4 minute read

Turning the Tables: Strategic Labor Planning to Satisfy Restaurant and Hospitality Service Demand

Diego Martinez, Operational Excellence Consultant
Nate Sugrue, Operational Excellence Consultant

The restaurant and hospitality industries are entering a new age of digital transformation, allowing for an enhanced capacity to satisfy customer demand. Driven by the pandemic, sales have increased, in some cases dramatically, across mobile order pickup, curbside, and drive-thru offerings throughout the nation, and it appears that many of the trends contributing to this surge are here to stay.

However, not all businesses in the industry are positioned to equally capitalize on these trends. As discussed in the previous posts in this series (part 1 and part 2), optimizing labor through increasing utilization, improving area and process efficiency, as well as deploying the right labor at the right time are all essential to maximizing the customer experience. If these operational considerations are not addressed before embracing new demand through emerging delivery models and technological innovations, customer experience could end up footing the bill.

Service-demand equilibrium

Reducing the time that customers spend waiting for their food is not only one of the most effective ways to ensure a quality customer experience; it is also highly beneficial to the bottom line. This may seem quite obvious, yet it is often overlooked. Waiting time is primarily affected by two elements: the number of customers and the service system itself.

Imagine a quick-service restaurant (QSR) operating with both average service levels and customer demand. Then, certain driving factors (either controlled by the business or environmental) change, leading to a swell in the number of customers. An example of such a demand catalyst could be the launch of a new rewards program incentivizing contactless pickup that happens to coincide with a global pandemic. Customer traffic may reshuffle across this restaurant’s different service delivery options, but demand as a whole skyrockets, while service levels and operational efficiency remain the same. In the near term, sales for this restaurant will increase, but so will the average waiting time of each customer.

As a result, the balance between demand and service level is disrupted. The quality of each customer’s experience begins to erode, accompanied by increased line abandonment. If the restaurant is unable to improve its current service levels, demand will regress. The consequences of such a scenario could be diminishing returns on newly implemented digital or technological innovations. On the other hand, if service levels were to be improved, the increased demand could be maintained. More customers retained, more products sold, and—most importantly—more profits.

The first step: Understanding

The first step towards improving service is understanding what, exactly, needs to improve. How can labor be optimized? Utilization studies as a first step are vital. Without recognizing where, when and why positions may be underutilized, it will be very difficult to build a strategic and effective improvement plan. Measuring other key performance indicators that go hand in hand with utilization—throughput, abandonment and total (or partial) time of customer journey—will be equally as revealing.

Reevaluating and outlining the skills, effort and workload requirements for each station in the process will also provide insight into where the gaps and improvement opportunities lie. From there, the objective is to create a flexible deployment plan that is scalable to demand and provides each associate with clear but concise expectations of their role.

From understanding to action

Once the areas for improvement are understood, it’s imperative to formulate specific, sustainable changes that optimize labor utilization.

Each organization is different, but a few simple yet effective ways to facilitate labor optimization at a QSR may be:

  1. Moving associates outdoors equipped with mobile ordering tablets and portable POS devices. Doing so will send customer orders to the kitchen sooner, as well as provide earlier engagement for customers.
  2. Reducing the number of associates responsible for processing a customer’s order on its way out the door. Though specializing labor in kitchen production is typically a good thing, excessive transfers can slow down processing time while increasing room for error.
  3. Training associates and management leads on the existing menu to allow for greater customer convenience and faster speed of ordering.
  4. Sharing KPI data with associates so they are aware of the team’s performance in areas such as order accuracy, drive-thru speed and any other performance areas or targets that may need improvements.

Implementing creative approaches to improve labor utilization will go a long way towards improving service levels. However, once these approaches are identified, it is imperative to engineer and implement a total work area and process efficiency plan. Leveraging this plan will ensure the new approaches being used to improve service levels are easier to maintain and coach. The result should be a store team that is more engaged, productive and effective at managing each delivery option. Considerations include:

The labor optimization journey

In the QSR industry, improving service levels can be a challenging journey. It does not end with the formulation of a static, perfect “Labor Deployment Plan” that will last the next 20 years. Instead, it is a consistent, every-day commitment towards improvement, which is something that requires complete cultural buy-in all the way from the CEO of an enterprise down to the most recent hire in the organization. However, it is also a journey that will yield growth. This growth will be felt not only in a business’s customer base, but also in its bottom line, allowing for the effective incorporation of emerging technologies and trends (to be discussed in the next post of this series) which will only serve to improve process efficiency and customer demand even further.

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