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How AI Will Evolve Restaurant Management Fundamentals

How AI Will Evolve Restaurant Management Fundamentals

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AI’s ability to turn massive data sets into actionable insight and automated workflows holds great promise for the restaurant industry.

This article was written by Tony Smith, CEO and Cofounder of R365, for QSR Magazine.

So often with AI, there are questions around how it will change our lives, and many popular answers involve large, sweeping, abrupt theories—or world domination. The most meaningful answers are in specific, small, incremental ways. In the restaurant industry, the most important changes will stem from predictive management of food and labor costs and improving guest experiences, ultimately increasing efficiency and profitability.

Most of the recent focus on AI in restaurants has centered on guest-facing technologies such as kiosks, ordering systems, and automated food preparation devices (looking at you, robots). However, foundational restaurant management processes are also ripe for AI application.

Yum! Brands in 2023 implemented “recommended ordering” to predict and suggest how much product Taco Bell and Kentucky Fried Chicken managers should order weekly, helping to bring down food costs.  

This groundbreaking technology can make minor tweaks that result in major financial gains. Chief among them are invoice management, sales forecasting, employee scheduling, and inventory control.

Invoice Management

Many restaurants today struggle to run accounts payable with costly, slow, and error-prone manual processes. Managers collect stacks of paper invoices and somehow get them to a home office, accountant, or bookkeeper, who then prints and mails physical checks. This manual human processing distracts energy from more effective uses of restaurant experts’ time.

By replacing this manual, error-prone process with optical character recognition powered by AI, restaurants can do what used to require hours of manual effort in a matter of seconds. When combined with machine learning, invoice errors are immediately identified, saving time and cost, while providing accounting teams the opportunities to glean efficiency-driving insights from their business’ operations.

Sales Forecasting & Employee Scheduling

Building a restaurant schedule has long been called an art and a science—or at least I’ve said that before. The problem is that the art part of the equation remains too dominant. While restaurants are among the most complex businesses, they present the highest potential gains with automation.

Sales forecasting technology analyzes historical sales data and seasonal trends to create accurate sales predictions in seconds. Once expected sales are known, the same system can recommend the right employee schedule to cost-effectively serve customers on any given day. This is repeatable and dependable week in and week out. This technology accounts for holidays or special events that may change an ordinarily quiet night into a bustling time at the restaurant and help managers see around corners to keep the store performing at its best.

Inventory Control

Food cost (alongside labor) is the other major area of restaurant spend. While the industry long relied on PARs and institutional knowledge, these methods leave ample room for minor errors that result in major margin impact.

Inventory management technology knows recipes and uses sales forecasts by item to recommend precise ingredient purchases. Recommendations based on trends help operators purchase the right amounts at the right time to avoid waste, improve cash flow & guests’ experiences, and drive profitability. Nobody likes to show up and ask for their favorite dish only to hear the restaurant ran out.

While the advent of AI is exciting on many different fronts, its unique ability to turn massive data sets into actionable insight and automated workflows holds great promise for the restaurant industry. In the past, gathering, analyzing, and acting on the billions of data points restaurants produce couldn’t be done with the speed and precision needed. Most of the data just went to waste and didn’t make anyone any smarter. Now, AI armed with this data will provide a new foundation for restaurants to streamline operations, grow faster, and consistently provide unforgettable guest experiences.