An Industrial Engineering in Foodservice Perspective

A lot has changed in the last 10 years. For one, 10 years ago, The Profitality Labor Guru consortium started. How time flies by when you are having fun! Several of the members of our group have been around for much longer than this; a total of nearly 80 years of combined foodservice experience between the 3 executive members of the team.

While looking back on the past 10 years I found myself reflecting on how much the foodservice industry has evolved during that time. As the Profitality Labor Guru consortium turns 10, I want to offer 10 thoughts from me and my partners about how the foodservice industry has changed in the last 10 years.

1. Labor

Labor challenges for restaurant operators have gone from bad to worse. Operators remain concerned with not only recruitment but also retention and cost of labor. The country’s stable employment picture makes it challenging for operators to find qualified candidates.

To manage this challenge, foodservice operators look for ways to reengineer what they do and use labor systems that provide more accurate inputs and more flexible outputs, resulting in smarter labor scheduling. For example, the application of work content and activity-based scheduling, using the Industrial Engineering technique of time and motion, is much more prevalent than before. Concepts realize that managing labor with empirical data and using a percent of sales is not going to provide the stores with the “right labor, in the right place, at the right time” to deliver the operation’s brand promise.

The socialization of labor, where employees can share and trade schedules, continues to become more popular. This approach makes it more convenient for employees to manage their work-life balance, releasing this responsibility form the manager.

2. Product quality

Operators continue to improve their quality threshold. There has been an integration of freshly prepared items at different concepts from different service modes. Customers now expect quality along with their need for variety and individuality. Restaurants have to find creative ways to meet this challenge without adding more labor.

3. Food accessibility

A growing percent of the food sold goes to people instead of people coming to get the food. Before, if customers did not come to the restaurant, their only choices were the drive-thru and pizza delivery. Online ordering and third-party delivery companies now help operators take their food to customers’ locations. As a result, today’s value equation must factor in not only how an operation gets the food done but also how the customer gets the order.

Further, retailers — drug stores, c-stores, groceries, etc. — continue to offer more and better-quality food. At first it was just some food but now many take their role in the foodservice industry very seriously and offer options that can rival restaurant quality. These retailers appeal to customers’ need for convenience. They figure the customer comes to their stores to fill their shopping carts for other reasons so why not fill their bellies, too?

4. Service

The definition of service has changed dramatically. Some concepts even operate without any face-to-face interaction, even at the store level. Customers order from a kiosk or online and then pick up their food from a locker. Customers can also preorder via an app, get to the restaurant and the staff can fire the order to the kitchen as the guests sit down. Similarly, technology now allows customers to close their tabs without interacting with an employee, giving guests more control of their meal experience.

5. Technology application

Big advances in front-of-the-house technology, like kiosk and app ordering, continue to impact the industry. Technology continues to make inroads in the back of the house also. For example, some applications allow better information to flow faster from the stores to the operators, owners, repair companies and customers, among others. The information can cover a variety of business issues including sales, repair needs, equipment performance, food safety checks, updates to guests about their orders and more.

One area of technology that has recently sprung up is consolidators of different third-party ordering systems. This application enables the restaurants to not have to manage the flow of orders from a third-party tablet.

6. Restaurant analytics

Restaurant operators use analytics more frequently to provide information that will help them drive business decisions. This is much more than profit and loss and other financial data. It includes the aforementioned labor system inputs that facilitate driving more accurate schedules. Analytics do not replace the executive team’s experience, but it does provide another level of information that will aid in better decision making.

7. Design

The openness of kitchens has increased in many concepts as operators now hide less of their operation. This creates some operational challenges, but it seems to match what some consumers want. Although some of the comments made in point No.4 above — service — would present an argument for the need to have an open kitchen. Maybe this is the way consumers validate what is going on. Should we blame the Millennials on this?

One other significant change in the design area is the “honey I shrunk the footprint” goal. Real estate and construction pressures make restaurant operators opt to run their businesses from smaller facilities. The trick to successfully reducing a kitchen’s footprint is not compromising sales, capacity and speed of service.

8. The fast-casual effect

Everybody wants to be like fast-casual operators nowadays. Fast-casual concepts woke up the quick-service restaurant segment, resulting in a blending of QSR and fast casual. Even full-service concepts are developing their own fast-casual concepts.

I would suggest the driving factor for full-service restaurant chains that want to jump on the fast-casual bandwagon is rooted in customer demand and the unit economics that fast-casual concepts generate. This includes lower capital and operating costs, with similar high per-person tickets compared to full-service.

9. Equipment

In the equipment front, rapid-cooking technologies have sprung up everywhere. Every major foodservice equipment manufacturer seems to have this technology available.

Combi ovens have also gone mainstream in the past 10 years. From our observation, combis have great capabilities but many times a concept uses only a portion of what they buy, which means the business does not get a full return on its investment.

Holding technology has also improved dramatically, as well as the modularity of these pieces of equipment, including the controls that help concepts optimize quality and food safety.

10. Automation

Although automation has always been talked about, there seems to be a lot more interest and activity for automation lately. One can say that it started with machines that provided a product fully automated (e.g. McCafe espresso and smoothies). Nowadays, automated machines that make salads, bowls and even burgers are coming out.

So, as we reach a decade as an Industrial Engineering-oriented foodservice consulting firm we look to the past and excitedly await what the next 10 years have in store for all of us in terms of how the industry will change. Cheers to another 10 years!