This chapter discusses industrial canteens. It explains that industrial canteens are needed to provide nutritious meals for workers who often work long hours. They are considered a welfare facility for employees. An industrial canteen consists of a coordinated set of pre-production, production, and post-production activities to prepare and serve meals. It requires the joint efforts of management and staff at all levels to efficiently operate the continuous cycle of food service.
This chapter discusses industrial canteens. It explains that industrial canteens are needed to provide nutritious meals for workers who often work long hours. They are considered a welfare facility for employees. An industrial canteen consists of a coordinated set of pre-production, production, and post-production activities to prepare and serve meals. It requires the joint efforts of management and staff at all levels to efficiently operate the continuous cycle of food service.
This chapter discusses industrial canteens. It explains that industrial canteens are needed to provide nutritious meals for workers who often work long hours. They are considered a welfare facility for employees. An industrial canteen consists of a coordinated set of pre-production, production, and post-production activities to prepare and serve meals. It requires the joint efforts of management and staff at all levels to efficiently operate the continuous cycle of food service.
3.1.2 Industrial Canteens as a welfare facility 3.1.3 Composition of Industrial Canteen 3.2.1 Administrative Set up canteen committee 3.2.2 Administrative Set up canteen manager 3.2.3 Administrative Set up canteen personnel 3.3.1 Records & Registers in Industrial Canteen 3.3.2 Purchase, Cost & Sale Register 3.3.3 Financial Working in Industrial Committee 3.4.1 Accounts-Daily, Weekly, Monthly & Annual Accounts 3.4.2 Daily, Monthly Annual Budget 3.4.3 Income & Expenditure Ratios 3.5.1 Management Procedures : Supervision, Monitoring, Controlling 3.5.2 Management Procedures - Directing, Communicating, Reporting 3.5.3 Management structure of Industrial Canteens
CHAPTER THREE: INDUSTRIAL CANTEENS 3-1-1 Need and Justification of Industrial Canteens In the industrial belt of Pune and Pimpri-Chinchwad there are many industrial units that run round the clock -Kirloskar units, Bajaj units, Tata units, Kinetic units and other units like Ruston Greaves, SKF, Thermax, Forbes Marshall and others run their production units to the full capacity. The workforce has to report at least an hour before the commencement of the shift. They start from the place of their residence at least an hour or more before the reporting time. The same procedure is followed when they finish their work. Their working schedule lasts for about nine and half hours. Add to this time required before reporting and after the end of the work-shift. The total time required for transport and work in the shift is of about eleven to twelve hours. It is but natural that these workers need to be fed properly and sumptuously. This requires the establishment of the catering unit on the premises of the industrial unit. It is obligatory for industrial units having more than 250 employers to provide the canteen facility. Though it is optional for them, many units having less than 250 employees in their workforce, provide the canteen facility on their premises for the convenience of their workforce. The provision of wholesome food needs to be made for the workforce that is required to put in their hard physical labour in the industrial unit. It is essential to maintain a balanced diet of sufficient nutritional values to be served in such industrial canteens. The need for the provision of canteen facility for workers is thus universally acknowledged in respect of the industrial units for more or less than 250 employees in the workforce. The need to establish such catering units is the main ground of its justification. The physical necessity of the establishment of an industrial canteen justifies its existence. It is a welfare facility to be provided to the workers in an establishment. It is a humanitarian gesture on the part of the employers. The welfare facilities that are given to the employees in a unit are considered to be the part and parcel of the expenditure an employer is required compulsorily to incur. It is now a privilege of the workforce to demand this facility. The provision of an industrial canteen is thus an obligation for the management of the industrial establishments. The need and justification of running an industrial canteen in an industrial unit that is run satisfactorily need not be exaggerated as the facility is acceptable to both the parties concerned that is the employers and the employees working in those units. 3-1-2 Industrial Canteens as a Welfare Facility The aim of every industrial organisation is to gain maximum at minimum costs through a loyal and co-operative workforce. In order to achieve this aim, it is necessary to provide a work environment that is comfortable, convenient and pleasant to its workforce. The establishment is obliged to fulfil the needs of the employees if they are to give their best to achieve organisational goals. The employers ought to provide certain facilities and benefits to their employees to gain maximum at minimum costs. These facilities and benefits are often, referred to as Staff Welfare provisions. These provisions are classified under the heads of physical needs and socio-psychological needs. The physical needs are those which are required for comfort at work. The welfare activities of this category are the provision of proper lighting, temperature and humidity control, fresh air free from fumes and gases, low noise levels, a clean environment, clean uniforms for staff, toilet and hand washing facilities, waste disposal equipment, proper drainage and sanitation facilities, safety procedures and devices and appropriately designed equipment and furniture. Sound proof ceilings, fitting exhaust fans, provision of sinks and sitting and resting facilities are required in the industrial establishments and particularly in the canteens. The socio-psychological needs cover the needs for security through adequate wage payments, provision for housing, infant creches for working mothers, transport, social working hours, leisure and holidays, leave for sickness, maternity and counselling services for stress at work-in-addition to the wages, subsidies on meals, housing and others help to enhance wages indirectly. The physiological needs are the needs of all the people. The provision of safe drinking water, canteen facilities, rest periods and room, clean toilet facilities and medical facilities are included in the physiological needs. Canteen facilities are a statutory requirement. Irrespective of this, it is moral obligation on employers of catering staff to provide them with fully or partly subsidised meals. Health facilities generally include regular medical check-up, treatment for ailments or injuries, preventive medical care, health education and health insurance. Money is an important motivator of peoples behaviour as far as it can help to satisfy basic physiological needs. After that it is the non-financial incentives that take care of psychological and social needs. The employee welfare measures include (a) work environment facilities related to the maintenance of temperature, humidity, clean air, noise level and safety, (b) hygiene and sanitation such as toilets, change rooms, rest rooms, waste disposal, drainage protective clothing, and footware (c) welfare amenities such as canteen services, safe drinking water, health facilities and medical checks, (d) housing facilities such as HRA free accommodation and loans for housing (e) recreation as sports, games, reading room, library and films and (f) training such as job development, individual development, language training communications, craft training and lectures etc. The provision of canteen facilities thus satisfies the physiological needs of the worker and thus running a canteen in an industrial unit is a labour welfare facility. 