How to replace the restaurant director with a robot?
Few people thought about how pizza is cooked in a restaurant, and even using new technologies. But one company uses a lot of interesting things: there are metrics, and tracking customer activity, and automatic distribution of tasks. Personally, I will order a pizza for myself and will gladly watch this interview with the creator of the Russian pizza chain Fyodor Ovchinnikov. Join now!
Dmitry Zavalishin is a Russian programmer, author of the concept of OS Phantom, organizer and member of the OS Day conference program committee, founder of the DZ Systems group of companies. In 1990–2000 he took an active part in the creation of the Russian segments of the Internet (Relcom) and Fidonet, in particular, ensured the transparent interaction of these networks. In 2000-2004, he was responsible for the design, development and development of the Yandex company portal, created the Yandex.Guru service (hereinafter Yandex.Market). You can read more on the Wiki .
Fedor Ovchinnikov - the founder and general director of "Dodo Pizza" - an international network of pizzerias, developed through a network of franchisees. Business success relies on the automation of each operation and quality control through technology. That is how a pizzeria from Syktyvkar for 6 years has become known throughout the CIS and abroad.
Interview
Dodo Pizza is the most amazing company I've ever seen and heard.It amazes me not even that she is successful, not even that she has gone beyond the borders of the Russian Federation, but that you seem to have done exactly what you intended.You were planning to make exactly such a company, it was you who made it, and it was she who turned out to be successful!Is it true?
Yes, you can say that it is. But we are far from achieving what we are striving for, just the beginning of the road. Even our management company has not yet made a profit. The network is growing and quite successfully in Russia, and in many other markets.
You did not make a profit in the sense that you did not recapture the investment?
No, we invest purposefully. That is, there was a period last year when we were in profit. Our management company that develops the franchise, the information system, which is the main value of the franchise. And then we just turned on the switch of costs: we moved the office to Moscow and purposefully went into a manageable loss.
We have not yet begun to bring dividends or profits to investors. Therefore, we can say that our mission has just begun.
Our interview series is dedicated to digital transformation, and the most interesting part for me is how IT changed the traditional business, and changed it so that a return is no longer possible.Do I understand correctly that the IT component is key in the company and it is impossible to compete with you without comparable automation?
Of course. Our big idea is to change the mass catering (network) market using the capabilities of information technology and the Internet. Of course, we just started creating these advantages and what awaits us in the future, when the network will consist of hundreds, of thousands of pizzerias. The advantages that we are now laying, creating our platform, will be very serious. It will be very hard to compete with us.
And today means still possible?
Sure you may.
We ourselves believed in this idea, we made investors believe in this idea. And all the main advantages, of course, are still ahead.
Creating your platform in very limited resources is quite difficult. Let's say that we are currently restructuring our information system, because the business has grown very quickly, and we need to change the system architecture, because it does not withstand such loads, because it was created for two or three pizzerias, in fact. Therefore, we still need to go this long way.
“Dodo Pizza” was successful because you are good IT people, because you have built a good IT component?Or are you just great businessmen?
I think that we are good businessmen who have convinced investors that our history is long-term. We have invested in creating our own platform, which in the future will provide competitive advantages that will allow us to develop in the world.
Our product is a mass market - this is pizza. Pizza is popular in any country of the world: in the USA, in Brazil, in China, Vietnam. People know what pizza is. Therefore, having made a cool product, we can further scale the business. And then our IT component will play a major role!
In general, what gives IT in our business? Actually, our product is more than pizza, it is a kind of consumer experience that people get in a pizzeria: it is the stability of quality, service, delivery services, it is such a whole infrastructure. And our idea is that by creating an IT platform to control all of this infrastructure, starting from detailed processes in the kitchen for the speed of preparation of each product (for the speed of cutting tomatoes, by the reaction of the client), we can manage this business better than our competitors .
In fact, we have two differences from competitors: the first is that we do everything via the Internet. We can very easily connect various devices with Internet access, easily change this system, develop it, because it can be updated every minute. And the second is the combination of competencies, as we call it. That is, this is the ideal system for a particular business. Imagine, now we control in general everything that happens in the network business, starting from how happy the employees are, for example, in Kazakhstan. We can correlate this data online with employee turnover.
Can you correlate?
