Inter departmental transfer rules

How to fairly compare RevPolu between departments?

RevPolu – revenue per worked hour – is a KPI widely used to measure performance. However, if the RevPolu calculation only includes hours incurred in one department and not those incurred in another department that have added value to the end-product, the comparison of the KPI between departments may be skewed and unfair. How can you resolve this issue in PMI? 

This article explains how you can use Interdepartmental hour transfer to achieve a more accurate RevPolu comparison. 

An example: Moonshine vs. Banquet 

  • You’re an F&B manager responsible for both restaurant Moonshine and Banquet.  
  • Let’s say the direct RevPolu for Moonshine and M&E are €58 and €66 respectively without considering the effort laid down by the kitchen staff.  
  • The chef informs you that her team lays down significant more effort when preparing food for Banquet than Moonshine.  

So, if we consider the total RevPolu, i.e. the total effort, including kitchen, Moonshine will appear more attractive. 

The hours incurred are as follow for a month: 

DepartmentRevenueDir. hrsTransf. hrs*Dir. RevPoluTotal RevPolu
Moonshine65 0001 120200€58€49
Banquet85 0001 280600€66€45
Kitchen 960800

Direct hours are those incurred by the staff in that department while transferred hours are those hours incurred by the Kitchen team when working on preparing food the receiving departments. In this example, Moonshine and Banquet.  

Let’s assume of the 960 hours incurred in the kitchen, 200 and 600 (*) are attributable to food preparation for Moonshine and Banquet respectively. 

Considering the total hours required – i.e. directly and indirectly incurred – to prepare the F&B product, we see that Moonshine in fact has a more attractive total RevPolu. In other words, Moonshine generates more revenue per worked hours than Banquet. 

Here is another example: Its 08:15am and your lobby is filled with 50 pax. Their tourbus has broken down and they need 25 day use rooms from 09:00 – 14:00, breakfast and luggage service on arrival and departure. You dont have this reservation in your system as its a *walk in*. You dont have the capacity in either Breakfast or Front Office, however, you are able to get assistance from Housekeeping and Adminstration to assist with Breakfast and you are able to get Maintenance to assist with the luggage pull. When the tour group has departed, and you have thanked your team for making yet another memorable moment for the guests, you are able to create the various rules in PMI so that each department reflects the actual activity internally. It allows you to transfer hours between departments at one property, not between properties.

Summary

You are able to monitor and report fair productivity and profitability at your hotel. Transferring hours via this module the actual hours in the cockpit are not moved but a fictive amount of hours are transferred to display the correct hours & productivity in sender and receiver cockpits. Please note that the direct RevPolu may be different from the total Revpolu. 

Intended Users

Controller and General Manager at property level and HQ Administrator or higher.

Requirements

The feature is activated in Hierarchy. Click on Tools, Module Settings, General Module, scroll down and choose HoursTransferModule and enable as shown below and Save/Update.

Instructions

For learning purposes we have divided it into 2 sections, Create & maintain transfer rules and Execution of transfer rules.

Section 1: Create & maintain transfer rules

  • Access and maintain transfer rules
  • Create a transfer rule based on:
    Fixed percentage
    Fixed amount
    Food revenue

Log on with your credentials. From the Main menu click on Advanced Settings and activate Inter. Dept transfer.

How to create a transfer rule

Example 1: Fixed percentage – this rule splits a % from sender to receivers

  1. Add a new transfer.
  2. The name of the rule can be sender.
  3. Description can be receivers.
  4. Choose your valid from date.  Be specific and click on date to activate. The transfer rule cannot be used outside this date range; however, the date can be edited later.
  5. Choose your valid to date.
  6. By choosing the relevant transfer rule, Fixed percentage, you determine the principle by which hours from sender is distributed to receivers. 
  7. A sender cockpit can only be a sender in one rule at a time.
  8. % to transfer, here you can put in the % you would like split. Transfer leftover, this is chosen when you want a fixed amount to remain with the sender.
  9. Choose your Receiver cockpit(s). If you add one too many receivers, you are also able to remove it quite effortlessly with the trash cans.
  10. Fill in your Fixed %. Remember that it must add up to 100% of the % to transfer.
  11. Hit Save, your transfer rule is saved.