3-1-3 Composition of Industrial Canteens What is an industrial canteen composed of? An, industrial canteen exists in its utilitarian functioning, which is plainly to feed the employees in an industrial unit. Its functioning is a service-oriented facility. The core activity in the industrial canteen is the cooking of the items of food in the kitchen and serving them fresh and not to the consumers in the dining hall or its service area. The preparation of food production, the actual food production and the food service to the consumers are the central activities to be performed in an industrial canteen. In addition to these core activities, what goes before the pre-production and production stages and what follows after the food is served are also part and parcel of the schedule of the functioning of an industrial canteen. What an industrial canteen is composed of is the continuous and complex network of activities during the pre-production, production and post production phases of preparing food and serving to the consumers in order to enhance their efficiency through the provision of wholesome meals and by creating a comfortable work- environment. The orderly sequence of these activities needs to be maintained and each of the activities needs to be executed most efficiently and a delicate balance between competent work culture and consumer satisfaction needs to be maintained in the functioning of an industrial canteen. The composition of an industrial canteen lies on the co-ordineted joint efforts of a group of workers involved in the canteen management from the person at the top who is supposed to manage and supervise the functioning of the industrial canteen to the person who is supposed to be a helper in the dishwashing operations. The hierarchy of functions, roles and activities needs to be cautiously put to the work on hand from day one to the next and from the next to the next to that and so on and on throughout the year. It is a constantly moving cycle that has no stops and keeping the cycle which is made of many many inner cycles, is what is involved in the composition of the industrial canteen. It is a joint task of all the concerned and any slip or error at any level is bound to have, its negative results on the entire job, involved in the functioning of the industrial canteen. There are no material components but a consistent chain of physical actions that need physical labour, mental alertness and psychological strength to carry on the activities in the industrial canteen. The administration, the management and the execution of these core and related activities constitutes the composition of the industrial canteen. What an industrial canteen composed of is the conscious combination of the head, the hand and the heart domains to plan, to work out and to feel the various jobs involved in feeding the people. In India, this task has been carried out in ceremonies and festivals from the times immemorial and the one who cooks food does it as if he is worshipping God-as if doing the pooja (worship) of Annadevta (the god that is food) and the one who eats the food gives heart-felt compliments with satisfaction, in the words like Annadata sukhi bhava (let the giver of food be perennially happy). Their sincere commitment to the duty on hand in the production and service of food is at the heart of the matter in the functioning of an industrial canteen. 3-2-1 Administrative Setup: Canteen committee The administrative set-up of the industrial canteens is three-tier in pattern because the higher decision-making body is generally the canteen committee, and the middle level administration is carried out by the canteen manager and the lower level administration which is operative management is to be executed by the canteen personnel. The provision of the canteen committee is made in the rules and regulations for the industrial canteens. It is suggested that the canteen committee is to be constituted on the tripartite basis. The representatives of the management, the representatives of the employees of the industrial unit and the members of the canteen staff are required to form the canteen committee. The canteen manager or the contractor is required to work on the committee. The members represent the different cadres of employees such as clerical staff, workers and others, if it is so required. The composition of the canteen committee is determined by the industrial unit as a whole or its management or its policy framework. The canteen committee thus constituted either through the representation or the nomination of members is required to carry out the functions of managing the said industrial canteen. The representation in some cases is given to the members elected through elections conducted for the specific purpose whatever is the nature of the composition of the canteen committee it has to function as the governing body for conducting the affairs of the canteen.
The administration of the canteen is to be carried out by the canteen committee by making the major decisions. It is observed that in some units, a non-interference policy is observed and so the task of decision-making is entrusted to those who are personally involved in running the industrial canteen and in such cases either the canteen manager or the canteen contractor becomes the sole administrator of the canteen. In some cases, the canteen committee decides what and when to purchase provisions for the canteen, the quantity of provisions, of the mode of procuring the provisions. The decision about menu planning is made by the canteen committee whenever it is found necessary. The maintenance of the accounts and the provision of money matters are sometimes entrusted to the canteen committee. In some units the entire administration from the higher level to the lower level and all the tasks involved from buying the provisions, preparing the food, serving the food to the consumers and the different, post-production tasks are to be shouldered by the canteen committee. The total administrative set-up and procedure depends on the canteen committee and its efficient functioning in many industrial canteens. The canteen committee is the top administrative body that varies in its nature from the most non-interfering functionary to the most interfering authority and these differences are noticed from one unit to another depending on the policy framework, administrative set-up and the style of functioning of each of the industrial canteens in the units in the industrial belt and the same is observed in the case of the industrial canteens surveyed in and around the Pune region. 3-2-2 Administrative Setup: Canteen Manager The canteen manager is the key functionary in the administrative set-up of an industrial canteen. He occupies a central position between the higher level administrators and policy-makers who decide the policy framework of the functioning of the canteen and the canteen staff that actually brings into practice what has been planned to be executed in respect of food to be fed to the consumers in the industrial unit concerned. The canteen manager thus holds a very crucial post in the administrative functioning and the managerial execution of the industrial canteen to which he belongs. In some cases, the canteen manager is the sole administrator of the canteen in the industrial unit. The canteen manager or the canteen contractor holds this key position in many industrial canteens. The canteen manager is required to play different roles in carrying out his duties. He is required to look after the purchases to be made. It is his duty to fix the quality and quantity of the items to be purchased. It is he who decides when and where to make these purchases. He is responsible for making decisions about the rates to be approved while finalizing the procedure of making purchases of grains, cereals, spices, vegetables, fruits and other items required in the production of food. The physical features are determined by the canteen manager such as the items of furniture, different fixtures and the seating arrangement and the space management for the store, the kitchen and the service area. The canteen manager has to carry out the important task of deciding the menu and planning the menu per shift, per day, per week and even per month. The material provision, the physical arrangement and the menu planning are for the canteen manager the basic functions of his administrative responsibility. The purchase manager, the supervising authority for the physical infrastructure and the decision-making administrator for menu-planning are some of the roles the canteen manager is required to play in the pre-production phase of the preparation and production of food in the industrial canteen. In the phase of the production of food items, the canteen manager is required to oversee the job done by the cooks, in particular those involved in the making of vegetables, chapatti-roti-paratha-puri, the sweets and salad and other supplements. Then he is required to supervise the work carried out by the waiters and helpers. He is more or less a personnel-in-charge in this phase. His role as a supervisor begins with the post production phases and cleaning, washing and sanitation routine. He is required to work as a cashier in most of the units and as such he has to occupy the seat at the reception counter. From this place he has to control, manage, direct and supervise all the tasks being carried out on the premises of the canteen. Many times he is required to maintain the accounts and prepare the records and registers. He has to carry out the correspondence. He is the linking bond among all the workers involved in the functioning of the canteen and he is the person who is involved in a responsible capacity and who has to act as a bridge between the world of the canteen and the world of experience outside the canteen. His is a very delicate task of maintaining balance between management and workers, decision making and implementation and the worlds inside and outside the industrial canteen. He is a single individual who has to work in multiple responsible positions to make catering a comfortable and satisfying experience to those who gather at the canteen to get refreshed physically and mentally. 