CASE STUDY REPORT ON GOLD COST CONVENTION CENTRE Prepared by: Student ID No: EXECUTIVE SUMMARY The main objective of this research is to expand the sales and income of the catering services provided by Gold Coast Convention Centre. Many aspects should be considered to expand the income of the business, this research mainly targets on the plans and operation that should be taken instantly to increase the customer's services and the different adoptive measures that should be taken in terms of purchasing, receiving, storage, production and sales.it also seek about the difficulties that business organization faces in the context of customer satisfaction, improper services and inexperience of manager which is taking big step day by day towards the loss of business organization. Thus, through this case study it can be determine that the accounts should be checked daily instead of checking annually or monthly which will be the main point in the business to get away from the circle of loss. The system should be in proper supervision of the manager and instead of believing in the co-workers and inventory should be analyzed properly which will reduce the cost of goods and help to climb the ladder in the business by making more profit. Table of contents Page Number 1.0 Introduction 5 2.0 Background Information 5 2.1 COGS Analysis 6 3.0 Inventory Cycle Analysis 8 3.1 Purchasing 9 3.2 Receiving 9 3.3 Storing 10 3.4 Production 10 3.5 Sale 10 4.0 Conclusion 11 5.0 Recommendation 11 6.0 References 12 1.Introduction Gold Cost Convention and Exhibition Centre(GCCEC) is one of the largest convention centre which facilitates various event needs. This exhibition centre has been one of the renowned business centre in Gold cost. The entire design and space created gives maximum offer for conference and meetings which can accommodate meeting for 10 to conference for 6,000 including different functions such as award function, gala dinner. It has set a standard for multiple conference, meetings, catering services delivering seamless success in each event in Australia. There have been some issues from past year in different aspects which has been acknowledge by the General Manager through negative feedback from customers. 2. Background As the report shows the new catering service for the initial year make a turnover of $800,000in which 70% is obtained by food and remaining by beverage. As, the new Food and Beverage Manager with the temporary placement stayed for the last one year without having any past experience in that role. He was unable to know about the margins they should meet as being aware of exactly how sales revenue is made up from each service elements. Inexperienced F&B Manager decides to trust on the employees and doesn’t go with any specific system for any stock check, controlling or purchase and with that he prepared final year result. As the turnover shows the company has success in the view of manager. But all the feedbacks from guest regarding the services, food quality, size and presentation which were all negative were mostly from the regular customer. The participant’s also complained about their illness after the event and told that they are never going to participate in any events in the organisation. Since such huge issue have arisen in well-known Convention centre which has already set a bench marking and it’s not only about the complains and losing guest. Due to such scenario the company brand name is having bad image in whole Australia. The Gold Cost Convention Centre as being one of the largest and finest convention centre in Australia, the organisation itself should take initiative to handle the problem that has been formed due to the hiring of an inexperience Manager for the whole one year. The built up reputation of the company is going worse due to the unhappy guest and their negative comments towards the service and products. The main objectives for this research to be carried are listed below: • To identify the whole turnover of the organisation comparing with the realistic data and to analyse whether they make up profit or loss. • To understand the need of proper system for all the operation in events and conferences. • To know the need of strong and reliable management team for the company. • To improve the performances for catering services. • To make correct decision in hiring people with good experience and skills. • To maintain the consistent benchmarking of the company through the flawless performance. 2.1 COGS Analysis The direct cost which are used for the production of the items sold by any company is referred as Cost of goods sold. It includes the cost of products and the labour cost to produce the good. There are many ways to calculate COGS but one of the common way is to start with the beginning stock and add up total amount of purchases made during the period, and then deducting the closing stock (Investopedia 2016). As Gold Cost Convention Centre has gone down in their business and reputation due to the negative feedback from the customers and participation from customer is rapidly getting down. The blindly trust on employees and not taking care of any checks in stock, purchase has leads the company in the current situation. As all the employees are pillars of company but relying