Correlated, of course. But much of what we have done is just lying. For example, we can predict sales, but we are not doing this yet, unfortunately. And what are we already doing? We compare the detailed metrics of all pizzerias, and they get feedback all the time. Each of them connects to a certain platform that allows you to comprehensively see and manage your entire business.
In essence, you are now saying that using the right IT infrastructure, you have provided very detailed monitoring of your current business.And due to this monitoring, are you able to quickly control quality and optimize it?
That's right. And to increase production efficiency, that is, to obtain greater profits. In principle, again, what is the essence of McDonald's business? They created a model that is then replicated by entrepreneurs through franchising.
I just wanted to ask: how much were you inspired by McDonald's replicability?
Any company in the public catering develops franchising. McDonald's in this regard is not the best example, they have more than 80% of restaurants owned by franchisees. There are companies in which 100% of restaurants owned by franchisees, for example, Subway. They do not have a single restaurant that belongs to the owner of the company.
Frankly, they and the quality is so-so.
But at the same time the model works. What is McDonald's business? They created a model, transferred it to the entrepreneur who manages it. And then they control that this model works as intended. And they do it with the help of traditional management: control, checks, standards.
What are we doing? We impose some sensors on all processes, connect clients, couriers and see all this online. In fact, I think that any retail business where there are some typical services will follow our path.
In preparation for the interview, I talked with colleagues in the company, and we had some controversy: we roughly assumed that, in fact, you built a very good ERP, which really controls the processes in detail.And then my colleagues suggested that this system can be easily transferred to another business.But it seems to me that the depth of understanding of a particular enterprise is large enough, and the system you have done, of course, is tied to this business.
Of course. And this is the most common question: why don't you start selling this system to the side? But there’s a different paradigm: our product is not a system, our product is a franchise, the core of which is this web service. In fact, we are a grocery company, we are not SAP, which creates a flexible solution.
You are not a software company, you, after all, a pizzeria.
Of course, we are a grocery company that, using the Internet and IT, is trying to improve consumer experience. And the effectiveness of business control is also improved.
How much does your business process differ from typical ones?You probably know the typical processes in the industry.
I think that, in general, it is almost the same, but in the details ... As the saying goes, "the devil is in the details." We have a lot of things just more convenient, better optimized.
Let me give you an example: in our country all the numbers are transparent to all the participants in the network. In fact, all you have to do is make a number transparent and show it to people, and immediately it starts to improve. With us, for example, all pizzerias see their own and other performance at any given time and can compare them. As soon as you see that labor productivity is somewhere twice as high, you immediately begin to improve your business. That is, pizzerias are competing.
Have you implemented the most notorious capitalist competition?
Of course, it works everywhere. There are a huge number of metrics. We all try to measure, even the quality: we have a rating based on secret checks and customers. And we do not see any secret buyer, we practically were not in our pizzerias (oddly enough).
How many pizzerias do you have now?
227.
How many countries?
In nine countries. Most points in Russia and Kazakhstan. That is, in Kazakhstan, we also have a fairly good position.
As for the visionary. Here is the concept of "smart home". We make a “smart pizzeria” where everything is interconnected: the system sees that there are too many people in a shift, the productivity is low. It automatically begins to create an offer, this is dynamic pricing, offer discounts and send them to people who have subscribed to, say, receiving offers at a low price.
Do you load production when you have a load failure?
Yes, and this is done automatically. Neither the franchisee nor the manager need to control this. Thus, at least we recoup the labor during these hours and the average productivity by the day for these hours just grows.
Or, let's say, the system sees that there are no orders now, but there are personnel. And she starts to throw some tasks that, for example, need to be done once a month (wash the ventilation, for example). Business consists of such trifles: wash the ventilation, do something, and there can be a lot of such things. When all this is combined into one system, everything is controlled, then the average level of efficiency and quality over the network grows, and we get a very powerful competitive advantage.
And if we talk about marketing.There is a figure that you only 5% of customers get from the online channel.
I can not say for sure these figures are different by region. But in fact, we are not strong enough in digital marketing right now. We have never done this before.
We purposefully, as we were limited in resources, did not invest in digital, because we didn’t want to be scattered. But we learned to work very well offline. But now we are going there, as one of our competitors is, by the way, aggregators, classic Internet companies. Their main competence is to attract customers online.
Was it cheaper to go offline?
We are now cheaper offline.
This is today, when 2017 is the year when everyone shouts that online is much more profitable and effective?
