Track: Operations Management

Abstract

Benchmarking have been used and adopted by many companies in industries as a tool for performance measurement and possible improvement. It has been difficult to implement benchmarking as cost reduction tool in the restaurant industry because of high operational costs and also different cost structures requires different cost control measures. This study evaluated the role of benchmarking as a possible cost reduction tool in the restaurant industry. Its main objectives are (1) to identify the drivers of cost in the restaurant industry; (2) demonstrate the implication for adopting benchmarking as a cost reduction tool in the restaurant industry. The study adopted a survey research design reflecting on 5 restaurants purposively sampled and a mixed method research approach was used.  Interviews and questionnaires were adopted as tools for data collection. The research findings reveal that those restaurants that implemented benchmarking have realized an improvement in their overall costs reduction and have a better understanding of their cost drivers.  The challenges that are faced by restaurants in implementing benchmarking included lack of consistency and inadequate resources for an effective control of the whole process. Recommendations included the need to hire well trained employees that can effectively and consistently use the resources provided.