Drive-thru restaurant disruption was rampant in the last 18 months. We have all heard this over and over – the coronavirus pandemic affected the restaurant industry and fast-food restaurants with drive-thrus emerging as our savior by feeding us and creating a sense of normalcy in a chaotic world. We are past the stage of frenzy and now can analyze the drive-thru restaurant disruption resulting from COVID-19.
How do drive-thru restaurants keep the momentum going? 2021 is posing more significant challenges – what worked with drive-thru last year may not be enough to keep customers happy. From the vaccination rollout to eased restrictions and technology innovations, restaurant operators are daring to hope the end of the pandemic is in sight and are reopening their dining rooms with new menus, pricing, and more.
What also came to light last year were the loopholes in the supply chain of the foodservice industry. Any misalignment between product availability and reliable transportation can disrupt the whole supply chain and our ability to meet the consumers’ demand.
According to USDA, quick and full-service restaurants accounted for nearly 50 percent of the U.S. foodservice industry spend last year. Knowing the growth, fast-food and drive-thru chains can’t afford to let their competitive edge wain with complacency. The chart below is a good indicator of how many fast food, restaurants with drive-thrus fared the competition.
American Customer Satisfaction Index scores for leading quick-service restaurant chains in the United States in 2020, by restaurant brand
The Gap Widens in Food Supply Chain
The food sector is witnessing a type of what supply-chain experts call the “bullwhip effect.” It’s where companies pull back their operations, looking to rapidly scale up on signs of improving demand, leaving suppliers scrambling to keep up.
The food and beverage consulting firm JPG Resources LLC confirms that most restaurants, institutional foodservice operations, and hotels cope with a big price surge on staple ingredients and irregular availability.
At the same time, the disruptions and changes in delivery patterns are increasing transportation costs too because these specialized truck trailers needed to transport food are either in high demand or out of position. (Smith and Page 2021)
In short, it’s time for fast-food chains and drive-thru restaurants to pursue innovative solutions to maintain their desired margins, smartly priced menu items, and also keep their customers happy.
AI, Automation and Digitization in the Supply Chain
Automation, digitization, modern technology, and data are the new cores of successful supply chains. By harnessing the power of machine learning, artificial intelligence (AI), advanced and predictive analysis, drive-thru restaurants can improve efficiencies. They can proactively manage inventory, make route changes, opt for better-priced raw materials, optimize strategic sourcing relationships, and create new customer experiences that increase satisfaction and boost sales.
Let’s take the restaurant end of the supply chain, for instance. Automating the upselling process can aid restaurants to manage their inventory better and avoid running out of essential products while expecting a delivery – more so if unpredictable weather prevents supplies from reaching them.
If the AI platform embeds into both the menu and the inventory systems, the restaurants can promote or withdraw items based on stock ups. Say, if the restaurant is running low on chicken burgers but has excess beef, the menus can push beef products on the menu and reduce the demand for chicken.
The global food chains like McDonald’s also understand the importance of these modern technologies and use big data and AI to improve their operations across the board. (Future Supply Chain 2021)
Using Smart Sensors to Drive Supply Chain Innovation
It makes sense to integrate smart sensors into the supply chain that can decrease operating costs, increase asset efficiency, improve demand planning, and provide critical insight into customer behavior. As centralized platforms and communication networks continue to evolve, business owners can consider how to better sensor-enable their supply chains from end to end. (Deloitte Insights)
Data Disruption Is Here to Stay
Every industry is running towards digital data – it is the future. It does much more than just accessing demand supply and filling food shelves in reactionary mode. Drive-thru restaurants can get a detailed view of the structural risks in the industry – shortage of food items, mismanaged or incorrect deliveries, late fees, and more. A robust data strategy can save the restaurant from last-minute panic and tighten every aspect of the supply chain.
Serving a better burger is not disruptive. What is the end game? Anticipating supply chain shifts, customer wants and the ability to shift on a moment’s notice are key. A better ROI and satisfied customers who keep coming back when you have what they want, when they want it will decide your fate. Imparting an AI strategy in your ordering processes and deliverables is key to winning the food service industry’s competitive battles. What does your battle card look like?
Works Cited
Smith, Jennifer, and Paul Page. “WSJ News Exclusive | Food Supply Chains Are Stretched as Americans Head Back to Restaurants.” The Wall Street Journal, Dow Jones & Company, 21 May 2021, www.wsj.com/articles/food-supply-chains-are-stretched-as-americans-head-back-to-restaurants-11621589405?st=tbo63a5kosrowk9&reflink=desktopwebshare_permalink .
Future Supply Chain 2021, FSC. “McDonald’s Is Using AI and Data to Optimize Its Supply Chain.” Future Supply Chain 2021, Future Supply Chain 2021, 18 Mar. 2020, supplychainnext.wbresearch.com/blog/mcdonalds-ai-data-optimize-supply-chain.
Deloitte , Insights. “A Series on Supply Chain Innovation: Deloitte US.” Deloitte United States, 2021, www2.deloitte.com/us/en/pages/operations/articles/technologies-for-supply-chain-innovation.html.