3-2-3 Administrative Set-up : Canteen Personnel The canteen personnel or the canteen staff works at the bottom of the pyramid- like structure of the administrative set-up of an industrial canteen. These are called line management or lower management workers. The different cadres make the canteen personnel. Apart from the canteen manager, most of the other employees as the staff of the canteen are included in the category of the canteen personnel. In the kitchen there are cooks, assistant cooks, a maker of tea-coffee, dishwashing workers, the cleaning workers, those are required to cut, slice, peel, and clean the materials of the food items to be used for production of the items. In the service area there are the steward, the captain, the waiters, the utility workers, the helpers and the cleaners. There are the cashier, clerk, the accountant and the servants in the reception section. The maid servants have to perform certain specific duties. The catering, the purchasing, the service, the general administration, the financial management and the personnel management are the major heads of activities that are involved in the running of an industrial canteen. The staff that is employed to carry out these various activities forms the category of the canteen personnel. This is the group of those individuals who actually perform the different operations and complete the different procedures and processes necessary in the running of an industrial canteen. This is the actual work- force of the canteen activities to be performed in a routine schedule day in and day out almost without interruption on all the working days of the year, which in majority of cases, happen to be all the 365 days of the year. The management is of administrators and the middle management of managers and supervisors and the line management is that of the actual performers of the tasks in the running of an industrial canteen. The canteen personnel are required to work together with a sense of commitment and a high degree of efficiency to maintain the quality of food at the industrial canteen establishment. It is the co-ordination of the different activities and the simultaneous operative functions which enables the canteen establishment to bring out a satisfactory feeding experience for the employees of the industrial unit. The administrative set-up of canteens has to pay attention to this level of administration as it is necessary to maintain a close watch and a supervisory attention on the working of the employees in the canteen personnel. It is observed that a half-cooked roti or a burnt chapatti, the supply of onions and a slice of lemon, the fresh, clean glass of cold water or even the uncleaned plate or table cause complaints from the consumers. That is the reason why the working of the canteen personnel becomes most significant in the context of the running of an industrial canteen. This is the staff of the canteen that maintains the quality and taste of the eatables prepared and served in the canteen. The administration, the management and the actual performance thus make the three-tier pattern of the administrative set-up of the catering units in the industrial canteens which are in general practice represented by the all-rounder personality of the canteen manager and the practical performance of the canteen personnel from cooks to cleaners who are busy in the store, in the kitchen and in the service area of the canteen. 3-3-1 Records and Registers in Industrial Canteens There are three main aspects of the functioning of the industrial canteens that need to be appropriately recorded in specific books and registers. These are (a) the administrative records (b) the records of financial transactions and (c) the records of the staff working in the canteen. The records which need to be maintained for administrative purposes are records like the stock register, the attendance register, the record of leave of workers, the record of menu-sheets, the record of meetings such as the minute-book, and other such necessary records. The stock register may be a single book for all materials or separate for consumables and non-consumables. The property register will keep a record of the immovable assets. The store records will prepare the day to day actual position of the material provisions to be used, being used and have been used in the canteen. The cutlery register, the crockery register, the furniture register, the equipment register and other registers will have to be prepared, provided the stock of these articles is considerably large otherwise, the same single register may contain sections recording the stock of these articles. To maintain the stock register as a single book with separate sections or as separate books for different types of articles will depend on the size of the catering establishment. For most of the canteens that are surveyed in this study will need the main stock register. The daily attendance register and the leave record register are meant for the employees working in the canteen. The Wages and Salary Register, the PF account register and the Overtime Allowance register are related to the canteen staff. The presence and absence in the daily attendance register and leave record register mark the employees on duty or otherwise as the case may be. The record of menu sheets is essential for the preparation of the cyclic menu for a week or a month. Menu planning, menu preparation and menu scheduling will enhance on account of these records and registers if maintained with accuracy and efficiency in the establishment like the industrial canteen. Like the stock register and registers related to the employees, the registers and minute-book concerned with the meetings of the canteen committee are essential in the administrative set-up of the industrial canteens. The canteen committee being the responsible decision-making body makes decisions about the working, the daily business and the general policy and these decisions are recorded in the minute book which is an important document to run the canteen as per the resolutions passed in the committee meetings. The maintenance of the records is vital in the running of the industrial canteen. The administrative aspects are duly recorded due to the up to date keeping of these records and registers. The management of the canteen personnel is effectively made on account of the different registers maintained to record the service profile of the employees in the canteen. The registers and records keep the account of what should happen and what actually happens in the administration, financial and personnel management and the organisational working of the industrial canteens and therefore those are of vital importance in the industrial canteen management. 