5 Ways IoT and AI Automation Are Streamlining Restaurant Operations

The NRF Big Show is increasingly featuring restaurants, and one of the hot topics for 2024’s show was the potential and adoption of the Internet of Things (IoT) in the restaurant industry. 

There’s no doubt that adoption is ramping up. According to Data Bridge Market Research, the IoT market among food service providers is growing at 9.50% annually and expected to reach 10.74 billion dollars by 2028. And it’s easy to see why. IoT sensors, in conjunction with advances in artificial intelligence (AI), provide restaurant operators a range of potential use cases, including maximizing labor efficiency, improving the customer experience, maintaining food safety compliance, managing inventory, and saving on energy usage.

In this article, we’ll explore how IoT and AI automation is streamlining operations for major restaurant operators and look at some of the potential benefits and use cases. 

How the Labor Shortage is Driving IoT Adoption and Automation 

It’s no secret that the restaurant industry has been struggling with a historic labor shortage. High staff turnover has negative impacts on customer satisfaction and the bottom line. One example is in cleaning staff. Cleanliness, not only in the restaurant but in areas such as the bathrooms, is an important part of the customer experience. Customers don’t want to eat in a place that isn’t clean. Yet high turnover and chronic shortages of workers make it difficult to maintain the clean facilities needed for a good customer experience and strong restaurant sales.  

To combat this, more companies are introducing automation into routine tasks to improve efficiency. For instance, IoT sensors on soap dispensers and toilet paper rolls can streamline the refill process and save staff time. Instead of following an hourly checklist, employees only need to perform tasks when alerted by the sensor.   

This shift towards automated triggers over regular checklists is happening across the restaurant, not just in customer restrooms. IoT sensors, AI and automation are increasingly being used for food safety data, energy monitoring, machine maintenance, and more. Instead of regular manual checks, sensors and AI determine when an inspection is necessary. For example, instead of checking coffee sensors hourly, machine-detecting temperature anomalies alerts staff only when there's a problem. This approach not only saves valuable time for managers but also allows them to focus on improving other areas, ultimately enhancing customer satisfaction.  

This trend is gaining momentum as it addresses the labor issue in two ways, by increasing the efficiency of employee time (and therefore labor cost) and improving job satisfaction by eliminating monotonous tasks. Transitioning from scheduled paper checklists to event-driven sensor-driven alerts can significantly enhance efficiency. Many items on manual checklists are checking for infrequently occurring issues, and it’s more efficient to just have a sensor that alerts when there is a problem. Employees don’t want to spend their time repeatedly checking thermometers and paper towel rolls; automation allows them to focus their energy on higher-value tasks.  

Also, freeing up employees from these tasks not only helps improve their job satisfaction, potentially increasing retention, but allows them to spend more time engaging with customers. Staff can speak with customers, helping provide a better and more human experience, providing them with a high-level of service, rather than scrambling to complete a checklist.  

However, this doesn’t mean store checklists and audits are obsolete. While they can be reduced, some items will still require audits. Electronic store audits can provide data that can then be fed into analytics and AI tools to further improve your processes. If you’re interested in a modern user-friendly audit software, check out Agilence Store Audit.  

4 IoT Sensor Use Cases for Restaurants 

1. Food Waste and Inventory Management 

Effective inventory management and food waste reduction are critical challenges for restaurants, especially considering the short shelf life of many ingredients used. Fresh seafood, fruits, and vegetables, often procured daily, must be used quickly to maintain their quality. While some ingredients can be utilized the following day, a significant portion of unused produce inevitably ends up as waste. This waste inflates food cost, one of the primary contributors to a restaurant’s prime cost and profitability. 

IoT-enabled kitchen appliances can offer real-time insights into storage conditions and inventory levels. These smart appliances can analyze data on product usage, expiration dates, and storage temperatures, helping to optimize inventory levels and minimize waste. 

For instance, smart refrigerators equipped with IoT sensors can monitor the freshness of stored items, alerting staff when ingredients are nearing their expiration date. This allows kitchens to plan meals around these ingredients, thereby reducing waste. Similarly, smart storage units can track inventory levels, automatically updating in real time as items are added or removed. This provides kitchen managers with an accurate, up-to-the-minute overview of their stock, enabling them to make informed purchasing decisions. 

This data can also be fed into an analytics tool such as Agilence Analytics for Restaurants to better plan based on past consumption patterns, ensuring that purchasing aligns closely with actual needs. This not only prevents overstocking and subsequent waste but also ensures that kitchens are adequately supplied with the ingredients they need. 

