Welcome to the Post-POS Era

Ever since Monsieur Boulanger hung a shingle selling soup “fit for the gods” in Paris¹, we have dined at the modern restaurant — separate tables, a set menu and prices, and a server to deliver our food. Early restaurants were often family affairs owned and operated by a sole proprietor and his family. Managing both front and back of house, owners cooked the meals and waited tables with precious little time to tend to the business side of the restaurant.

Over time, computers and software in the form of point-of-sale (POS) systems were introduced to the market, came down in cost and matured to include a wide range of features designed to help restaurants run more efficiently. Gradually restaurants evolved into more professional affairs with multi-unit operations run by experienced and dedicated business management.

POS systems largely retained their role as the point where the sale took place, supplanting the stand-alone cash register, all the while continuing to add functions to help manage kitchen operations, labor, accounting and more. Streamlining and optimizing many aspects of the business helped with profits while improving the customer’s dining experience. Operations were automated using metrics, timings, goals, benchmarks and other data-driven techniques so much so that the most sophisticated restaurants today run quite like just-in-time production factories.

This production facility, which after all is as good of a term as any to call the operation, prepares the food to order, i.e., just-in-time, for delivery to a waiting customer to enjoy (hopefully). At most restaurants today, software systems likely helped make your dining experience pleasant by keeping quality product coming out of the kitchen and reducing wait times.

Increasingly restaurants offers customers more choices over how they interact with the restaurant by allowing customers to order for themselves. As customers use their smartphones, in-store self-serve kiosks, and even their TV’s to place orders and pay, the whole concept of the point-of-sale loses its original meaning. There are now many points where a sale takes place. Eventually we should just stop calling them point-of-sale systems! Welcome to the post-POS era.

Figure 1: POS Anywhere

Cloud computing, now being adopted by many industries, is integral to this new post-POS world. The use of the cloud is here to stay and brings advantages to the growing segment of multi-unit operators as customers increasingly adopt self-ordering. These changes all play out on the public internet and are no longer confined to the four walls of the restaurant. Online catering orders, orders to-go, scheduled orders ahead of pickup or just ordering on a smartphone to avoid a long lunch line fit well into a cloud software architecture. No longer is the physical restaurant an island where the POS must reside; rather, in the post-POS era the POS may be located anywhere.

Driven by several factors, not the least of which is the increased use of non-traditional ordering channels, restaurants face greater challenges in their quest for optimized operations. Increased demand of the just-in-time production facility is compressed into an often shorter timeframe. Peak period demand is amplified putting a toll on the production factory to quickly and accurately ramp up output with the available labor resources. Following the usual meal period rushes, demand drops and production needs to slow accordingly. In this business environment, the primary role of POS software changes; the POS should now more accurately be referred to as Production Optimization Software.

In this production-oriented view of the world orders, placed via any number of channels, can be viewed as demand input into the production system. The kitchen, or production line, is optimized by combining production times for individual items and groups of items to specific real time demand, e.g. customer orders, and historical demand data. More staff is needed for a period of time then must be reduced. Raw materials must be managed so as to not have too much inventory, especially of material with a short shelf life, and to not have too little and disappoint customers by failing to meet demand.

Production can be further optimized by orchestrating multiple production stations on the production line, i.e. the kitchen, providing each station with exact production requirements in real-time. More sophisticated KDS, or kitchen display systems, fill some of this role today but still lack key data. Viewed holistically they should be viewed as one seamless component in the total production chain.

On the supply side of the production line, inventory systems ensure raw materials are ordered, arrive on time, and are accurately received. On the output side of production, delivery systems coordinate product being properly and efficiently delivered to customers. And let’s not forget that all of this requires human labor. Labor, one of the major costs for running a restaurant along with cost of goods, can also be viewed as a production resource that needs to be carefully managed to operate the production facility profitably.

So far we have only touched on the basics, the core of running a single restaurant as a just-in-time production facility. We haven’t discussed marketing functions such as loyalty and promotion programs. We haven’t reflected on the influence of social media. We haven’t introduced table management, next generation payments, customer feedback, HR and onboarding, payroll, sensors, line management, training materials, task lists, restaurant discovery and other demand-generation software, or reservations to the mix. There are more components we could add to this list and we haven’t even started to talk about how to view a chain of production facilities. Does there exist a single system that provides every restaurant with everything they want and need in order to manage increasingly complex operations? Of course not!

Restaurants have adopted systems from multiple vendors because no one vendor has done it all. These systems must integrate well to perform but today they rarely do. Achieving tight integration is best done early in the design of any product as it’s harder to “bolt on” at the end. Bolting on integrations is akin to putting the ear on Mr. Potato Head where his nose might otherwise go. No offense intended toward Mr. Potato Head!

Looking at the bloated old POS in this new light, we realize that we are describing not a single POS product but rather an ecosystem or platform. A platform designed from the beginning to specifically model single or multi-unit restaurant production with open integration in mind. There are strong arguments for this new platform to include many features historically associated with a POS system while also including web-based API’s for rapid, tighter integrations to various other products a restaurant uses. Strong, open API’s are necessary to earn such a product platform status.

The post-POS era is only now beginning. Look me up at bill@gustofb.com if you are interested in discussing more regarding this new beginning for the industry and what’s now becoming possible.

[1] There is some debate whether Boulanger deserves credit for the opening of the first modern restaurant. Mathurin Roze de Chantoiseau is thought by some to be the first proprietor.

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