Example 2: Food revenue– this rule splits a % from sender to receivers – the total hours on sender will be prorated based on the respective food revenues of the receivers as calculation of the number of hours to transfer from sender to receivers.

  1. Add a new transfer.
  2. The name of the rule can be sender.
  3. Description can be receivers.
  4. Choose your valid from date.  Be specific and click on date to activate. The transfer rule cannot be used outside this date range; however, the date can be edited later.
  5. Choose your valid to date.
  6. By choosing the relevant transfer rule, Food revenue, you determine the principle by which hours from sender is distributed to receivers. 
  7. A sender cockpit can only be a sender in one rule at a time. Kitchen is often set to use Total Food revenue and the only sender in this rule.
  8. Choose your Receiver cockpit(s). If you add one too many receivers, you are also able to remove it quite effortlessly with the trash cans. Only cockpits which have food revenue configured in the Hierarchy can be assigned as Receivers.
  9. Hit Save, your transfer rule is saved.
  • Adj. for neg. tracing factor, this option is only activated when Food revenue is chosen.  More details in the Terms and icons used section below.

Example 3: Fixed amount – it distributes a maximum monthly amount from sender to receivers

  1. Add a new transfer
  2. The name of the rule can be sender
  3. Description can be receivers
  4. Choose your valid from date.  Be specific and click on date to activate. The transfer rule cannot be used outside this date range; however, the date can be edited later
  5. Choose your valid to date
  6. By choosing the relevant transfer rule, Fixed amount, you determine the principle by which hours from sender is distributed to receivers 
  7. A sender cockpit can only be a sender in one rule at a time.
  8. Max. Amt.mthly, you select how many total hours for the month you want to transfer, if more hours selected than existing in the sender cockpit then all hours will be transferred.
  9. Choose your Receiver cockpit.
  10. Fill in your Fixed amount, and go to step 13 if you have only one receiver cockpit or
  11. You can add several receivers. If you add one too many receivers, you are also able to remove it quite effortlessly with the trash cans.
  12. Fill in your Fixed amount. You get an alert if the receiver cockpits do not match the maximum monthly amount.
  13. Hit Save, your transfer rule is saved.

Section 2: Execution of transfer rules

  • Execute transfer rules.
  • Understand the following:
    • Output report
    • Sender/Receiver cockpits
    • Management Perspective
    • Benchmarking
    • Terms and icons used in this module
  1. First things first, the overview list is in descending order. Scroll to the top of the list to find the last created transfer rule.
  2. Here you can Edit as its your last opportunity to change any part of the rule or
  3. Click on Execute
  1. Next Validate the period.  It cannot be outside the date range you defined earlier. Click on calendar and choose the month. If you created a rule over several months then you need to verify each month.
  2. Test run, here you see the calculation for validation, at this stage nothing is updated in sender and receiver cockpits. We recommend you always test run and validate the simulated result before choosing any of the other two options.

3. At this stage, a warning can appear if the transfer rule overlaps in a month that is closed. This is what we refer to as Period Lock. More on this in the Terms and icons section below.

4. Reverse only, you can reset the previous rule, not repost. Useful when the same rule is run but you want to reset any transfer done for that specific month

5. Reverse and repost, it calculates, resets all prior postings, and reposts using maximum hours for month to date. We set the rule for one month and as we have daily data including corrections to previous days, we make the postings on Day 1 using information available.  On Day 2 we reverse that and look at new MTD total and make a new posting for the sum of values now in Day 1 and Day 2. The same process Is repeated every day for MTD. This means that each day of the month will show some transfer hours and any changes to the month are picked up on the day.

6. Hit Preview output. Are all your details in order? You are able to move the report across the screen so you are able to check the overview / transfer rule.