3-3-2 Purchase, Cost and Sale Register The financial transactions of an industrial canteen are mainly the purchase of materials for the production of food and the sale of the items of food. What is significant is the determination of the cost of food items and the cost pricing of the items. The purchase register may be a single register or a set of separate registers for the perishable and non-perishable items or for the bulk purchases and the daily purchases. There is the possibility of category-wise or item-wise keeping of the records of purchases in the purchase register. The item-wise registers of purchases can be useful if the details of the items, their quality, quantity, weight or measurement and price are recorded in the relevant sections under different headings. The food and beverage section may be kept separate from the sections of furniture, equipment and utensil for cooking and for serving. The purchases of perishable items such as milk, eggs, vegetables and fruits may be recorded with specific details. Purchases of the materials determine the volume of expenditure. The purchase register gives information about the materials and the other essentials in running the industrial canteen and the planning, the preparation and the production of the items of food is decided on the basis of what the store contains. The market, the store and the kitchen are the locational points which are necessary in making an eatable item out of the provisions purchased from the market and stored in the store of the industrial canteen. The sale register keeps the record of what is sold, in what quantity and for what price. In some cases, the cash transactions do not take place on the counter. In place of the cash in return of the items sold, the coupons are used. The issue of coupons and its utilization pattern is pre-determined as per the procedure fixed by the authorities of the canteen. It becomes obligatory to keep a record of the coupons collected and to tally it with the sales of the items served in the canteen. Whatever is used for the sale transactions, the cash amount or the coupon collection, the sales determine the receipts in the canteen. The expenditure from the purchase register and the receipt from the sale register are the two sides that are necessary to present the financial position of the transactions in the industrial canteen. The purchase register and the sale register both together enable the canteen management to determine the price of the item. The cost register and the cost pricing procedure are to be essentially maintained in order to find out the inputs required in the production of the food items and the determination of the level of the price of the item concerned. The cost of materials, the labour charges, the establishment expenses and the overhead charges need to be calculated to determine the price and on account of this price of an item like potato-wada may vary from canteen to canteen. The range of price may be Rs.5 to Rs.10 for such an item as the bare price of the product, but the way it is served, where and when served and what other comforts are offered with it may determine the actual price in the range of Rs.10 to Rs.25 depending on the cushion, the furniture, the dishes and the environment in which the item is served. It is observed these days that the price of the ambience today is much more that the actual price of the item. It is for this reason that the industrial canteen management tries to maintain the price level by keeping the ambience to the minimum and the quality and wholesomeness of the food items as the matter of significance. It is for this reason that the subsidy is offered on the prices of the items, or discounts given, or free meals or free coupons or subsidized item are given by the industrial units that ultimately control the industrial canteen finances.
3-3-3 Financial Working in the Industrial Canteens Financial statements in the industrial canteens are of different types. It has been observed that the purchases denote the expenditure side and the sales present the income side and the both need to be stated in the manner which is desirable. The expenditure and the income sides both are presented through the information sheets to be supplied in the statements of expenditure, that is, the report of the two factors shows the actual financial position and other factors. The income and expenditure statements provide just one aspect and those are dependent on the purchases and sales recorded in the registers maintained specifically to keep track of the two. These statements prepare the ground for the profit and loss account. The profit and loss statements are required to prepare the trial balance and the balance-sheet. In addition to the purchases of provisions, the other items such as wages and salaries, the establishment expenses by way of expenses on furniture, linen, equipment, bills for water, gas, power and telephone connections, the overhead expenses and others need to be put in the appropriate format so that the financial status becomes clear. These total expenses present one side that is of the outgoing flow of cash transactions and therefore the other side of the sales, the coupons, the subsidy, the monetary receipts need to be taken into account. The running of an industrial canteen is a labour welfare activity and therefore an entirely commercial approach need not be adopted in the consideration of the profit and loss statements of the establishment like the industrial canteen. Though it is not exactly a commercial enterprise, the running of an industrial canteen requires the necessary monetary discipline and taking this into account, the financial working of the industrial canteen must be carried out in the manner that is required to be followed in the other establishments. In many cases, the industrial canteen is run by the contractor and in all the industrial canteens, that are run by the contractor the same financial working is found to be in actual practice which is followed in the running of an eatery in the private sector by an individual or an establishment that is constantly seeking to increase the margin of profit-making. It becomes necessary in such circumstance to curb the profit-making tendency and to maintain the balance in keeping the quality of food intact and keeping the welfare of the employees uppermost and for this purpose the check and control procedures need to put into operation by the controlling authority. It is essential to preserve the nature of an industrial canteen as a welfare facility to feed the workforce sumptuously with a balanced and highly nutritious diet at the low cost. In this respect, the financial working of an industrial canteen is much more difficult and much more complex in nature than that of the other catering establishments run for more and more margin of profit. 3-4-1 Accounts - Daily, Weekly, Monthly and Annual Accounts. The accounts should be maintained meticulously. Funding, investing in assets and controlling operations are the three major aspects of financial decision making in any enterprise-private or organizational and irrespective of the fact whether it is profit making or the non- profit making unit. The importance of financial information is emphasized but more statements or figures have little significance. The information needs to be related to the technical, staff and materials controls. This is a continuous process because there is a side range of products and services offered for sale in the catering establishment. In the west most catering establishments follow a uniform system of financial accounting. In a developing country like India, there is a large disparity in the methods of maintaining accounts. The stipulated procedure of maintaining accounts is to be followed in the financial canteen management. The daily accounts are to be maintained through vouchers, bills, coupons and the recording of the incoming and outgoing cashflow should be completed at the earliest. The daily accounts should prepare the ground for the weekly accounts. The weekly accounts should lead to the monthly accounts. It will be a good practice if the financial discipline the preparing quarterly, half yearly and annual accounts is followed scrupulously. The general guidelines for preparing such accounts are uniformly applicable to both the industrial canteens and the departmental canteens. The inputs of capital, grants and subsidies from the departmental source are available for the departmental canteens but for the other industrial canteens, the capital inflow is procured from the norms prevailing in the market conditions and the proprietor of the canteen will be responsible for such procurement. That apart, maintaining the accounts procedurally and the time frame for the same and the method of the preparation of accounts and the schedule of the submission of accounts are other related matters remain almost the same in both the categories of the industrial canteens and the departmental industrial canteen. Annual accounts comprising of Income and Expenditure, Trading and Profit and