The restaurant industry will be reshaped by several forces converging together over the next few years ranging from increases in labor costs, the new fast casual 2.0 model, delivery, technology, supply chain pressures, changing consumption and consumer dining behaviors, urbanization, and globalization (to name just a few).
It’s clear that labor optimization will become critical to any restaurant open today seeking to still be alive in five years. It’s not that managing labor is any more or less important than it was in the past, it’s that the sophistication required to manage and optimize it going forward will prove far more challenging. As survival-of-the-fittest instincts kick in for the strong to evolve or die, they will look for every competitive edge they claw into their toolkit, including killing off the weaker of their kind that didn’t prepare or avail themselves with the best offensive and defensive strategies.
Perform Capacity Analysis & Establish Par Levels
Putting this into practice, say for a drive thru restaurant, one question would be what is the maximum number of vehicles that each restaurant can put through in an hour? If it’s a large system and some locations have double lines and multiple service windows but others do not, is this factored into the capacity analysis for each location, and then system wide? Or is it just averaged across the company (as this could make a difference in the performance evaluation for each location)?
Execute Station & Position Productivity Analysis
TASK ANALYSIS There is no point making more efficient that which shouldn’t be done at all. To identify which processes are really necessary, performing a task analysis for each (or at least starting with the most common) process completed at a restaurant is the first step. Then, companies can begin to engineer completely new ways of addressing these tasks to allow for quantum leaps in performance and productivity.
LABOR ANALYSIS: How many hours of time does as company buy each year (combining both salaried and hourly employees)? Is there any idea how much time is spent on doing what? If this labor data is collected and put into a pie chart, how would it look? Let’s assume a restaurant has 50 employees on a FTE (full time equivalent) basis. Those 50 employees multiplied by 50 work weeks per year and 40 hours a week comes to 100,000 man-hours per year. Many companies do not know where all of that time is going, much less any additional granular-level detail (by position, department, and how to look by classification of task and activity). We’ve observed the individual, manual filling of thousands of soufflé cups with different sauces – up to 2,000 cups per day. Extrapolated out over the system, millions of cups were being filled by hand each year. The result was both a waste of activity and inconsistent product (as the cups were filled to varying levels). The fact that this task could be centralized, or even mechanized, could have eliminated hundreds of labor-hours each year.
TIME & MOTION STUDIES: Scientific management systems have been around since the 1950s, but time and motion studies are still as rare to the restaurant industry as they’ve ever been. While every guest and restaurateur knows that ticket times are important, even on this point most restaurant operators can’t quantify with certainty their ticket times, much less produce scientific insights into the sub-components of the processes that influence ticket times (from ordering through storage and production). What’s partially confounding is, while this is so rare, the conversation about labor optimization and increasing labor costs is being discussed every day. Discourse is more than complaining and conjecture, absent time and motion study by task, position and functional area, focused on the Pareto principle pursuing those highest cost categories in descending order.
Identify Tech-Enabled Productivity Enhancements
It’s is true: most of the line-level staff in limited service restaurants will be replaced by robots. Kiosks and other self-ordering technologies have already begun to replace hourly employees (McDonald’s, Panera and Wendy’s have all implemented some self-order tech in at least some of their stores to mitigate and offset the effects of wage inflation).
Predictive analytics technologies that help forecast customer traffic and even popular menu items by analyzing and aggregating historical data – everything from previous order trends to the weather and traffic patterns – will enable restaurants to more accurately plan their labor schedules and optimize time on the clock.
Foster Associate Engagement
As cliché as it may sound to anyone looking for clever new tricks for labor productivity improvements, any productivity initiative that doesn’t put winning the hearts and minds of employees at the top of the list of issues to address is doomed from the start.
Communicating (early and often) about the changes that will be upcoming for employees is a crucial step before implementing the productivity initiatives. In fact, Associate Engagement can even be improved during times of change if employees are provided with tools to provide their feedback to the changes being made, and their opinions are heard and taken into account.
Develop Company Culture & Career Progression
Company culture is something that needs to be actively lived in an organization, not just a mission statement and mantra that rests in a dusty three ring binder on a shelf in the back office. Having this set of values, “norms,” and beliefs developed and truly integrated into the company is something many companies (mistakenly) believe is an unnecessary expense, rather than an investment that pays returns in the long term.
Implement Management by Objectives & Meritocracy
Management by objectives (MBO) is a philosophy developed in the 1950s. While it’s still taught in business schools and widely and generally understood, it’s rarely implemented (or at least implemented effectively). MBO enables the creation of a meritocracy within an organization, and the best contributors (regardless or seniority or position) are able to elevate themselves and, likewise, the business through meaningful and tangible contributions which are quantifiable in nature (as “do your best” objectives are as good as no goals at all).
Perform Organizational (Re)Design
Organizational design – or identifying elements of work flows or systems that provide opportunities for improvement – enables companies to focus efforts on maximizing both human processes and technological advances.
Companies should ask themselves if they would still structure their organizational chart the way it is now if they could do it all over again. Even universities have had to reshuffle their degree programs at an accelerating rate – as, for many, by the time a student graduates from a four-year program, half of what they have learned is outdated (or even obsoleted) by new technologies and discoveries.
The PIMM™ Store Management System (PIMM™ SMS) provides our customers with a customized quality management solution for restaurants, convenience stores and retail grocery establishments.
The system provides a user-friendly interface to enhance operational efficiencies for managing temperature, energy, drive-thru performance, and quality control 24×7.
Optimizing the staff responsibilities and maximizing the service to the customer is of critical importance. The PIMM™ Position Optimizer dynamically assigns staff with corresponding responsibilities based upon critical needs and priorities.
The system will automatically reassign resources to key stations as the availability of staff changes throughout the day.
Call us today (858) 457-8160 to schedule your FREE ONLINE DEMO!
Source: Global Restaurant Consultants