Benihana of Tokyo

Rocky Aoki developed the Benihana concept by modifying the normal American dining experience from a job shop operation to a communal dining batch processing operation. The processing model is designed to make the process as efficient as possible, reduce scrap, minimize wait times, and wait times in queues and between processes to effective parts of the process itself.

A customer enters the restaurant and is placed into the queue in preparation for processing. This queue is the bar lounge area. In this area, the process has been modified into a profit producing step in the process. Bar sales in a Benihana operations account for up to 30¬-35% of the sales for the operation. As customers are enjoying their drinks and conversation before dinner, they are being combined into batches of 8 for further processing.

When the process is ready for the next batch, 8 customers are shown to a table where a waitress takes their orders and processing begins as the customer enjoys drinks, salads, or soups while waiting for the chef to arrive. When the chef arrives, the transformation process becomes a work of art as the highly trained chef transforms the raw materials of steak, filet mignon, chicken or shrimp into delectable tidbits for the customer to consume transforming the customer into a happy satiated customer. While the customer completes the transformation, the chef moves on to process the next batch, the waitress brings the check and processes the payment. The customer as the end product, then exits the process. (see process flow diagram at end).

Key points in the process include:
Batch processing in communal dining arrangement
Efficient processing by elimination of scrap through limited menu selections Transformation of the waiting/queuing process into a profit generating process in the bar/lounge Minimization of wait time by bringing the chef to the table to entertain while preparing the entrée enabling highly attentive personalized service High quality input ingredients including top quality fresh meats and vegetables, sizzling hot dishes delivered to the customer, highly trained chefs, and quality ambiance and authenticity in the décor Maximized capacity by replacing some of the kitchen area with the hibachi tables arrangements reducing kitchen requirements to 22% of floor space vs. industry average of 30%.

Increased throughput by bringing the chef to the table enabling a typical transformation processing time of 45 minutes, less than typical restaurants operations. Reduction in overhead costs with the simplified management structure Minimal inventory requirements by standardization and limiting the menu selections Management of quality by training, process improvements, and customer satisfaction surveys. Operations located in high traffic areas for both lunch and dinner times for easy accessibility to the primary raw ingredient, a hungry customer. Unique advertising to attract attention and enhance the image of the restaurant. Adds were designed to enhance the visual experience that was part of the dining process.

Is Benihana a successful operation? How successful?
The Benihana operation is hugely successful growing into a large global operation while controlling that growth so as not to damage the quality and reputation of the operation. The success of the operation is based upon the devotion to a quality operation, a strong devotion to both employees and customers, attention to details, and an unwillingness to compromise the operations; The controlled growth proved to be essential to accomplish the growth mission. When Benihana found that franchising to accelerate growth did not produce the same quality operation as a company operated store, the growth plan was modified to maintain quality even though growth in the number of operations would be limited. Looking at the comparative operating statement below, the Benihana concept definitely produces successful results. Even using the lower ends of the ranges presented for a typical service restaurant from Exhibit 1 in the case study, Benihana not only exceeds a normal gross profit by 7% but outpaces the net income levels by almost 13%. Benihana does this while paying staff well and providing one of the highest quality meals available in the industry. Prepare an operating statement for the Chicago restaurant based on the operating information in the case.