7. Hit Update. Your transfer is now visible in sender and receiver cockpits.

  • Return to overview. Here you can extend an existing rule as you are able to edit the Transfer name, Description and Valid to date.
  • To the left of the rule, you have an expand arrow, here you find the output report. More information in the Terms and icons section below.
  • You can download the output report in .pdf or .xls

Sender and Receiver cockpits

  1. Go to sender cockpit, the example from Step 1 is Front Office.
  2. Activate Include transferred hours.
  3. Check that the period is correct.
  4. Activate Transferred hours below the graph you see the negative hours displayed when you hover over it. Productivity levels increases in sender cockpits.
  5. Activate Transferred hours below the wallet you see the negative hours displayed when you hover over it.
  6. Then Resource Hours on the right-hand side you see the day-to-day breakdown of negative hours and
  7. Below you see the MTD full amount.
  8. The same logic applies when you check receiver cockpits, the only difference is the hours displayed are positive and the productivity levels decreases in receiver cockpits.

Management Perspective

  1. Go into Management Perspective and choose between Hours.
  2. and Incl. Trans Hrs.to get a bird’s eye view of all internal transfers in the various outlets.

Benchmarking

  1. For those users with Benchmarking.
  2. Activate Productivity.
  3. Open up View Options.
  4. Activate Include Transferred Hours.
  5. Update
  6. Here you find an overview of all internal transfers in all departments in all hotels across your portfolio.

Output report

The output report, this gives a breakdown of the transfer rule you created. Summary MTD displays sender and receiver cockpits and hours transfer. Daily posting displays the daily breakdown. It can be downloaded in .pdf or .xls

Terms and icons used in this module

  • Adj. For neg. Tracing factor
    • This option is only checked when Food revenue is chosen.

When activated:

Receivers with negative tracing factor (food revenue) will not attract any hours, and

The absolute value of negative factor(s) will be added to receivers with positive tracing factors. E.g.
starting point: Kitchen: 200 hours to transfer to receivers Outlet A 10k, Outlet B 5k and Outlet -5k
Result: Outlet A 120 hrs (200*15k/25k), Outlet B 80 hrs (200*10k/25k) and Outlet 0.

When deactivated:

Receivers with negative tracing factor (food revenue) will attract negative hours:
Starting point: Same as above
Result: Outlet A 200 hrs (200*10k/10k), Outlet B 100 hrs (200*5k/10k) and Outlet -100 hrs (200*-5k/10k).

Max. Amt.mthly This enables you to select how many total hours for the month you want to transfer, if more hours selected than existing in the sender cockpit then all hours will be transferred.  For example, if you write 700 hours in this box and there is only 500 hours in the cockpit then only 500 hours will be transferred. The logic of the daily transfer is – the receiving cockpit cost driver is split daily and used as the base of the transfer for the hours.

More about Food revenue transfer rule

This option is only available if you choose Kitchen in sender cockpit (where food revenue has been configured in the hierarchy).

The calculation will be based on the food revenue. i.e.:
A kitchen is often set to use “Total food revenue”
The receiving cockpits belong to profit centre’s which have food revenue configured in the hierarchy.
Example: If Meeting & Events food revenue is 30% out of the total food revenue for a selected period in the execute popup then 30% of the hours should be transferred to the receiving cockpit
The drop-down list for receiver cockpit displays only profit centres where food revenue is activated (in settings of live forecast)

If a property has several kitchens the cost driver if often set to Food cost from selected profit centres instead of “Total Food Revenue”. The logic should then be that you can only choose receiver cockpits that are setup as cost driver in that selected kitchen. I.e., the drop-down list in receiver cockpit only display the corresponding profit centre.

Should the receiver cockpit only be for part of Total Food Revenue then the remaining hours will stay in Sender cockpit (kitchen).

Tutorial videos can be found here

PMI Advanced settings Create & Maintain transfer rules

PMI Advanced settings Execution of transfer rules

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