Social Distancing Requirements Impact on Restaurants’ Capacity and Demand Management

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Table of Contents

Introduction
Decreasing Throughput Time
Increasing Throughput Rate
Increasing Hosting Capacity
Conclusion
Reference List

Introduction

The COVID-19 pandemic has changed how businesses operate around the world. Particularly, the tourism and hospitality industry has been impacted because businesses have been forced to change their operational plans to comply with government directives for customers to practice social distancing (Klein, 2020; Humphrey, 2020; McGovern, Flood, and Carson, 2020). The goal of introducing and enforcing such policies is to minimize the spread of the coronavirus through limited human contact (Christner et al., 2020). However, as highlighted above, complying with these new measures has implications on contemporary restaurant management practices, especially concerning their capacity and demand management tasks.

The difficulty of balancing capacity and demand requirements in the new business environment is problematic for restaurant managers because they have trouble balancing their profitability and operational goals (Mahmut, Ali and Donnay, 2021; Min, Yang and Kim, 2021; Diego and Noelia, 2021; Duque et al., 2020). Consequently, they have had to come up with new ways of balancing these interests while complying with new government directives on social distancing.

Owing to the difficulty of finding the right balance between their profitability and operational goals, it is prudent to understand the impact that the implementation of social distancing policies has had on restaurants, from the perspective of their capacity and demand-side operations. Independent of my work experience, this paper will highlight strategies adopted by restaurants to manage their capacity and demand-side needs in an environment characterized by social distancing.

The first one is increasing the throughput rate, which refers to the number of customers coming in and out of a restaurant (Ionica, 2019), and the second one is expanding the capacity to host more guests by altering the physical space. The third strategy is centered on the need to decrease the time taken by customers when they are in the restaurant. These plans have been adopted to manage the capacity and demand issues that arise from the implementation of social distancing policies.

Decreasing Throughput Time

Decreasing throughput time is one measure that restaurants have taken to comply with government directives of implementing social distancing policies on business premises. The plan is intended to minimize the time taken by customers at a restaurant to make room for more people (Ivanov, Tsipoulanidis, and Schönberger, 2018). This way, employees can serve more customers within a short time, or, at least to the level in which they would have operated were their customers not required to observe social distancing guidelines in the first place. Therefore, decreasing the throughput time is one way that restaurants hope to serve the same customer traffic volume witnessed before the pandemic.

Research studies have highlighted the merits of adopting strategies for decreasing the throughput time by citing examples of its success in the manufacturing sector (Ionica, 2019; Bowes, 2020; Youn, Lee, and Ha-Brookshire, 2021). Recently, there has been an upsurge of evidence that mentions its relevance to the tourism and hospitality industry as well with researchers, such as Shin and Perdue (2021) arguing that it can help to improve the customer non-transactional value, especially if analyzed within the digital marketing lens. Overall, the adoption of strategies to decrease the throughput rate is built around the potential for optimizing business operations during busy times.

To comply with social distancing requirements in Russia, Kentucky Fried Chicken (KFC) adopted strategies to decrease its throughput time by replacing human serving processes with fast and efficient robots that could serve more people, cheaply, efficiently, and with minimal human contact (Renu, 2021; Humphrey, 2020). A New York-based restaurant, Shake Shack, also adopted a similar strategy to decrease its throughput time by increasing the number of drive-through windows and vehicle service lanes to serve more customers within the shortest time possible (Klein, 2020).

Unlike KFC’s approach, it changed its operational efficiency plans by setting up more service lanes, as opposed to the use of robotics to adapt to the new operating environment. Nonetheless, both examples highlight how restaurants have adopted measures to decrease throughput time to comply with social distancing requirements. Indeed, in both examples, possibilities of unnecessary human contact are eliminated.

Increasing Throughput Rate

Increasing throughput rate refers to measures taken by businesses to increase the flow of customers in and out of an establishment (Shiver and Eitel, 2017). As highlighted in this document, it has been difficult for restaurants to do so while maintaining social distancing rules and requirements. Therefore, some of them have had to change or modify their capacity management plans by developing new service lanes to accommodate more customers, while maintaining profitability.

Chipotle, a Californian-based restaurant, has converted most of its in-house operations to accommodate drive-through services (Klein, 2020). This strategy has been integrated with a pre-existing third-party model of purchasing food, which allows customers to order food using a mobile app and pick it up at their nearest outlet. The development of the drive-through model in local communities where its customers live has minimized the possibility of unnecessary commute and human-human interaction (Klein, 2020), thereby improving its compliance with social distancing regulations.

In furtherance of this strategy, the company intends to increase its conversion rate of in-house dining services to drive-through services from 100 sit-in outlets to 1,000 drive-in restaurants by the year 2025 (Klein, 2020). The existence of this long-term plan means that the restaurant intends to integrate its throughput rate increase plan into its medium-term goals.

Overall, the above example shows that some restaurants have decided to increase their throughput rate by reviewing their existing workflows. Those that have had the greatest success have demonstrated a keen understanding of how their shop floor functions. By easing the pain points and bottlenecks associated with managing capacity issues, they have developed new ways of increasing foot traffic through automation. This plan has helped them to reduce the number of guests willing to dine in and still increase profitability from the increased revenue that emerges from the expansion of customer capacity using automation.

Increasing Hosting Capacity

One of the strategies available to businesses that intend to comply with social distancing requirements, while maintaining their profitability, is increasing their hosting capacity. The goal of adopting this strategy is to accommodate more customers on the same premise while ensuring that they maintain a safe distance from each other (Gkoumas, 2021). A restaurant in Turkey, Golden Horn Estuary, has put domes on tables to separate one group of diners from another, to comply with social distancing rules (Humphrey, 2020).

