Planning Ahead: Busy times call for operational excellence
In the cinema industry, attendance dictates our operational processes above all other factors. This is true for food and beverage offerings and must be our driving force for planning. When attendance is slow, we must adjust employee hours, inventory turns, and product deliveries, as a few examples. And when attendance is high, we must address the same issues! So when we have two weekends back to back which bring in $200 million-plus in box office and record-breaking attendance, we have to focus. I want to zero in on three things: inventory management, supplier communication, and manufacturer forecasting.
Inventory management is important at all times. It is not my intent to assume otherwise. However, when the hum and shake at a theatre rise to a fever pitch with sold-out showings of films and lobbies full of people, anything less than great inventory management will be a detriment to concession sales. We are faced with inventory turns, shortages, breakage and mistakes because we are forced to move at a faster pace and higher volume. Planning cannot be overlooked as the main priority for readiness. Staffing specifically to help the movement of inventory, order, and restock in particular can make a big difference to help the efficiency level. Routing additional staff to product count and management has a direct effect on concession sales. You don’t have to pull cashiers to manage inventory, they can continue to serve the customer.
Planning for inventory success and failure with backup plans for product outage and/or equipment failure can save a weekend. Freeing additional space to stock increased inventory and varied inventory is important. Being prepared with alternative menu items and crossover messaging is now easier with digital menu boards and POS systems. Having staff be prepared for suggested ordering when other items are out of stock, and even discounting them, can save you from a completely lost sale.
Supplier communication is a large part of being prepared. Making sure that your food and beverage distributors are as ready for the onslaught as you are is critical. This communication moves in three directions, between buyers, suppliers and manufacturers. The cross-communication is necessary for all parties to understand lead times, ship times, overnight restrictions and delivery schedules. When theatres get hit by a huge weekend, the move to panic and chaos is swift. Theatres are out of stock, suppliers are out of stock, theatres are too busy to even place orders on time. Communication between all parties must be heightened. Otherwise, you have Kevin Bacon from Animal House on the street screaming, “All is well, remain calm” and not a single soul is listening.
Communication always returns to forecasting inventory and production levels. For commodity items, it can be extremely difficult to go beyond or below contracted quantities. But for manufacturing lines, this is equally challenging when our products are such highly branded items, and share space and time in the retail world. We like to think we can make a manufacturer stop, produce more for us on demand, and move on down the road. But we don’t get to override the needs of Walmart or Target as easily as we might think.
Manufacturer forecasting is tricky in our industry. Film expectations are far from an exact science. But it’s reasonably sound and there are many industry forecasts that can be the guide. The release schedule and box-office predictions must be taken into consideration along with the prior year’s movement. The box-office weekend for the Jurassic World opening was 77% higher than the same weekend in 2014. Prior-year movement is incapable of predicting that. So our forecasting must begin well before the movie is actually released. Forecasting must be considered with all parties together for the constraints of each to be considered.
Forecasting is a methodology that is by definition evidence-based. Our evidence is prior-year movement, current product-mix movement, manufacturer lead times and commitments, commodity contracting, and contingency planning. Film-release trending has gotten better and better over the last decade and our ability to predict opening weekends has improved. This must drive our forecasting along with our manufacturers’ willingness to be flexible during our peak seasons. That speaks to picking the right partners, and is another article for a later day.
The rest of 2015 looks extremely promising and these topics will need to remain a big part of our focus in order to provide excellent customer service to our patrons. We have an opportunity to truly capitalize on a great year of film product. Planning, communicating and forecasting are critical to making this happen. Hopefully, we will be tasked with this challenge and work together with our partners to deliver excellence.