Efficiency? Yeah, we'll get to that
Created on Thursday, 13 March 2014 07:00 | Written by Peter Korn
Read the original article in the Portland Tribune here.
As far as Mellie Pullman is concerned, the fact that Cover Oregon is far over budget, still only nominally operative, and labeled the worst of the new health care exchange websites in the country shouldn’t come as a shock. Have you ordered at a Portland lunch counter lately?
Pullman is a Portland State University business professor who serves as a consultant to restaurants and brew pubs. Her specialty is efficiency. And when it comes to efficiency — getting the job done well with as little waste of time and money as possible — Portland and Oregon just don’t seem to make it as high a priority as some other cities, she says.
Which got us to thinking about this whole idea of efficiency. Technology is supposed to make us more efficient, right? What about
local government? In a series of stories last month, the Tribune discovered that low-income housing built with federal grant money cost more than $200,000 per apartment, while the same apartment could be built for $70,000 when government money and its attendant regulations were not involved.
Another recent Tribune story highlighted the inefficiency and waste involved in medical clinical trials, which often are called off after significant grant money has been spent, because researchers are unable to find enough volunteers to participate. In fact, experts say, researchers typically continue spending money long after it has become obvious that a trial’s objectives will never be met.
Portland being Portland, what better place to start looking at efficiency than the food industry?
Pullman says she knows that she’s in an efficiently run lunch deli when she’s standing in a long line and a staff person comes out from behind the counter and takes her order. That means her drink or sandwich is likely to be ready soon after she gets to the front of the line and pays the cashier.
“If you look at any New York lunch place they have the whole fast line pace wired,” Pullman says.
Successful national chains, Pullman says, have figured out efficiency. If there’s a long line in a Portland Starbucks an employee will often hit the line to get drink orders started. That’s because Starbucks has cross-trained its employees.
Pullman says she’s been in any number of Portland high-end eateries where, for instance, drinks don’t get made and served quickly and fresh orange juice isn’t pre-squeezed and available to be put into drinks. Employees here often don’t appear motivated by a sense of urgency. “You can chat and work at the same time,” Pullman says. “It is possible.”
Technology not always answer
Drummond Kahn, Portland’s director of audit services, says he’s learned that government technology and construction projects tend to go over budget and past deadline, and no number of efficiency audits seems to change that.
“There’s an old project management saying, ‘Cheap, effective or on time. Pick two,’ ” says Kahn.
Two Portland projects come foremost to Kahn’s mind when the topic turns to inefficiency. The first provides an example of how technology can create unintended consequences.
Three years ago, Portland purchased a new emergency dispatch system from a Canadian software developer. Once it was installed, police officers and firefighters found they were getting confusing messages about where they needed to go. For instance, Kahn says, 1221 S.W. Fourth Ave., Room 310 (the city auditor’s office) came up on scanners as 310-1221 S.W. Fourth Ave. Or, 20 E. Burnside St., Apt. 10 was 10-20 East Burnside.
Turned out that was the Canadian style of presenting addresses.
Government often gets it wrong when they put projects out to bid, Kahn says. Four years ago, Kahn led an audit of the city’s newly acquired computer system for business services. He titled the audit, “Expensive, late, and incomplete.”
The project was bid at $14 million and ended up costing $41 million. Eventually, the city changed contractors in an attempt to get a working system. When Kahn reviews the audit, he stops at page 27, which reports that a contractor hired to provide quality control sent a report to a number of city project managers for 12 straight months with red alerts signifying the project was in trouble.
Yet, Kahn says, those red alerts were ignored for 12 straight months. The city did not assign an individual with authority to look into the problems.
Even today, Kahn can’t quite pinpoint the system breakdown, the lack of incentive for someone to call a halt.
University of Portland economist Mark Meckler thinks misguided incentives explain why the red alerts were ignored. First, Meckler says, the city should never have bid the project with anything but an output-based contract. That means, if the contractor doesn’t come in on time and with the agreed upon system, the contractor pays a penalty. Or doesn’t get paid.
But government bureaucrats feel pressured, Meckler says, because they are often required to take the lowest responsive bids for most projects. And low bids do not come in for output-based contracts.
Everybody in the business industry, according to Meckler, knows that business information systems “always take three times too long and three times the cost.” So why didn’t somebody call foul when the red alerts started appearing?
“Because everybody knows there are always overruns. The project manager probably wasn’t alarmed by the red flags. That’s just how it goes with these things,” Meckler says.
Asking and listening
Sometimes technology creates efficiency, says Phil Keisling, Portland State University government professor and a former Oregon secretary of state. Keisling’s prime example: vote by mail, which has saved taxpayers millions of dollars. But technology alone won’t yield efficiency, according to Keisling.
“You have to have people who are brave enough to ask the inconvenient question and listen closely to the answers,” he says.
When typewriters were invented, thousands of stenographers and scribes became unnecessary, Keisling says. When refrigerators came along, ice truck delivery people became redundant. Current technologies are doing the same, but only where people are willing to address the harsh realities.
Keisling recently participated in a study of fire services in Gresham, Troutdale, Wood Village and Fairview. The three smaller municipalities contract for fire service with Gresham, which Keisling says turns out to be a much more efficient model than having each town maintain its own fire trucks. But the study found the Gresham fire trucks get stretched too thin when there is more than one event to respond to at a time.
