5 Ways Technology Helps Structurally Reduce Operating Costs in Restaurants 

Margins in the restaurant sector are wafer-thin. That is no news, but a problem that has existed for years. What ís new, however, is that affordable new technologies are increasingly tipping the scales towards greater profitability. 

Restaurateurs that want to strengthen their bottom line must be able to keep costs under control. The trouble is that when you say cost cutting, you think quality loss (or, at the very least endless negotiations with suppliers). 

It doesn’t have to be that way. 

The most sustainable way to reduce costs is to make processes more efficient.

It’s a logical approach that has led to considerable growth in almost every other sector. Cost savings follow naturally from workflow optimisation.  

But the restaurant sector isn’t just any other sector. 

An essential prerequisite for process optimisation is access to a considerable amount of data. In the foodservice sector, such data is often unavailable, not up to date, or so fragmented that they raise more questions than they answer. 

But that unfortunate situation is changing rapidly – for the better.  

Modern restaurant technology has made huge leaps in recent years, allowing workflows in both the front and back of house to be thoroughly improved. 

Modern restaurant management platforms can: 

  • automate complex calculations, 
  • process data from multiple sources (sales, inventory, labour),
  • free up hard-working staff from repetitive tasks (that software can perform faster and more accurately anyway). 

In addition, automation allows reports to be viewed daily rather than quarterly, so you can take action immediately when something goes wrong and not weeks later, after avoidable costs have been piling up

The results are significant cost savings without too much effort. Even better, these optimisations can be rolled out company-wide, giving you a cumulative effect that resonates across all your restaurant sites. 

This article covers 5 ways tech enables immediate cost savings for restaurants. 

(There’s one caveat, though, the ROI of tech is faster and more pronounced for restaurant operations with multiple locations.) 

Let’s dig in.

Examples of How Technology Helps Restaurants Keep Expenses Under Control

Technology has brought tremendous improvements to every industry in the past decades. The food industry is no exception. Here are five ways tech has been helping restaurants get ahead. 

5 Ways Technology Helps Infographic
Technology allows you to reduce these 5 things including human errors, food waste & costs.

1. Reducing human error through automated processes

In the restaurant business, time is money. But speed isn’t the only thing that matters. 

Accuracy is also important because mistakes can cost you time and money. Automating repetitive tasks helps increase speed while maintaining accuracy. 

One error-prone process is relaying customer orders to the kitchen. Wrong orders result in disgruntled customers and wasted food. An automated system can capture customer orders and send them to a kitchen display. You can also ask customers to place orders via QR codes. This reduces the chances of errors forwarded by servers to the kitchen.  

Another cost-reducing application of automation is the creation of purchase orders for F&B wholesalers. This repetitive task is prone to errors as staffs attempt to match inventory with demand forecasts. 

An automated purchasing system will suggest purchase orders based on par levels, bills of materials or predetermined minimum stocks of raw materials. 

Reducing the opportunities for human error removes the costly consequences of those mistakes. Also, when labour is short, you want to maximize your staff’s efficiency as much as possible. 

For some restaurants, robotic technology helps address rising labour costs and the shortage of good staff. Various food chains have been using robots to automate repetitive tasks. We can see robots cooking food and taking orders. However, this technology is still in its infancy. And not everyone can afford the kind of technology robotics offers.

2. Reducing food waste through better menu engineering

Food waste is a restaurant’s number one enemy in saving costs. 

Having lots of leftovers or non-performing dishes is terrible for the environment and your bottom line. During these challenging times, every penny counts. Wastage like these can be critical hits to one’s profitability.  

Monitoring and analyzing customer wants and dislikes can help you tweak recipes. You can include more of what people want and less of what they don’t. Each menu item can be broken down by component. This helps you charge the correct menu item price and replace overpriced ingredients.

Using data-driven menu engineering, you can make smart decisions about price increases, ingredient substitutions, and promotions. With sales analytics, you can see which dishes are performing well. This will guide your recipe development and inventory purchases.

3. Reducing unnecessary spending by spotting loopholes and savings opportunities

Tracking expenses is the surefire way to identify cost sinkholes and savings opportunities. 

Food cost management is one of the key ways operators can make their chains profitable. And yet, this is the aspect where there’s a lot of room for food waste and pilferage. Overstocking raw ingredients, improper recipe yields, and inventory theft increase food costs.

It’s easier to run a tight ship when everything is accurately and automatically tracked. To determine actual food costs, you can log food receipts and other expenses in an inventory management system. This helps update inventory data and COGs (costs of goods sold). As a result, you’d see how actual food costs compare with theoretical ones.  

Measuring food costs regularly and identifying variances will help you spot profit leaks. You can stop them before they get out of control. It will also help you catch any missing inventory. 

An advanced POS platform will also show you packaging costs, discounts, and utility costs so you can devise tactical strategies to cut them. For example, you can make take-out cutlery optional to cut down on packaging. You can also donate excess food inventory for tax credits.

4. Reducing labour costs by automating the recruitment process

At a time when restaurant staff shortages are a global problem, finding good workers is challenging. 

Automation saves time posting job openings on job boards and filtering applications. Employers can use HR platforms to check out candidates before they go for an interview. They can offer instant messaging services perfect for Gen Z applicants.  

In a tight economy, making wrong hires or hiring at the last minute is costly. You don’t want to lose customers because you’re understaffed. You can’t afford to suffer through a non-performing new hire.

With the economy improving, restaurants are scrambling to fill in positions. But with more job openings than applicants, hiring competition is fierce. An automated HR platform that makes recruiting seamless is a great way to stand out.

5. Reducing inventory costs by improving the procurement process

Food is the core of any restaurant. No one wants to risk running out of stock nor having too much stock on hand. It’s a delicate balance. 