Loss Account, Balance Sheet etc. must be prepared immediately on the close of the year. After internal audit they should be submitted to the Integrated Financial Adviser of the Department/ Office within three months of the close of the financial year. It will be the responsibility of the Manager to complete and submit all accounts progressively prepared as on the last day of every month, within seven working days of the following month, after internal audit, to the Honorary Secretary for putting up to the Managing Committee. The following books of accounts are to be maintained by the Departmental and other Industrial Canteens : 1. Cash Book 2. Ledger 3. Stock Register (for expendable items, coupon books, crockery, empty containers etc.) 4. Dead Stock Register 5. Preparation Register (to show the details of eatables produced) 6. Sales Register (Work Sheet) 7. Coupon Sales Register 8. Salary Register 9. Attendance Register 10.Bill Register (for sale on credit) 11. Kitchen Register (if a number of canteens is grouped together for Kitchen functions) 12. Journal (if number of daily transactions of credit sales and purchase exceed five) 13.Annual Accounts The responsibility for proper maintenance of account books, submission of monthly and annual accounts rests with the Manager of the Canteen. The audit of accounts will be carried out by the internal Audit and after that it will be carried out by the Statutory Audit Squad appointed for the same specific function.The periods for retention of the records of the canteens are to be prescribed in consultation with the competent authorities for a period form One year to Ten years depending on the nature of the records and register. The annual rates of depreciation will not be allowed to exceed the under mentioned limits for Furniture 10 percent, Equipment -20 percent and Crockery of 33 percent. After applying reasonable rate of depreciation within prescribed limits the unserviceable non- expendable equipment furniture, crockery etc. will be categorized as Beyond Economical Repairs (BER), these articles will be disposed of through local auction. The money received will be credited to the canteen funds. Book balances will be adjusted accordingly. Each member of the Managing committee shall assume full responsibility for efficient running of the canteen and to endeavour and strive for avoidance of losses as far as possible, as per the duties allocated to him by the committee. The net value of general working losses/ liabilities as reflected in the annual accounts will be placed before the Managing Committee, which will go into the reasons for losses and decide the remedial measures to arrest the losses for the future. 3- 4-2 Daily, Monthly, Annual Budgets. Financial management is that area of business which deals with the effective management of all the resources of an establishment in monetary terms. It involves keeping account for all the transactions made, also recording any information to enable the decision making on equipment, employees, purchasing sales and other areas of the canteen management. The term accountancy is used to describe the process of measuring in the financial terms the past, present, and future operations of a business. It helps to assess the financial status of on organization at any particular point in time. The term management accounting covers more than just the preparation of financial statements or accounting reports. It is concerned with the interpretation of reports and their presentation in a form that will enable canteen management to make profitable decisions about utilization of resources. Though based on knowledge of basic accounting techniques, it is chiefly a matter of nature of attitude and approach towards the complex business problems. It includes the preparation of cost statements and cost estimates. The direct and indirect costs involved in the process of production need to be identified. This prepares the ground for standard costing. Standard costing includes comparison of actual with standards and determines variations. The importance of standard costing needs to be properly understood in respect of the standard costing for dishes, meals, and other eatables and beverages. The cost accountancy and standard costing are very useful to prepare the cost estimates. These become part of the cost budgeting. Planning and control of sales determines the extent of the use of materials. The materials estimates or the materials budgeting help in the appropriate utilization of the materials. There is the significant contribution of budgets in the management accounting. For this purpose the fixed and flexible budgets need to be prepared. Similarly capital, and operating budgets are used as standards for measuring actual performance. As the Daily, Weekly, Monthly and Annual account are to be maintained to record the financial status, it is necessary to plan and prepare in order to make the decision making process easier and to prepare daily, weekly, monthly, and annual budgets in the financial organization like the industrial canteen. Catering is essentially a service industry. Some of its special features make it different from other industries and complex in terms of financial viability. There is a wide variety in the types of products and services. There is a large variety of costs incurred. The proportion of fixed costs is very large. A variety of prices needs to be determined for the same items depending on the nature of services offered. Catering establishments are always affected by the mood and the goodwill of the consumer and the seasonal demand. All these diverse features make financial management of catering and food services rather tricky, difficult job. Therefore, decisions are required to be made at every stage and for the decisions to be made effectively, budgeting men, manner, materials and processes is required.
An illustration will serve the purpose Date 01-04-2004 Estimate s % Actual % Variable costs 5000 50% 3000 30% Fixed costs 4000 40% 6000 60% Net Profit 1000 10% 1000 10% Total 10,000 100% 10,000 100% This daily budget is in the simplest format. It can be detailed out including the different products and services. The extension and addition to the same will possibly generate by putting together the daily budgets, the weekly and monthly, budgets. The seasonal budgets may to some extent correspond with the quarterly budgets such as the summer budgets of the months of April, May and June, the rainy season budget of July, August, September, The autumn season budget of October to December and the Winter budget from January to March. This will finally lead to the preparation of the annual budgets. The budgets exercise check and control mechanism on the financial transactions of the industrial canteens. They provide a blue print for the What and How of the operations to be performed with the cost estimates maintained from a single day to even the span of the entire year in catering services. 3-4-3 Income and Expenditure Ratios. Cost pricing in canteen Management is a process by which managers attempt to direct, regulate and restrain the actions of the canteen personnel in order to achieve goals. This is essential in the area of food and other costs because loss is possible at every stage in a catering operation. The food costs in any catering establishment, whatever its size, vary between 40 per cent of total sales. These costs being variable need to be controlled because on them will depend the amount of profit that the establishment makes. In the sequence of the production cycle and service, the losses are possible because of lack of supervision at the point of receiving supplies, insufficient menu planning, lack of care in the Kitchen production and lack of training in the service of prepared food. The exact cost of a dish should preferably be known before it can be served to the consumer at a profitable price. It is important to cost dishes and meals accurately to ensure that they are cost-effective and cover all costs incurred in their preparation and service. It is the usual practice in catering to determine the total cost of materials used in producing a dish of a standard quality and then adding to it a certain percentage to cover labour and overhead costs to calculate the selling price. The method of standard dish costing is useful in setting the targets for price and usage of the materials, thus helping to detect differences in the process of food production and service- Dish costing needs to be checked and altered periodically when food prices change.