In fact, an interesting situation has occurred: online is now such a bloody ocean, where any company that has some budgets can come and it is very easy to reach the consumer. There are very transparent controlled instruments, everything is measured, anyone can do this, a huge number of players. And while there is offline, where it is very difficult to control everything. If you even want to distribute flyers on the street, it is very difficult to control: you think that your promoters distribute them, but in fact no one distributes them.
In the trash put, and everything.
Of course. And therefore, when we go offline, there is no competition. And if you provide quality management, we get a very high conversion. And now, customers brought offline are much cheaper for us than online.
Tell us about working in foreign markets: why, for example, China wants everything, but not everyone has succeeded.
I will not say what happened with us - in 5-10 years we can say. Companies enter different markets in different ways. American companies tend to come from above: they come and eat the market. That is, we have a model that works in the United States, and we will promote it. Under the model, I do not even understand the business model, but the external part (pizza, design, some service items, and so on). That is, all of the details consists. They come and say: “We will teach you. This is ours, we will not change anything. ”
We act differently. We come from below, we come to the Chinese market and act like the Chinese. We copy what works in China, take our model, take the menu that works in China. We open, we start to work and look. This point is a beta version of the product. We begin to look at what works, what does not work, what repeat orders, what feedback, what turns out, what does not work and begin to improve little by little. Then our task is to create some model that works, open the second point, test it. And then we’re talking about this model, it works, it is profitable, and we’re starting to look for entrepreneurs who will replicate this model.
That is, you still open not with franchising, but yourself?
We opened in China with franchisees, but we immediately told them: you will work as if we are one company.
They were not ready, can not, or you did not want to risk?
This does not work. This is a great success so that the franchisee himself is able to develop a product, a model.
However, when we talk about your optimization cycle, it comes up against this very franchisee. That is, it is some director of a particular point who looks at the metrics and makes management decisions in order to improve the quality of work?
But the system tells him a lot, plus we can install triggers that simply will not allow it to work poorly somewhere.
And what is the tracking model for this?Here you have launched a certain point, showed several arrows to the employees and said: look, if this arrow falls here, then go and curse such an employee, or help him to do this and that, improve this situation.Then they do it for some time, and then you find out that the arrow is still falling.Who is finding out?How does she find out?What are you doing about it?Whole next control loop is top of it?
Our model is very logical, it is very easy to diagnose where the problems are. We give all the metrics so that an online partner can see and compare everything with others. And then - the rescue of the drowning - the handiwork of the drowning.
So you do not climb?
We will not be a partner to solve his problems. The partner is an entrepreneur and he gets a working model. He himself is motivated to make a profit, but we do not allow him to work poorly for clients. If he does not make a profit, this is his problem. But if he starts to give bad quality, then here we can close the pizzeria.
Here you have such a single instrument of influence: to close the pizzeria?Should there be any tools up to this point?
Of course, the diagnosis. A huge toolkit with experience, how to solve problems, training. In other words, our task, our product, our system, is to maintain a state when all partners work as efficiently as possible and their revenue grows. Therefore, of course, we are constantly working to ensure that partners increase their effectiveness. But we do not do it for them!
I know that you have some kind of a new shareholding system, in which the shareholders can invest not in the company as a whole, but in a specific pizzeria?
Yes, this is our really big idea. It has already been implemented. As I have already said, we openly have more than 200 pizzerias and almost no partner has attracted bank financing.
Lending?
Yes. A huge number of cases where private investors have invested money in our partners. The idea is this: we have a platform, we provide transparency, we say that this model works, it can be replicated. Our task is to connect on this platform the enthusiasm in the form of a hungry entrepreneur and capital. Figuratively, we say: we create a car, the entrepreneur is a racer, and the investor is a gas station, which gives him a sip.
We have an idea such that, even in the same China. If we manage to create a working model car, and we allow these hungry small entrepreneurs (and in China a huge number of entrepreneurs) to open pizzerias and give an opportunity to finance private investors, then you can achieve just explosive growth. Because on the one hand, investors get a working model, it is about the same everywhere. It is liquid, because it can be sold within the network. It is transparent because DoDo IS - our system - gives investors full transparency (they see what is happening in our system).
Here is a very important point about liquidity.You claim that now the scale is already such that a specific point can be sold within the network.
Of course, what is liquidity in general? , , - (- , ). . , .