It’s common for managers to order more stock than they need in anticipation of a busy day. Over-ordering hurts the bottom line of even the most established food chains. 

Restaurant procurement systems let managers place orders based on real-time stock levels, sales, and production needs. Using data, they can make accurate inventory forecasts eliminating overstocking and shortage. It eliminates buying mistakes and prevents stock pilferage leading to reduced food costs. In the end, profits increase. 

5 Technologies Every Modern Restaurant Should Have

As the restaurant business sector grows, so does your competition. And one sure way to gain a significant advantage is to utilize a more modern food management system. That said, just using any software won’t cut it. To succeed, you need to embrace and implement technologies and innovations that will give you a distinctive edge over your competitors.

You need to implement technologies and innovations that will give you a distinctive edge over your competitors.

1. Switch To A Modern Way of Restaurant Management

The importance of a food management system can never be overstated. But managing your food stocks and other items in your inventory using paper-based checklists and spreadsheets is simply an outdated practice.

You have to know in real-time which items you need to order, how much you have you left in your inventory, and when you need to restock your supplies. On top of that, you need to manage other aspects of your restaurant business, from financing and accounting, customer relations, sales and marketing, and more.

Selecting the best software to manage your restaurant can be a daunting task. There are so many options available in the market that filtering it down to a single choice can be quite confusing.

That said, you must consider, a modern restaurant software solution with a robust set of food management tools plus ERP and POS integration capabilities. This will help you manage your entire restaurant enterprise using a single, unified platform.

It centralizes all information, making it easy to store, capture, access, and share data to everyone in the team to help them stre

2. Keep Your Stocks Fresh and Safe For Consumption

Among the many benefits of food safety management system is that you know when to dispose of the items in your inventory. In the foodservice industry, you need to ensure that the health of your customers is not jeopardized as much as providing them with top class service and product.

A food management software, whether a small business SaaS platform or an enterprise-grade on-premise software, enables you to monitor your inventory, providing you a clear picture of all the items you have in stock. This helps you effectively schedule orders for resupply, calculate food costs, make food plans, change the items in the menu, and more.

Since you can keep a close eye on your inventory, you can quickly take note of items that are due to expire and perform the necessary steps to limit wastage. If you have expired ingredients in your inventory, you can properly dispose of the items and prevent them from being used and served to your customers.

3. Improve Order and Preparation Process Using Touchscreen

Touchscreen technology is not a recent innovation. But it is a technology every restaurant must have in its disposal. Among its many cloud benefits, it streamlines the ordering process. Thus it speeds up the relay of the customer’s order from counter to kitchen without compromising accuracy.

Recent innovations now allow customers to order directly from their table using fixed (self-service) or waiter-carried (assisted) tablets.

Orders are then displayed in real-time via touchscreen devices in kitchens. This setup has helped improve order accuracy and efficiency, especially when orders come with special requests. Line cooks and kitchen staff can easily see the orders in the queue along with special instructions. Orders are marked fulfilled once they are delivered to the table.

Restaurants that have implemented touchscreen technology have seen their preparation time significantly accelerated and their sales improved. Such benefits should encourage you to invest in tablets and touchscreen displays, shouldn’t they?

4. Empower Customers With Self-Order Kiosks

There are numerous reasons why self-order kiosks are becoming popular and widely used across the world. For one, it eliminates errors in orders, if not reduce them. Customers are the ones who enter the details of their order. This erases any instance of misunderstanding due to poor communication between restaurant staff and customers.

This is important because order accuracy is the leading aspect of the customer dining experience according to the American Customer Satisfaction Index’s (ACSI) Restaurant Report 2018-2019. According to the report, 89% of customers would rate their dining experience on how accurate (or not) their order was when it was first delivered to them. Staff expertise/treatment and food quality are tied at 87%.

Self-order kiosks also help decrease the average waiting time in an order queue. Forty-five percent of customers leave the restaurant when the line is long and the order process is slow. Operating a self-order kiosk in tandem with a staffed counter helps speed up the ordering process. That means more customers for your business.

Forty-five percent of customers leave the restaurant when the line is long and the order process is slow.

5. Offer Online Ordering

There is a huge market for customers who prefer to buy their meals online rather than take a trip to their favourite restaurant.

If you provide takeout/delivery services or want to spare your customers from long lines, then you need to consider offering an online ordering functionality. It is a component of the future of the restaurant industry.

You can provide such a service via your website or through a mobile web app that your customers can download and install on their mobile devices.

Restaurants that offer online ordering service to their customers have experienced a huge increase in their revenue. Order accuracy is high as well since customers don’t have to speak to restaurant staff and risk being misheard or misunderstood. Customers are not rushed, enabling them to enter the details of their order at their own pace.

Data capture and tracking is another benefit that stems from online ordering. Mobile apps can be configured to automatically capture essential data such as the customers’ name, phone number, address, and email contact. This can be utilized for analysis, sales, and marke

 

Let Technology Bring Your Restaurant to Profitability

5 Ways Technology Helps Dashboard
Using technology, a restaurant’s profit margin can go from 3-5% to double digits.

Investing in technology may seem counterintuitive when we want to reduce costs and save bottom lines. Yet, technology has proven itself to generate savings that justify the investment. 

Without technology, restaurant staff will resort to inefficient methods to manage daily costs. These manual methods can leave a lot of opportunities for profitability and growth on the table.  

In contrast, the right technology will empower your staff to make the right decisions. 

It will improve their efficiency so they can focus on delighting customers. Ultimately, you’ll enjoy more considerable revenues and higher profits. 

Check out Apicbase’s technology solutions to get you started on the road to growth and profitability.

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