How RFID is Transforming Workflow in the Fast Food Industry
The fast food industry’s technology requirements are changing faster than ever, but its margins are shrinking. As a result, these businesses face enterprise-wide challenges that threaten the potential long-term sustainability of their organizations. One of the biggest priorities right now for many quick service providers is maintaining and protecting supply chain operational flow in restaurants and providing better inventory traceability. For example, defective or damaged batches, expired products, inaccurate shipments, out-of-stocks, and overages due to inaccuracies in restaurant inventory can make day-to-day operations difficult.
The use of radio frequency identification (RFID) has grown in the textile retail sector. Retailers can easily view and manage their inventory with up to 98% accuracy in minutes by tracking products that are tagged at the item level. This frees up associates’ time to better serve in-store customers and enables brands to provide convenient services, such as online shopping, floor replenishment and in-store pickup (BOPIS) to deliver a even better customer.
However, this technology is not exclusive to retail. He now helps the industry evolve beyond current manual inventory systems and strives to maintain product accuracy and freshness. RFID also allows quick service brands to stay competitive in terms of ordering, speed and efficiency, especially in today’s environment.
The operational challenges of inventory management
According to a study published by the National Restaurant Association, 96% of operators experienced supply delays or shortages of essential food or beverages in 2021. These challenges are expected to continue, and inventory management is essential for rapid services to optimize the supplies that they receive. With a significant amount of perishable inventory, restaurants need to stay on top of their inventory to avoid waste. However, these checks are usually done manually, which is time-consuming and creates the risk of human error.
With employees manually managing everything (receiving, inventory, replenishment, and warehouse numbers) using pen and paper in such a fast-paced environment, the data collected can quickly become outdated and often inaccurate. Additionally, communication between staff is often verbal and only occurs briefly between shift changes. This creates a lot of room for error.
Manual inventory leads to significant inventory management issues and has a negative ripple effect on the restaurant as a whole. Instead of spending time serving customers and providing a high-quality visitor experience, staff instead spend time doing inventory checks that are essentially unnecessary. The general lack of visibility can lead to empty shelves at the entrance, prompting customers to leave without buying anything, leading to excessive waste and high overhead.
The role of RFID
RFID enables the industry to improve both backend and upstream operations through practices that create efficiencies at all stages of the supply chain, from distribution centers to food service.
Ultimately, RFID streamlines restaurant receipt, allowing fast food businesses to accurately track all items as they arrive within minutes. From there, regular in-store inventories allow restaurants to maintain up to 98% visibility into stock levels. Warnings can be issued regarding expired products, restaurants can conduct daily or weekly inventory counts to reduce understatements and overstatements. They can maximize the use of all items and limit orders to what is needed, minimizing waste.
Create a long-term solution
The restaurant industry is expected to reach $898 billion in sales in 2022. The industry is booming and growth is only expected to continue. With the development of more and more quick service restaurants in the United States, restaurant chains and their franchises are becoming more difficult to manage, the competition is only increasing.
By using RFID, restaurants can completely streamline their inventory management. With better visibility into inventory levels, restaurants can minimize waste and sustainably increase margins, leading to long-term cost savings, driving financial growth and more efficient operational flow.
With a much faster and more accurate solution for tracking inventory, already taxed staff can significantly reduce time spent on administrative tasks. Instead of spending long periods of time manually, and probably inaccurately, taking stock, they can put more effort into serving customers and delivering high-quality service. Alternatively, they can devote more time to personal or team training, developing themselves or their colleagues.
The growth of RFID in the retail sector can serve as a benchmark for those operating in the industry. The improvement that retailers are now seeing – where they have gone from around 65% inventory accuracy to 98% – is hard to ignore. The sooner restaurants adopt this technology, the sooner they can begin to gain a competitive edge.
Dean Frew, Chief Technology Officer and Sn. Vice President of RFID Solutions, SML Group, and Founder of SML RFID (formerly Xterprise, acquired by SML in 2013). With over 20 years of experience providing RFID solutions to retailers and brand owners around the world, Frew is responsible for SML’s overall strategy to advance its RFID tags and solutions.