practices:*
More Choices, More Sales
People like to have variety. That includes students. When you go to a restaurant, would you rather be told what you are going to eat or choose from the menu? If students have daily entrée choices, they are more likely to choose a complete meal and to eat school lunch more often. MYTH: We do not have the staff or facilities to offer more menu choices. FACT: You can boost meal sales by offering more menu choices, often without more staff. Know the needs of your district Consider what you need and the extent of your budget. Contact other districts using POS systems to find out what works for them. Start with the basics Start with just some of the program features, such as checking students in at the point of service. You can add other functions later, such as inventory control and Nutrient Standard Menu Planning. Prepare your staff Assure staff that the new POS system will make their jobs easier and their customers happier and that they will have time to learn how to use it. Ask students for ideas Which ethnic foods do they like? Do they want vegetarian meals? What would make lunch more appealing and fun to them? Start small Try adding one simple extra choice, such as yogurt or another cold item. Try a self-serve option Think salad bars. While you may need more staff time, the increase in participation can offset this cost. * This article is a summary of “Feed More Kids for School Lunch Success: Product and Price,” an informative pamphlet provided by the California Department of Education Nutrition Services Division. For more helpful hints on how to improve your food service program, visit their website: http:// www.cde.ca.gov/Is/nu.
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Why Are We Still Taking Cash?
I
n this 21st Century, software applications are not just reserved for large retailers or institutions but available and quite affordable, for every size business; including schools. You can manage student information including household, emergency contacts, medical, grades, attendance even class assignments. So why are so many of our schools overlooking the management of cash on campus? Oh I know we don’t consider schools a business. Cash is for food service to manage or Booster Clubs or Coaches to collect. The Business Office has enough to worry about. When you really think about it, for a school who “doesn’t deal with cash” there’s a lot of cash floating around. A single school can have as many as two dozen groups or individuals managing cash without much accountability.
Cashless campus software allows schools to manage all their dollars with a clear picture of where it came from, when it was paid and where it needs to go. You can track what is earned by Boosters, collected by clubs, raised by fundraisers, sold at lunch, purchased at the student store and paid for online. Add Free or Reduced Software and you ensure you’re receiving all the funds you’re entitled to under the National School Lunch Program. And if you didn’t think your school qualifies, find out. More money found, an efficient use of resources; allow participating students anonymity all that equals a successful use of software. Schools can not only create declining balance accounts for their students to use on campus but provide secure parent portals for purchases, payments, registrations and donations all through the use of
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software. Wouldn’t it be nice for students not to have to carry cash, for every parent to know that the money they give their student to eat lunch actually got spent on lunch, to see what fees are due, order a sweatshirt, purchase a prom bid, register for a golf tournament or sign their student up for summer school and do it all online, on time, even print out a receipt without sending a single check or cash to school with their student? The tools are out there and they’re affordable. In fact, they pay for themselves. I can’t think of a single reason our schools aren’t ALL using cash management software; except one… If there’s a single individual who protests long and hard against a cashless campus environment, I would be concerned. There’s a lot going on in our schools today and it would be inconceivable to think you can completely eliminate cash but you can certainly eliminate 90% of it. It’s difficult to micro-manage every dollar and even more difficult when you find yourself in a situation with an individual, an employee, a parent, or a volunteer. Temptation is powerful even for the strongest individual, errors are likely even for the most detailed and things fall through the cracks when we have so much on our plates. Let’s make sure everyone knows there’s transparency, there’s accountability, and there’s efficiency. Let’s make sure when we’re asked for our books or preparing for an audit, we know where our money is. Remember, the tools are out there, they’re affordable. So why are we still taking cash on campus?
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2. Not a Beauty Contest Pretty screens are nice, but that’s all they are—pretty. Be wary of
6 Points
vendors that only want to talk about how nice the software looks. There should be more substance behind the scenes than just screen shots.
for Purchasing a POS System
POS software vendors can spend their development money on pretty screens or on the fundamental backbone of the system. You want a system that runs day in and day out and not a pretty system that is broken all the time. 3. Don’t be oversold and under-delivered Make sure all of your requirements are met. It’s easy for a vendor to
and costly ones to avoid.
say “YES” to all of your questions. Software is different than a tangible good. If you want a red car with a sunroof and you go to the car lot, you can actually pick out a red car with a sunroof because you can see it and physically touch it. With software, have the company show you how it will do what you want. That way, you actually know it does what it should. You don’t want to install the whole system, only to find out that
The
school cafeteria Point-of-Sale (POS) market is a fast
it doesn’t do what you thought it would.
growing area of software development as all schools have a need for electronic record keeping and elimi-
4. Know your business processes and procedures beforehand
nation of manual processes. This has attracted more and more POS
What are you trying to accomplish with your new POS system? Is it
companies to develop solutions for school cafeterias. With budgets
an increase in accountability, increase in lunch line speed, decrease in
getting cut and cafeteria programs struggling to turn a profit, schools
cash handling/reconciliation, more reimbursements from an increase
are turning to cashless or near-cashless systems that allow parents to
in free and reduced numbers? If you know the problems you are trying
prepay onto an account and simply have their students deduct money
to solve, you will be more prepared during your search. Be prepared to
from their account.
make decisions on your current processes – Is this the most efficient way to do this? Can we change a little to gain a lot?
With so many POS offerings, schools find the task of selecting the right vendor rather daunting. The problem is trying to select the right ven-
5. Stay away from “cheap”
dor as all of the companies make similar claims as to what they can do.
Nothing good ever comes out of “cheap”. What looks like a good deal
Notwithstanding, just because these solutions sound alike, don’t fall
on paper, ultimately leads to problems down the road. A reliable
into the trap that they are all alike. Now is the time that schools need to
product from a trusted vendor who can provide you a solution to your
ask hard questions to the vendors to identify ones that cannot provide
problems, streamline accounting, decrease cash handling, increase
the level of service that they require.
federal reimbursements and funding, enable backend integration to your student information system and provide support when you need it
One way to evaluate a POS company is talk to references. They are
isn’t free and doesn’t come cheap. Selecting the right vendor is impera-
industry peers that will provide an unbiased opinion on the vendor,
tive, as the last thing you want to do is purchase another system a year
application and ultimately their level of customer support. In addition,
later because the cheap one you bought doesn’t work. Remember – if it
please reference the following guide, “6 Points of Purchasing a POS
doesn’t work, it doesn’t matter.
System (and costly ones to avoid)”. 6. Watch out for “thin client – hosted solutions” 1. Proven Track Record
The movement and trend in the market is to move to ASP (Application
Find a company that has at least 10 years experience providing POS
Service Provider) or SaaS (Software as a Service) models where the
solutions. There are many variables, but an established company with a
POS company will host your data on a web server and you just access
good customer base should be a better choice and a safer bet than one
your system with a website. This is a great model for some industries
who is new to the market. This would also be the time to call refer-
but not for school POS environments. You need to make sure that your
ences. Ask the vendor for a list of customers that they could speak to
POS system has offline capabilities and can run independent of the
in regards to your company as a whole. Local references are great, but
server, just in case the internet, network or server goes down. Students
they are not the end-all, be-all. Ask hard questions about customer
will eat lunch and come through your line whether or not your internet
service – when everything runs fine, it’s great. It’s when you have a
connection is up. You need to be able to run your POS, even if the
problem, will you be taken care of, or, will you be dumped into phone
server is unavailable and then sync your transactions once the connec-
queue only to leave a voicemail.
tion is restore. The alternative – P&P method (Pen and Paper).
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