1. LEAN & GREEN OPERATIONS in local restaurants A Survey of Lean and Green Practices in the Restaurant Industry in Northeastern Pennsylvania Jennifer J. Edmonds, PhD Associate Professor, Statistics & Operations Management Wilkes University Wilkes-Barre, Pennsylvania Presented at POMS 2011 in Reno, Nevada

2. LEAN & GREEN OPERATIONS in local restaurants Background on Lean & Green What this means for Restaurants Project Scope Luzerne County Restaurants Lean & Green Practices Summary Current & Future Research

3. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. LEAN GREEN

4. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. LEAN A systematic approach to identifying and eliminating waste through continuous process improvements in the pursuit of customer satisfaction Defects Overproduction Waiting Not Utilizing Employees (People Waste) Transportation Excess Processing Motion Waste Space

5. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. LEAN A systematic approach to identifying and eliminating waste through continuous process improvements in the pursuit of customer satisfaction

6. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. GREEN Reduce, Reuse, Recycle Wise Consumption Consistent Process Tracking

7. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. …is lean green? (Cooper, 2009) LEAN GREEN High tech Regulations Low tech Fundamental Respect of people

8. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. However, very few empirical studies highlight the prevalence of such practices in the restaurant industry. (Greathouse, 2010) ‘Pays to be Green’ Empirical Research Expenditures on pollution control are positively correlated with financial performance in pulp and paper firms (Spicer, 1978) Positive link between environmental and financial performance in manufacturing firms (King & Lennox, 2001) …and future cost savings (Porter & van derLinde, 1995) Positive relationship between environmental and financial performance for scrap steel yards (Clemens, 2006)

9. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. However, very few empirical studies highlight the prevalence of such practices in the restaurant industry. (Greathouse, 2010) Speed Waste Adequate staff, Necessary items where needed, Implementation of some ‘S’s’ Overproduction, Production defects, Intelligent use of resources, Waste management & recycling

10. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. However, very few studies highlight the prevalence of such practices in the restaurant industry. The purpose of this study is to highlight lean and green programs' implementation observed within smaller organizations in the restaurant industry of Northeastern Pennsylvania. Why small businesses? an excellent opportunity to conduct system-wide research large numbers of homogenous firms (Rigg & Bracker, 1986) Hold a relatively small share of the market, Fewer than 500 employees Small businesses report 20-30% cost savings by making energy saving moves…. Byron Kennard Center for Small Business and the Environment USA Today, December 2007

11. LEAN & GREEN OPERATIONS in local restaurants Numerous studies address the importance and relevance of the development and implementation of a sustainable operations program. However, very few studies highlight the prevalence of such practices in the restaurant industry. The purpose of this study is to highlight lean and green programs' implementation observed within smaller organizations in the restaurant industry of Northeastern Pennsylvania. 650+ Restaurants in Luzerne County Made available by the Wilkes-Barre Small Business Development Center (via Dun & Bradstreet, Sept. 2010)

13. Not including national chains, fast food outlets, under-represented or drinking-dominated establishments Annual Sales Smaller Organizations in the Restaurant Industry Italians are the 2nd largest immigrant group in Luzerne County 290 Restaurants in Luzerne County

14. LEAN & GREEN OPERATIONS in local restaurants This study focused on the prevalence of the sustainable behaviors. Specifically, this study examines basic awareness, recycling efforts, energy utilization, maintenance, waste and general operations information. The questionnaire was developed with undergraduate students in the Sidhu School of Business & Leadership at Wilkes University. Data was collected from the targeted restaurants using on-site interviews in Dec. 2010 – Jan. 2011 and March – April 2011.

15. Demographics ~80% Family Owned Between 1-5 employees (None > 60) Annual sales levels less than $200,000 Businesses started between 1939-2010 Most since 1980 Restaurants in Luzerne County 59 Restaurants in Luzerne County

16. LEAN & GREEN OPERATIONS in local restaurants This study focused on the prevalence of the sustainable behaviors. Specifically, this study examines basic awareness, recycling efforts, energy utilization, maintenance, waste and general operations information. Newer and larger establishments are more progressive. More aware, more interested, actively practicing lean and green

17. Awareness & Interest GREEN Everyone is knowledgeable and interested LEAN Fewer are knowledgeable, but interest level is promising Age has no impact on awareness or interest (p > 0.60) Size has no impact on awareness (p > 0.60) …but larger restaurants are less interested in green (R2 = 0.129, p = 0.005)

18. Speed Adequate staff, Necessary items where needed, Implementation of the ‘S’s Job rotation to ensure worker flexibility Only hire motivated and high energy people Decrease response time by making sure all products are readily available and within reach. Assign certain locations for employees to be doing their work Regularly checking that everyone knows their designated roles for the day Keep kitchen free of debris Workers are to clean up their working space on a consistent schedule Process-focused layout Kitchen area organized by station, Dine-in food prep separate from carry out food-prep Most restaurants already institute the ‘S’s

19. Waste Overproduction, Production defects, Intelligent use of utilities and equipment, Recycling Overproduction occurs the most often with home-made condiments, sides and sauces 78% have no plan in place to reduce waste Neither age nor size has an impact on waste planning (p > 0.80)

20. Waste Overproduction, Production defects, Intelligent use of resources, Recycling Dine-in beverage practices foster waste. Dine-in serving practices foster reuse.

22. None of the restaurants use motion activated plumbing heads.

23. 23%use energy efficient light bulbs

24. 10% use smart (motion activated) lighting or motion sensorsIn bathrooms or outside 25%use Energy Star rated equipment Neither age nor size has an impact … (p > 0.25) Youth has a positive impact on NOT using the dishwasher (with minimal items) (R2 = 0.29, p = 0.003)

25. Waste Overproduction, Production defects, Intelligent use of resources, Recycling 63% currently recycle Not even 1/3of these 37 provide recycling bins for their dine-in customers. Neither age nor size has an impact on recycling habits. (p > 0.80) Those that don’t recycle don’t have local support. 20% of restaurants purchase paper/plastic goods made from recycled materials

26. Waste Overproduction, Production defects, Intelligent use of resources, Recycling Restaurants still use Styrofoam! …but only one restaurant recycles their Styrofoam! Neither age nor size has an impact on Styrofoam usage. (p > 0.25)

27. 36% want to receive the results of the survey Summary Neither age nor size has an impact on interest in feedback (p > 0.50) Newer and larger establishments are more progressive. Awareness Interest* Reduce* Reuse Recycle 5S’s Waste Planning Support of local growers is common, but interest in the sustainable practices of suppliers is low. Recycling is popular – paper and plastic or glass are recycled the most often. …but letting patrons recycle is not common. Most restaurants already implement the 5S’s Most restaurants have no plan for waste reduction.

29. Measuring wasted inventory, time, spaceData collection Chains International Neighboring counties