“Why do we keep three (sometimes four) people in fire gear each and every time, load them in a big red fire truck, navigate through often-busy streets, to get to what is known as a medical condition?” Keisling asks.
That, he says, is the inconvenient question.
People don’t want to ask it because they love their fire departments, they wouldn’t want to cost firefighters their jobs, and because they feel comfortable with “a just in case model,” Keisling says. But there are more efficient models.
Last year, Portland Fire Bureau Commissioner Dan Satlzman suggested that medically equipped SUVs, called Rapid Response Vehicles, at the fire stations could replace some of the fire trucks, respond to many of those calls and save the city money. In 2012, the city began a pilot project by outfitting two of the vehicles to respond to low-level emergency calls on a limited basis. An initial review of the program shows it can indeed save money and free fire engines for the most serious calls.
Whether Rapid Response Vehicles will ever be rolled out on a wider basis is still very much up in the political air. But at least sometimes, even in government, the inconvenient question does get asked.
When the topic turns to efficiency, restaurants are in a class by themselves. With hungry diners, fast or slow waiters, line cooks, bartenders and maître d’s, a restaurant meal is one of the few places consumers get to observe and participate in the pageant of efficiency or inefficiency. Even if they aren’t always aware of what’s going on behind the scenes, their growling stomachs don’t let them ignore it.
Portland State University business professor Mellie Pullman can’t sit at a lunch counter without noticing whether a plate of food is waiting under a heat lamp for a server to deliver it, or if wait staff are standing around rather than seeing if somebody needs a refill on water.
She’s noticed local restaurants and brew pubs ignoring simple measures that could save them money. She’s spotted employees at her local Burgerville checking their cell phones during slack time rather than finding another job to do. That, she says, tells her the local chain hasn’t instituted a strict employee standardization program, very Portland.
“McDonald’s would never allow that,” she says.
Pullman says she has been particularly impressed by west side restaurant Grassa as a model of efficiency. Grassa serves creative homemade pasta dishes that Pullman says are comparable to the food at gourmet restaurants, but at remarkably lower prices. Pullman calls it “fast scratch food.”
“I think they’re faster than most quality sandwich shops,” Pullman says.
An afternoon lunch with Pullman at Grassa revealed all sorts of little efficiency secrets. For instance, even as diners were munching away at their squid strozzapreti, one of the restaurant’s cooks was making more fresh pasta. But he wasn’t throwing the noodles into a boiler. Instead, he was using a scale to weigh out each portion — 5 ounces — and place it in a plastic container. Even the cook’s grated cheese is preportioned. So line cooks don’t have to measure or guess, just prepare.
And if you think serving homemade pasta rather than dry is a needless expense, consider that the fresh pasta at Grassa takes two minutes or less to cook. Dry pasta takes about 10 minutes to boil.
Grassa’s concept works if customers eat and move on. Those eight saved minutes can mean customers get their food quicker, finish their meal quicker, and make room for more customers sooner.
Another house efficiency, which is becoming more common in the new wave of Portland restaurants, is that customers stand in line and order at a front counter. It’s tricky, though. When there aren’t any seats available, Grassa managers step away from the register for awhile, or stay in place but make small talk with those waiting to order. That slows down the line.
“They use the line to pace the room,” Pullman notes.
Grassa, with three booths, two communal tables with 15 seats each, and seven counter seats, is not a big place. So when busy, the restaurant is constantly balancing two interests — it doesn’t want people having to stand in line too long, but it also doesn’t want customers’ food ready to serve before seating is available. The line acts as a buffer, moving faster or slower as needed.
The mostly communal seating represents another efficiency, Pullman says. Next in line takes the next available seat. If you’ve got a party of four and there aren’t four adjoining seats available, you have to split up and take what’s available or wait. Either way, all the seats get filled.
In a traditional restaurant, some tables may seat four, a “four top” in restaurant lingo, some tables may seat two. If a four top is available and the next in line is a party of two, they take the four top, which means the restaurant wastes two seats during their meal.
In addition, communal tables are more efficient simply because there is less wasted space — the space that would normally be vacant between two tables.
Even on a busy Saturday night, management says, the wait for food is only between 15 and 25 minutes. The pacing strategy out front ensures that cooks can’t get too far behind. And while there may be a wait for a table, drinks are served within one minute of customers’ ordering. How do they do it so quickly? Simplicity. Grassa serves a limited number of basic cocktails, and both its wine and its one daily beer are on draft. That means servers don’t have to waste time opening bottles.
Another efficiency — Grassa shares its dishwasher, refrigerator and some kitchen area with its restaurant neighbors, Lardo and Racion.
The average Grassa lunch customer stays between 20 and 45 minutes. No lingering.
“Twenty minutes,” Pullman says. “That’s how long people would stay at McDonald’s.”
An efficient restaurant was all part of Grassa’s grand plan, explains General Manager Nick Schuman. If plates of pasta that might fetch $15 to $20 elsewhere were going to be served for $7 to $12, Schuman says, the money would have to be made up by getting people in and out quickly.
Communal tables help there, according to Schuman. People are less likely to linger after finishing their food if they are seated next to strangers having a completely separate conversation.
Grassa is not a restaurant that encourages diners to stay and have after-dinner drinks. There might be money to be made that way, but that’s not the premise.
“This restaurant is much more efficient,” Schuman says.