A sample of a standard costing sheet is given below. Standard Costing Sheet Dish Chapati Date 12-7-2002 Portions 4(8 Chapatis)
Sample costing Sheet for Chapati Costing sheets for each dish on the menu may be prepared to calculate the meal or menu costing. Since catering is a service industry, labour, staff costs form the largest expense next to food. Labour costs include salaries of staff, the value of all allowances, facilities and benefits to them such as meals, medical facilities, housing, insurance, bonus, pension, and uniforms. Overheads include all other costs like rent, depreciation, fuel, cleaning materials, linen, security, administrative and costing cost. From costing we have to move on to the process of determining what to charge for food items which is termed pricing in commercial catering. The pricing takes the profit making goal but in the industrial canteens it has to take the cost effective goal. The method of pricing used often is the cost plus method. The rate of return on the capital method is also used for the determination of pricing of items. In general 150 per cent of food cost is added to determine the pricing. It is evident that irrespective of the size and nature of the food service establishment, price fixation must aim at covering all costs involved in the preparation and service of food. The determination of prices varies with the fixed cost and overhead expenses of every establishment. A full part subsidy is provided to many factory or office canteens, Generally, a supervisor runs a canteen who is accountable to the personnel manager or to the works manager. Normally, the canteen provides main meals, snacks and tea. Although employees generally like plain well cooked and attractively served food, the canteen supervisor tries to introduce a weekly cycle for the sake of convenience and to provide variety. It is however difficult to offer a choice of dishes everyday. The canteen supervisor is responsible for controlling costs and therefore he collects cost in a manner that facilities cost control. When the principle of costing is applied to this field, the objective is to keep the costs to the minimum consistent with quality. A monthly operating statement is prepared to show the various expenses under appropriate heading. The total cost is compared with the amount realized from the sale to find out the next operating profit or loss. Under the following main account headings, The costs are collected periodically.
(a) Provisions like - Meat, eggs, fish, vegetables, fruits, flour, rice, milk vegetable oil, tea, coffee, sugar, soft drinks, etc. (b) Wages and salaries of Labour Supervisor, cooks, waiter, kitchen assistants, porters. (c) Services as Gas, power, electricity, steam, water, light. (d) Consumable Stores such as Table linen, cutlery, glassware, crockery, cleaning materials, brushes, dustbins, etc. (e) Miscellaneous Overheads like - Rent and rates, depreciation insurance premium, etc. The sale of meals and subsidy is the source of revenue for the canteen. Usually coupons of different colours are issued to workers, according to the type of meal provided. The receipts from running a canteen include company subsidy and sale from provisions. A proper budget should be prepared starting from the volume of the services to be rendered. Since the production of the canteen is mostly perishable, care should be taken to avoid excess waste or supply as much as possible. CANTEEN COST STATEMENT NO. OF MAIN MEALS SERVED NO. OF SNACKS SERVED NO. OF TEA SERVED PARTICULARS ACTUAL BUDGET FOR THE MONTH CUMMULATIVE FOR THE MONTH CUMMULATIVE A) Wages and salaries
Supervision Cooks Canteen Manager Kitchen Assistant SUB TOTAL
PARTICULARS ACTUAL BUDGET FOR THE MONTH CUMMULATIVE FOR THE MONTH CUMMULATIVE B) Provision Meat Fish Eggs Vegetables Rice Butter Vegetable oil Bread and cakes Fruits Biscuits Milk Tea and Coffee Sugar Soft Drinks Grocery SUB TOTAL C) Consumable Table line Cutlery Glassware Crockery Cleaning material Dustbins D) Services Gas Power Electricity Water E) Miscellaneous O/H
Rent and rates Depreciation Insurance Maintenance SUB TOTAL F) Total cost G) Deduct income from sales Subsidy by company H) Surplus / Deficit Mostly the canteens are subsidized i.e all costs are not borne by the workers. For this reason from the total cost, subsidy and sale of coupon is deducted to arrive at the profit or loss of the canteen. It is difficult to give format of the Canteen cost sheet which will hold good in all circumstances. The required format should be developed based on the specimen format given above. Some times it is required to calculate the increment in subsidy per head to be provided by the company this month over that in the same month last year. For this purpose, monthly statement of canteen cost may be prepared in the following forms: MONTHLY STATEMENT OF CANTEEN COST Particulars This Month This month last year Materials consumed Labour and Supervision Overheads Total Rs. Less : sales by Coupon Subsidy for the period (a)
Number of employees served (b) Cost per employee (a+ b)
Cost accounting with the objects of fixing prices for main meal, snacks, tea etc. is difficult to organize because it requires equating one type of food with another so that a common denominator can be obtained to determine the average cost per meal. However, if such a common denominator cannot be ascertained, costs may be expressed in terms of per employee to facilitate control. Though, it is difficult to calculate the cost per meal the canteen supervisor with his experience can estimate the cost involved for each type of meal provided. The canteen supervisor should have the knowledge and judgment about the number of meals that can be served with various combinations of meat, fish and vegetables and how many cups of tea can be provided with certain quantity of tea leaves and certain litres of milk. Thus the entire decision making is mostly left upto the canteen supervisor who mostly handles situation single handedly. It is necessary for the canteen supervisor to estimate correctly the number of meals required each day. Wastage must be avoided to control the costs. The personnel manager and the canteen supervisor should examine the waste food bins from time to time. This is to ensure that food is not wasted. Moving average charts for the main heading of expenses and income received from various type of meals helps to keep a watch on trends. A moving average charts can be prepared as below. THREE MONTHLY MOVING AVERAGE CHARTS FOR CONSUMPTION OF VEGETABLE OIL Month Date 3 Months Moving Total 3 Months Moving average January 150 - - February 135 425 141.67 March 140 413 137.67 April 138 420 140.00 May 142 420 140.00 June 140 423 141.00 July 141 418 139.33 August 137 416 138.67 September 138 420 140.00 October 145 426 142.00 November 143 427 142.33 December 139 - -