2. Food Safety and Regulatory Compliance 

Restaurants are often faced with the dual challenges of managing food waste and complying with the Food Safety Modernization Act (FSMA). IoT devices can monitor and record data on kitchen equipment and ingredients, helping manage waste effectively and ensure food safety. Alerts and notifications from IoT systems also enable proactive responses to potential issues, aiding in compliance with FSMA regulations. 

 While IoT sensors don’t obviate the need for proactive and well-trained staff to meet food safety guidelines, they can assist with additional monitoring and help ensure that equipment is in good shape. As major restaurant chains focus on preventative food safety measures, IoT technologies can help operators ensure quality beyond the restaurant itself but across the supply chain and production process. Sensors can monitor production states, shipping times, and storage conditions, ensuring food is kept in suitable environments. Real-time temperature tracking assures effective cold chain management and prompts necessary safety inspections. In the packaging sector, IoT-tagged packages simplify trace-and-track processes. 

3. Maintenance Automation 

According to a report by Deloitte, predictive maintenance reduces breakdowns by 70% and lowers maintenance costs by 25%. Connected devices can help automate restaurant equipment maintenance, kitchen appliances can be monitored and managed without constant human supervision. This not only eases the workload of culinary teams but also enhances efficiency across the board. Additionally, IoT systems can trigger automatic alerts for maintenance requirements, part replacements, or when supplies run low, ensuring smooth restaurant operations. 

Typically, employees need to monitor the temperature and energy consumption of ovens, deep fryers, refrigerators, walk-in freezers, and HVAC systems, among others. In a busy restaurant environment, these frequent checks can disrupt workflow and lead to additional expenses. However, by integrating IoT devices within kitchen equipment, these essential data points can be automatically collected and analyzed. The insights generated are then relayed to the restaurant manager through a mobile app. This use of IoT not only optimizes workflow and minimizes costs but also significantly reduces the risk of system failures, thereby maintaining consistent quality of service. 

4. Energy Savings 

Restaurant appliances constitute a significant portion of restaurant energy expenditure. Keeping track of energy usage and reducing associated costs can be challenging, particularly with older kitchen appliances that are not energy efficient and are prone to unexpected breakdowns.  

IoT sensors and Energy Management Systems gather, analyze, and disseminate data on a restaurant's power consumption. For instance, one Pizza Hut franchisee reportedly expects to reduce its average monthly energy usage by 18% and save $2 million in energy costs using IoT. Similarly, smart appliances equipped with IoT sensors can optimize energy management in restaurants. Fryers fitted with smart sensors maintain optimal oil temperatures and alert cooks when food is cooked to perfection.  

IoT devices can also help identify and standardize energy usage per item at the production level. This visibility can lead to significant reductions in overall energy consumption by identifying and repairing high-energy-consuming appliances. Sensors can also prevent unnecessary energy wastage in situations of human error, such as if heating is left on when the restaurant is closed. 

How Agilence Can Help 

The data generated by your connected devices, as well as other data sources such as POS, inventory, video data, and more, can all be fed into Agilence Analytics to get a high-level overview of what’s happening across your locations. Analytics can use your sensor data to identify issues that need resolution, by comparing the data you receive to set levels and sending alerts to managers or other staff when the thresholds for these levels are exceeded. You can also use Agilence Analytics for Restaurants in a range of other ways to help identify theft and fraud, control food costs, improve labor productivity, and more.  

Agilence Case Management and Store Audit are powerful tools that can significantly aid restaurants harnessing automation. They can automate tasks by creating cases from alerts triggered by issues or events, facilitating performance monitoring, identifying hardware problems, and managing follow-up tasks.  

Agilence Case Management allows for the automatic creation of cases when an audit fails on certain questions, triggering an investigation. It also automates incident reports creation when alarms or safes are triggered, which can indicate potential security issues. If a specific number of anomalies are detected, it can initiate an audit or case, automatically creating tasks for follow-up. 

On the other hand, Agilence Store Audit can execute checks that sensors may not be able to perform, triggering secondary checks when a sensor alerts. It also enables automatic task creation for maintenance personnel if damage is detected during an audit, ensuring timely repairs. 

Beyond tangible operational aspects, these systems also track and audit intangibles like employee behavior and satisfaction. They provide insights into why employees might be stealing or underperforming, or why certain stores aren't performing well. This data can then be linked back to what restaurants are doing with employees, such as training and management programs. These tools can analyze patterns in workplace accidents or employee thefts to identify common denominators, helping find causes and solutions, ensuring proper training, and following procedures.