on them for everything could lead to the worst situation for the company. There are several other ways to motivate the staff rather than giving them all freedom. There should be regular check and update of every activity to set up the margin for the organisation. The case study shows some data that accumulate the food and beverage sales which are: Food Sales= $510,000 Beverage Sales= $290,000 Cost of Food Sales=$315,000 Cost of Beverage Sales=$112,000 The percentage of cost of food sales and Beverage sales are calculated as $315,000/$510,000 *100 Food Sales = 61.76% $112,000/$290,000 *100 Beverage Sales= 38.62% Therefore, the above figures clearly show the organisation does not have correct ration of margins that should be. The cost of food and beverage sales according to the standard of bench marking should be between 28% to 32% (Bakertilly 2016). As we can see the above figures and can say that both food and beverage sales percentage are not as per the standard. Although the convention centre has made up the turnover of $800,000. The food cost percentage can be seen double than the standard ones that means there are a lot of issues with the food stock or in the whole inventory cycle (purchasing, storing, receiving, producing). On the other hand, beverage sales percentage is very less comparing to food sales where we need to improve the selling skills to reach out more profit margins. As more emphasis should be given on the food sector using the proper use of system for checking all the inventory records time and again. Before these problems gets to the worst situation the management should take initiative to fix as soon as possible. The rough calculation of Cost of Goods Sold for the GCCEC according to the given figures can be seen as Cost of Food Sales+ Cost of Beverage Sales/ Food Sales+ Beverage Sales *100 $315,000+$112,000/$315,000+$290,000 *100 =53.37% Australian Taxation Office (ATO 2016) states some of the benchmarking for Catering industry depending on the turnover. As per the standard from ATO the average cost of sales is set as 36% where the Labour, Rent and motor expenses turnover are kept as 25%-33%, 4%-8% and 1%-2% respectively. As comparing to the Benchmarking for business as a guide to review the performance we can find out that there is a loss of around 14%. Thus, to overcome this problem and maintain the standard margin there should be implementation of right system as soon as possible. 3. Inventory Cycle Analysis Inventory can be defined as the assets of an organisation in the form of stock or store of products. There should be maintenance of raw materials and supply of final goods in order to meet the demand. As, Inventory Cycle Analysis comprises of various department where each of them has important role toward the management of inventory for any company. Purchasing, Receiving, Storing, Production and Sales are the parts of Inventory Cycle (Mwangi & Nyambura 2015). So, as to run the organisation smoothly there should be proper inventory management which helps to reduce cost, production, steady supply and decrease in loss. The main aims of inventory management are: • To maintain a desired stock level of specific goods or products. • To determine the amount and timing of ordering and controlling the ongoing activities. • To minimize the investment in inventory to increase the profitability. • To ensure the correct amount of items used at the right time and place. 3.1 Purchasing Purchasing is one of the first stage of inventory management. It refers to the procurement of goods and services from outside agencies or organisation. The items that are purchased should have the specific quality with required quantity at the accurate timing that matches the market price. Every company choose the suppliers who can provide them with the standard products in a reasonable price. Purchasing involves almost 50% of capital investment from a firm which plays a vital role in the Inventory Management (Smriti 2016). The main aim of purchasing department is to develop good procedures along with adequate controlling in stock. Therefore, to gain high level of coordination and cooperation with other department of the organisation purchasing should be properly visualized. 3.2 Receiving Receiving is the second major step under inventory cycle. It means the checking foods or meals delivered from the supplier. During the process of receiving the item purchased, quantity, safety criteria, quality and whether to reject or accept the food is included. There are several procedures involved in during receiving such as: • Planning for the delivery and tools for receiving. • Inspection of every goods and checking for the damage signs. • Frozen and refrigerated items temperature should be checked and recorded. • Checking the quantity of items thoroughly. • Damaged goods should be noted under the rejection in the invoice. • Paying of the bill by signing it. • Provide the date and timing for the all the food items. (National Food Service Management Institute 2002) 3.3 Storing Storing refers of proper storage of products accordingly. Storing is one of the essential part where minimization of wastage and proper use of food products can be implemented. There are many things that should be taken care of during the process