Note : The first figure against February in the 3 rd column is the total of data for January, February and March. The three months moving total for March is obtained by discarding data for January and adding data for April. Each time while calculating a moving total, the data is discarded for the 1 st of the previous 3 months and data for the month which is next to the last of the previous 3 months. The moving total and the moving average are placed at the center of the time span from which they are computed. The total data of January, February and March is placed against February. EXAMPLE The industrial canteen in an industrial unit is run for the benefits of its workmen and provides necessary subsidy to the canteen. During the month of August 2000 the following purchases were made. Commodity Quantity Rs. Rate (Rs.) Per. Kg. 1. Tea 4 160 2. Sugar 50 30 3.Milk 60 25 4.Atta 210 20 5.Flour 20 30 6.Vegetable Ghee 3 110 7. Besan 12 40 8. Dal 30 38 9. Potato 90 20 10. Green vegetable 20 15 11.Spices 2 150 The other expenses for the month were : Rickshaw fare Rs. 200, Salary to cook (1) Rs. 2500 per month, Wages to waiters, (2) Rs. 1500 per month each, Supervisors Salary Rs. 3000 per month. Fuel, Gas, Coal etc. Rs. 4000, Miscellaneous expenses-crockery and glassware Rs. 1000. Depreciation of Utensils and Furniture Rs. 500, Sale of coupons @ Re. 0.15 per coupon.
Prepare Trading and Profit and Loss Account of the Canteen for the month of August 2000 and find out the amount of subsidy paid by the company. Tea Sugar Atta Opening Balance 2 kg 10kg 30kg Closing Balance 1kg 5kg 20kg
Solution :
Canteen subsidy during the month of August 00. Rs. Rs. Net Loss 5290 Subsidiary given by company 15290 Establishment Expenses 5500 (Salary, wages ) Overheads 1500 Staff Overheads 3000 Total 15290 15290 TRADING AND PROFIT AND LOSS A/C FOR THE MONTH OF AUGUST 2000
Rs. Rs. To Opening Stock By Sales 7,800 @ Rs.2.15 16770 Tea 2 kg x 160per kg 320 Closing Stock Sugar 10 kg x 30 per kg 300 Tea 1x 160 = 160 Atta 30 kg x 20 per kg 600 Sugar 5x30 = 150 To Purchases : Atta 20 x 24 = 480 790 Tea 4 x 160 640 Sugar 50 x 30 1500 Milk 60 x 20 1200 Atta 210 x 20 4200 Flour 20 x 30 600 Vegetable 3 x 20 60 Besan 21 x 40 840 Dal 30 x 38 1140 Potato 90 x 16 1440 Green Veg. 17 x 20 340 Spices 2 x240 480 Fuel, Gas, Coal etc. 4000 By Net Profit / Loss - Rickshaw fare 200 17560 17560
3-5-1 Management Procedures : Supervision, Monitoring, Controlling Major policies are conceived and planned at the higher management and then each policy decision passes through different channels and processes to the person that is at the level of executing the decisions. In a catering establishment, decisions as well as guidelines for performance of process activities and operations need to be passed from level to level downwards to carry out the scheduled operations and the programme of production. It is therefore essential to see that the management procedures in the establishment have a suitable network for efficient supervision, effective-monitoring and competent controlling mechanism well established for these purposes. The traditional concept of supervision has undergone many charges. The method of supervision was mainly the spot visit. It was generally a fault finding mission in majority of the cases. At present supervision through the spot visit is not just an occasion for fault finding but an opportunity to take stock of the situation on the whole and to advise and guide those concerned with the operation. In the industrial canteens the supervisory authorities have to carry on the tasks of supervision. At the higher level of management the decision making procedure is carried out by the management. On account of this, the top level management is the supervisory authority. There is no direct supervision but the powers of supervision are delegated to the canteen committee. The canteen committee on its part delegates this supervisory authority to the canteen manager or the canteen contractor or the proprietor as the case may be. The canteen manager visits the spot concerned either in the store or in the kitchen or the service area as often as it is convenient for him, considering the nature and the size of the catering establishment under his charge. The supervision of service is entrusted by the managers to the steward or the captain and then to the waiters. The supervision over the maid servants, cleaners and waiters is carried out by the steward or the canteen manager depending on the size of the industrial canteen. The store keeper is under the charge of the canteen manager and the store keeper concerned will supervise the functioning of the helpers, the cleaners and the maid servants, if such a need arises. The canteen manager has to supervise the operations carried out by the cooks. The supervision task is closely related with the monitoring of the operations in the functioning of the industrial canteens. A periodic monthly or quarterly stock taking is necessary to monitor the store of the industrial canteens. To ensure proper execution of the processes in food production and catering operations it is essential to monitor the operations in the field. This monitoring process initiates the necessary corrective measures at appropriate time and at appropriate level. Monitoring helps to keep a watch on achievement of targets and appraise the execution of the plans set in the light of actual experience. Field visits, meetings, and mutual discussions are the methods used for monitoring and those who have the supervisory authority will carry out the task of monitoring in the managerial procedures of the canteen management. Controlling is the process that measures current performance and guides them towards some predetermined objectives. The controlling is essential for the effective implementation of plan. Controlling is linked with planning. It is the process of comparison of actual with the standard set. Controlling has to maintain a balance between activities and operations and the set of goals set for the various operations of the canteen management. Controlling is a means to plan policies, programmes, and schedules of planning. Planning should precede controlling. Planning without control is meaningless and controlling without planning is blind. Thus good planning can bring concrete results through controlling. The significance of supervision, monitoring, and controlling in the catering operations needs to be emphasized as these management procedures help executing the catering operations. 