T he School District of Philadelphia, (SDP) is the nation’s ninth largest school district encompassing 250 schools with enrollment of approximately 180,000. The Food Service Division has a staff of 1,100 with an annual budget over $80 million. The division serves over 100,000 lunches and 60,000 breakfasts each day. SDP is unique in that over eighty percent (80%) of the district’s students are eligible for free or reduced-price meals. Because of this high percentage, all of the students in 230 of SDP’s schools eat breakfast and lunch at no cost.

The Problem

The Food Service Division was experiencing negative financial results. The major reason was the escalating cost of labor and food. SDP’s other major concern was the continued erosion of satisfaction with the food service deliverables. While not uncommon in school food service operations, this was an encroaching concern that needed redress.

Seeking professional assistance to evaluate the food service operation and make recommendations for improvement, SDP sought consulting help. The two major objectives for this process were: 1) to assess and provide recommendations that would make the food service operation financially sound and self-supportive; 2) to assess and provide recommendations that would improve the effectiveness of the food service operation . . . in effect to improve satisfaction with the program. Related objectives were to improve the human resource, nutrition, and marketing programs. These recommendations were to include both internal and external implementation strategies.

The Solution

The Portolan Group, Inc., (PGI) was selected to conduct the assessment of SDP’s food service division. The assessment involved data collection, site visitations, interviews and on and off-site analysis of data. Keys to strategic improvement involved providing financial models and performance benchmarks. Strategies for improvement were classified into the following major areas of responsibility: Management, Finance, Human Resources, Nutrition and Culture.

Recommendations included acquiring a MIS/IT system as quickly as possible. The district did not have either a “back of the house” or “front of the house” software package. Most of the schools did not have the necessary computer hardware.

As a result of not having a MIS/IT system, the division did not have appropriate statistics at hand to make real-time decisions to affect needed improvements. The division needed these monthly reporting protocols to indicate how each school was performing. These performance metrics are used to determine how division management assets should be allocated. Some of the more important key statistics are MPLH- meals per labor hour; CPM – cost per meal; ADP – average daily participation percentages and financial P/L reports by school, category and division. The division needed to better utilize the meals per labor hour statistic to monitor and modify staffing in the full service schools. These statistics are crucial in assessing major assets and costs to the nutrition program.

We emphasized the need for the division to become a standards-driven organization that focuses all of its resources on measurable targets and goals. We recommended the process to acquire a MIS/IT system, the timeframe and the overall cost.

From a financial standpoint, PGI recommended the division divide the budget of operations into two sub-budgets: 1) “full service” schools and 2) “satellite schools.” The primary reason was the full service schools were under-performing and not able to achieve a break-even financial status. The division of these budgets allows management to set goals and monitor them with strategies for improvement. Other strategies included plans to increase participation in the full service cafeterias from 64.8% to 74.6%. This increase was necessary to prevent a negative financial result.

We recommended an updated marketing program. Specific marketing strategies were recommended for the secondary schools. The marketing function set its sites on meeting strategic goals of increased participation, (ADP) and an improved customer satisfaction rating.

The Results

“The Portolan Group has helped us clarify those strategies that we need to pursue to stay in the lead of ‘fiscal responsibility’ and ‘performance efficiency’ for our food service division,” says Wayne Grasela, Food Service Director. The SDP Food Service Division is following strategies that will result in an improved financial status for the food service budget. As a result of the study, the district is instituting management realignment, new procurement practices, marketing programs and new technology systems. Satisfaction with the food services deliverables is also targeted. Key performance indicators (KPI) are being instituted to provide benchmarks for the management team to achieve.

One of the most significant improvements is the acquisition of a comprehensive MIS/IT system. The food division now has key performance indicators to measure their performance. They can now better strategize plans to improve selected goals throughout all cafeterias.

The marketing program has produced much better results in providing a variety of offerings, especially in the secondary schools. Also, the food division is now working closely with the instructional division to provide better education about the importance of good nutrition to improved student achievement. Many schools are offering an expanded breakfast program to ensure students get the energy they need to have a chance at academic success.