of storing and they are listed below: • The first thing to follow during storing is FIFO (First in first out). That means, old items are placed on the front and new supplies at the behind. • There should be separate place to store the chemical products and food. • The food should be placed clean in order to prevent pest and infections. • All the food should be kept above the floor and away from the walls. • Floor and shelves should be clean. There are several practices such as frozen storage, dry storage and refrigerated storage. There is difference of temperature in each storage like for dry temperature should be maintained from 50F-70F, frozen is 0 F-10F and refrigerated is 41F.All the meat items, dairy products, vegetables and fruits should be kept separate so there will be no cross contamination. (National Food Service Management Institute 2002) 3.4 Production Production is the creativity used to produce final product using the raw materials maintaining the standard process. Many cooks don’t follow the complete recipe or either work from experience without having a clear recipe. The management of recipes can be done efficiently by using the codifying recipes (such as the yield after peeling and chopping vegetables, or the wastage caused by evaporation and transfer of a cream sauce from bowl to bowl). This helps to calculate the accurate price for the dish and make good profit (Caterer 2005). If the production planning is done systematically that could benefit the company easily. 3.5 Sales Revenue is generated from sales in any organisation. Every business centre should have the sales mechanism otherwise everything else in the company does not worth it. The marketing process can end up somewhere and the sales efforts begins and revenue is generated. Any business organization, sales is the department that generates revenue. The effort towards marketing creates favourable place to take sales. There are various sales forces such as professional, strong marketing that act as a serving key to uplift the revenue. These factors have strong relation with the customers and know how to build them (Leslie 2004). 4. Conclusion In conclusion, the best practice to run a restaurant or any operation company is food and beverage control system. It helps to introduce and gives better ideas from planning cash flow to stock control efficiently. It also provides with best way of menu planning, managing financial issues and to make right decisions (Caterer 2005). The correct planning and system for food and beverage control is followed the company can run smoothly with good profit margins. All the inventory cycles factors (purchasing, receiving, storing, production and sales) should be checked time and again with the proper strategy. The implementation of technology that can update the inventory check automatically should be done in order to keep smooth operation in business. The right candidate should be appointment for the position who have previous experience with the leadership skills and can manage the team effectively for good service. 5. Recommendation The well managing of stock control leads towards the profit margin. There can be many efforts done to maintain the level of benchmarking for the organisation. As in this case just making up the turnover is not important at the same time customer satisfaction should be taken care for maintaining long term relationship. There are several methods that can be implemented in order to maintain the standard of organisation and they are as follows: • The market list should be prepared in order to find out the right supplier creating a database. • The recipe management should be followed in order to reduce the wastage and control the cost. • Reporting should be prepared on daily, weekly, monthly and yearly basis so that perfect figures for food and beverage cost can be calculated. • We can find variety of food and beverage control software products to connect with POS system that can update all the information about stock, sales. • There should be right selection of candidate for the right position. So that company reputation remains constant. 6. References Bakertilly, 2016,Restaurant Benchmarking ,viewed on 2 May 2016,http://www.bakertilly.com/uploads/restaurant-benchmarking.pdf Caterer, 2005,Food and Beverage control system, viewed on 1 May 2016,https://www.thecaterer.com/articles/300749/food-and-beverage-control-systems Chand, S 2016, Purchasing, viewed on 1 May,http://www.yourarticlelibrary.com/material-management/purchasing-its-meaning-definition-importance-and-objectives-material-management/27936/ Gccec, Nd, Facilities and Services, viewed on 2 May 2016,http://www.gccec.com.au/facilities-and-services.html Investopedia, 2016, Cost of Goods Sold, viewed on 3 May2016,http://www.investopedia.com/terms/c/cogs.asp Leslie, C 2004, The importance of Sales in an Organisation, viewed, on 5 May 2016, http://smallbusiness.chron.com/importance-sales-organization-25038.html Mwangi & Nyambura, 2015,’The role of Inventory Management on performance of Food processing companies’, Journal of Business and Social Science, Vol.4, no.04, pp.64-78 National Food Service Management Institute, 2002,Inventory type, viewed on 4 May, http://www.theicn.org/documentlibraryfiles/PDF/20071128011115.pdf