3-5-2 Management procedures Directing, Communicating, Reporting The management procedures include directing which is that function that initiates actual performance of tasks and requires greater interactions between people through communicating and reporting. Directing includes instructing, guiding, teaching, and reviewing. Instruction must ensure that each member understands how his work fits into the total scheme of work to be achieved. Direction is the guidance, the inspiration, the leadership of these men and women that constitute the real core of the responsibilities of management. The task of directing people involves guiding them in their jobs. Clearly, standing too close to be an employee or interfering with jobs is to be avoided. Instead of watching people, by viewing their work positively, the performance can be supervised to see how the work is being done. Teaching people to organize work will make the work less stressful and better in performance and using quicker methods will create a more relaxed atmosphere. Co-ordinating and evaluating the operations is a part of directing the organization. To get the work done by the subordinates to achieve desired results in a stipulated span of time is an important task. Getting the work done by a person depends on whether he is motivated to do that work or not. Motive makes a person active in a particular way. Motive is an inner impulse causing a person to act Motivation refers to the way in which urges, drives, desires, aspirations, striving, or needs direct control or explain the behaviour of human beings. The fine balance of both the types of positive motivation and negative motivation is the core of management. Directing involves leadership traits in the supervisory authority. The process of leading depends on the elements such as possessing separate identity, being rooted in feeling and attitudes in everevolving dynamic process and involving influence, direction and guidance. Co- ordination is the combination of all efforts used in an enterprise for obtaining objectives that are common in nature. Constant co- ordination helps to tackle problems when they arise, gather ideas from various experiences, anticipate problems and take timely action to prevent them from recurring, Co-ordination, leadership and motivation enhance the efficiency of directing the effective implementation of the sequence of operations to be carried out in the canteen. All plans chalked out for the establishment to run smoothly will come to nothing, if they cannot be interpreted and understood by the people who have to carry them out.The ability to carry information or messages to others is known as communication. It is an important tool of management when dealing with people. Yet it is the most difficult to achieve effectively. In the catering establishment, communicating is central to unifying all the different activities which interplay in the achievement of goals. Communication is a two way process and is completed when there is the same response from the receiver of the information which the sender desires to communicate. The types of communication on the basis of expression are verbal, non- verbal, written, formal and informal communication. Oral directions, instructions and commands, written letters, memos, notices, body gestures, facial expressions and even silence are used to communicate messages from one end to another. The types of communication on the basis of direction are upward communication, downword communication and horizontal communication. The barriers of communication are uncertainty, fear complex, cultural background, education and certain other causes and these need to be removed and break down in communication needs to be avoided. The establishment of an effective communication system is essential for every organization. The Reporting system is aimed at providing necessary feed back about the status of activities and operations to the supervisory authorities. Such feed back enables the authorities to keep a watch over the execution of plans and ensures necessary remedial measures to be taken to achieve the targets allotted. The lower level staff will report orally to the middle level management. The waiters will report to the steward or the head waiter. The utility staff will report to the head amongst them. The manager will seek reports from the store, the kitchen and the service area. The upward reporting will enable the manager to instruct as required. The manager in his turn will have to report to the upper level management. The submission of written reports to the canteen committee or management will have to be carried out in the periodic sequence. The submission of accounts is reporting on the financial front and is to be carried out as stipulated in the policy framework of the catering establishment. Reporting is the task crucial in management but equally crucial is the fact of who reports to whom. The managerial procedures involve Supervision, Monitoring, Controlling, Directing, Communicating and Reporting. These procedures need binding together which is provided by the co- ordination of these management procedures. The same can be presented through a figure as shown below
SUPERVISION
Management
MONITORING Middle Level Management DIRECTING
CO- ORDINATION
COMMUNICATING Lower Level Management CONTROLLING
REPORTING
MANGEMENT PROCEDURES IN AN INDUSTRIAL CANTEEN
3-5-3 Management Structure of Industrial Canteens The management structure is the out come of putting people and jobs together and therefore represents the entire team involved in the running of the establishment both at the operational and management levels. Any organization needs a well set detailed structure, having functions logically arranged to achieve maximum efficiency. The two types of authority relationships that most often exist in food services are line and line staff relationships. In the line structure each individual is responsible to the person ranking above him on the structural pattern. Thus authority and responsibility are passed downward. In the line and staff pattern, specialists are positioned at various levels to advise those along the line structure as the activities of the establishment get diversified. The expertise of staff is utilized to maximize the efficiency of line personnel to the utmost. Organizational management structures can grow in two directions vertically and horizontally. In vertical structural pattern the person above assigns the work to his immediate subordinates down the line. In small catering establishments and industrial canteens run for a limited number of employees, the vertical management structural pattern is noticed. As the length of the vertical structural pattern increases, the functional units begin to operate separately. The activities of the establishment grow in size and volume. The structural pattern then spreads out to become a horizontally spread structure. The structural patterns also indicate the functional units and the interlinked relationships amongst them. The structural patterns indicate whether authority is centralized or decentralized. The structural patterns can also be termed as tall or flat patterns of management structure. The management structural patterns are line or vertical or tall structures and line and staff or horizontal or flat structures. These structural patterns of the management organizations can also be termed as ladder and pyramid structural patterns in which the ladder vertical, tall, and line patterns present one group and the pyramid horizontal, flat, and line and staff structural patterns of management organization present the other group. The small industrial canteens which serve up to 150 employees are ladder type while those canteens that serve more than 150 employees are of the pyramid structural pattern of management organization. The same cam be graphically presented.