The Caterer's Algorithm

“India is unhurt by the recession, we still pay Rs. 30 for our meal”, one student said with a grin and others agreed with positive notes.

“It has been the same price for last 2 years”, student2.

“But, how is this possible yaar? Fuel and vegetable prices have gone up”, student3.

“All restaurants in the city have reprinted their menus with increased prices”, student4.

The question is - how can this caterer operate at old prices? Additionally, the caterer supplied food to a number of organizations and in mass quantities.

We as a perplexed lot turn to Prof. Pitu.

The following is the paraphrasing of the recount by the Professor.

I call it 'The Caterer's Algorithm'. It is something they won't be teaching you in the MBA schools.

This name was coined after a caterer implemented a strategy to make huge profits at same prices. The following incident happened for real at an educational institute, infact it so real that I have to protect the identity of the institute and the caterer. Let me call the institute - ‘SIHS’ (Some Institute of Higher Studies), and the caterer - 'Ramu caterers'.

SIHS had over 500 students, and a fully residential campus. Ramu Caterers ran a mess (for meals) and a canteen(for tea and snacks).

At that time the country was sinking in a economic turmoil - prices of all commodities were up, inflation was at 12.25%, companies were downsizing, startups were shutting, banks were filing for bankruptcy, and millions of young college passouts were left jobless.

Ramu had to make his business survive, he had 30 employees and served orders at more than 10 organizations (including the illfated SIHS).

And Ramu saved it all by his own, without hiring any of our MBA buddies.

Being a very organized algorithm there are different strategies for canteen and mess management.

Ramu implemented the follow strategy for his canteen.

1) He hired Shantanu – a semi literate guy in his 20s who only understood the local language to serve tea/coffee. Shantanu was told to underfill the cups by about 20%, a well calculated limit. Shantanu was a face well chosen.

2) Most students did not realize the decrease in quantity. Incase anyone complained, Ramu would intervene and apologize to the customer saying, “Sorry bhai, he is new. He does not know how we deal here.” To finish with, he rebuked Shantanu, “Arey, fill the cups properly. This is our special customer”.

3) Ramu realized that the customer complained only 15% of the time. Considering the canteen sold about 1000 cups of tea/coffee every day, the ignorant-acting Shantanu saved him about 150 cups. That’s Rs. 750/day and Rs. 22500/month.

4) When one student threatened to complain to the food committee, Ramu put the entire blame on Shantanu and fired him. Shantanu was replaced by another guy who was told to execute the same algorithm with other products, e.g. milk shakes, sandwiches. This cycle continued, with the server and the food items changing each time.

As SIHS had students from all over the country, Ramu had to serve north Indian as well as south India dishes. Two cuisines meant increase in the number of dishes. Ramu adopted a simple mantra – the quality should ensured that everyone was equally unhappy and abstained from eating.

1) At the start of the semester (2-3 weeks) he served good food and secured the contract for the entire sem.

2) Then on, he deliberately prepared bad food from the cheapest vegetables available in city. He did not hesitate to make the same dishes all 7 days of the week.

3) Observing this pattern, many students got frustrated and started surviving on snacks (boosting ramu's canteen business) or began to eat out of campus.

4) At this stage, Ramu started preparing food only for 200 students, but he got paid for 500, as the institute rule was if a student subscribes he/she pay for all meals. The mess bill always remained a constant. Ramu's extra income was 300*30*60 = Rs. 5,40,000/month.

5) As a precautionary act Ramu cooked some good dishes, and nutritious vegetables 2-3 times a week. But again, he had to cook for 200 plates only. He tactfully selected these days on random, students had already planned to skip meals or eat out.

6) The fact that almost all students had seen 'Rang De Basanti' (Zindagi jeene ke do tarike hote hai, jo hota hai hone do, dekhte raho ya use badalne ki jemmedari lo) made a cover-up plan a high priority. Ramu paid special attention to the likes/dislikes of the food committee members and maintained a good repo with them to subdue any complain or retaliation. Additionally, he greeted them in local language, and played local FM channels whenever possible.

There was no danger from the Professors/Staff as most of them got tiffins from home or had enough money to eat at the good restaurants. Infact SIHS management had the view, “Why should we change the caterer, he is serving quality food as reasonable prices. He's the best for our students”

Since SIHS conducts masters courses only, every batch finished in 2 years, and a new one joined every June. Ramu could continue his algorithm for years until a student discovered it, analyzed and rationalized its different aspects and presented it as the final sem thesis.

The use of this algorithm is perfectly legal, as there is no law against keeping 20% of the cup empty. Additionally, our constitution does not define the term “Bad Food”.

This was the caterer's algorithm. Simple, ingenious and effective. Today Ramu works as a consultant to the World Bank, he is involved in passing loan proposals and in several micro-finance programs in developing countries.