By doing so, they have made it possible to accommodate more guests by utilizing their open-air gardens to accommodate an additional number of customers who are also accommodated in socially distanced domes (Humphrey, 2020). However, the domes have been designed to accommodate two guests, thereby influencing guest arrangement plans at the restaurant.

Starbucks has also adopted similar measures to increase its physical capacity to handle more customers by building several hundred pickup stores to manage the high traffic of customers who have opted to use digital purchasing techniques to order food and drinks (Klein, 2020). These pickup stores are set to increase the restaurant’s capacity to fulfill orders without having an unnecessary commensurate increase in human interaction.

Overall, the above-mentioned examples highlight how restaurants have managed their capacity and demand-side requirements by developing new plans to limit the physical movement of people and expand capacity to serve customers by automating processes and increasing customer traffic through physical modifications to stores and sitting spaces. These examples provide a microcosm of how the larger tourism and hotel industry is complying with social distancing measures that would enable businesses to function even as the pandemic rages on. Consequently, through their adoption, it is assumed that they will better balance their capacity and operational challenges.

Conclusion

This paper has shown that the need for businesses to be profitable and the requirements for restaurants to practice social distancing are conflicting interests because compliance with social distancing rules diminishes a business’s ability to cover its costs and make a profit due to limited customer traffic. Consequently, restaurants have had to come up with innovative ways of managing both interests to remain operational.

In this paper, these techniques have been categorized into two broad categories explaining how restaurants can increase the throughput rate, by either decreasing the throughput time or increasing the physical capacity to host more guests. The table below provides a summary of the examples provided in this document, which highlight specific instances where businesses have employed these techniques to comply with social distancing regulations.

Summary of Illustrations

Restaurants that Have Decreased Throughput Time	Restaurants that have Increased Throughput Rate	Increasing Hosting Capacity
A Kentucky Fried Chicken (KFC) outlet in Russia introduced a contactless robot that dispenses food efficiently without the delays of depending on human beings to fulfill orders. A New York-based restaurant, Shake Shack, is increasing the number of drive-through windows and vehicle service lanes to serve more customers within the shortest time.	Chipotle has converted most of its operations to a drive-through service that allows customers to order food using a mobile app and pick it up at their nearest outlet. The company intends to increase its conversion rate from 100 sit-in dining to 1,000 drive-in restaurants by the year 2025.	Golden Horn Estuary, a restaurant in Turkey, has put domes on tables to comply with social distancing rules. The goal of employing this strategy is to reduce interactions among restaurant guests. Starbucks is increasing its physical capacity to handle more customers by building several hundred pickup stores in the next two years to manage the growing traffic of customers who have made digital purchases.

Collectively, they show how these new regulations have influenced the operations of restaurants since the onset of the pandemic.

Reference List

Bowes, P. F. (2020) Productivity improvement in apparel manufacturing. New York, NY: Apparel Resources Pvt. Ltd.

Christner, N. et al. (2020) ‘Prevention for oneself or others? Psychological and social factors that explain social distancing during the COVID-19 pandemic’, Journal of Health Psychology, 4(1), pp. 1-10.

Diego, T. and Noelia, A. (2021) Risk, crisis, and disaster management in small and medium-sized tourism enterprises. New York, NY: IGI Global.

Duque, F. I. et al. (2020) ‘Mapping repertoires of collective action facing the COVID-19 pandemic in informal settlements in Latin American cities’, Environment and Urbanization, 32(2), pp. 523–546.

Gkoumas, A. (2021) ‘Developing an indicative model for preserving restaurant viability during the COVID-19 crisis’, Tourism and Hospitality Research, 6(2), pp. 1-10.

Humphrey, M. (2020) Ways restaurants are getting social distancing right. Web.

Ionica, O. (2019) Throughput accounting in a hyperconnected world. New York, NY: IGI Global.

Ivanov, D., Tsipoulanidis, A. and Schönberger, J. (2018) Global supply chain and operations management: a decision-oriented introduction to the creation of value. 2nd edn. New York, NY: Springer.

Klein, D. (2020) Fueled by COVID, restaurants race to the drive thru. Web.

Mahmut, D., Ali, D. and Donnay, E. F. (2021) Handbook of research on the impacts and implications of COVID-19 on the tourism industry. New York, NY: IGI Global.

McGovern, T. W., Flood, A. T. and Carson, P. J. (2020) ‘COVID-19 policy-making in a country divided: catholic social teaching as a path to unity’, The Linacre Quarterly, 87(4), pp. 407–424.

Min, J., Yang, K. and Kim, J. (2021) ‘The role of perceived vulnerability in restaurant customers’ co-creation behavior and repatronage intention during the COVID-19 pandemic’, Journal of Vacation Marketing, 9(1), pp. 1-10.

Renu, N. (2021) ‘Technological advancement in the era of COVID-19’, SAGE Open Medicine, 5(1), pp. 1-10.

Shin, H. and Perdue, R. R. (2021) ‘Customer non-transactional value co-creation in an online hotel brand community: driving motivation, engagement behavior, and value beneficiary’, Journal of Travel Research, 8(1), pp. 1-10.

Shiver, J. M. and Eitel, D. (2017) Optimizing emergency department throughput: operations management solutions for health care decision-makers. London: CRC Press.

Youn, S., Lee, J. E. and Ha-Brookshire, J. (2021) ‘Fashion consumers’ channel switching behavior during the COVID-19: protection motivation theory in the extended planned behavior framework’, Clothing and Textiles Research Journal, 39(2), pp. 139–156.

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