Foodservice by Design

Team members from PROFITALITY discuss how industrial engineering can be applied to the foodservice industry.


Do You Know the Real Impact of the New Healthcare Law?

As a business leader you are undoubtedly aware that the Affordable Healthcare Act is about to take effect. But that seems to be where most people's understanding of the legislation begins and ends. That's because this legislation is highly complex and to someone outside of Washington, D.C., it seems like a maze of regulations that are indiscriminately and independently linked to each other.

But I wonder if this really matters? The law is going to take effect regardless, so there's not much you can do, right? Wrong. In fact, the worst thing you can do is nothing. It's time to become engaged and educated on the impact of this piece of legislation.

Some in our industry have taken to lobbying their representatives in congress to make sure the politicians understand how some in the restaurant community believe this law will impact their businesses. This is an important part of the process.

If advocacy is not your thing, that does not mean you should sit on the sidelines. Instead, you need to develop a clear understanding of what you as an employer and a foodservice operator will be required to do as the new law comes online. You can use this as an opportunity to further fine tune your business and how you deploy labor in the restaurants. Even if the healthcare legislation did not have significant financial implications for our businesses, we should constantly look to improve and re-invent our organizations to stay relevant and competitive in the marketplace. That's because if we fail to take these steps, no matter the market conditions, our businesses can vanish, much like a dinosaur.

Many foodservice companies have started looking at ways to minimize the impact of this pending law, since they realize that they can't simply pass along price increases to their customers. In fact, given the slow pace of the economic development and consumers' skittishness about their own financial outlook and employment situation, price sensitivity has never been higher and it seems poised to stay that way for a while. So any attempts to offset cost increases by simply raising prices presents a significant risk — one that can impact customer traffic levels.

The ticket to surviving this new legislation has to do with doing a top down review of how foodservice operators – and all members of the supply chain, for that matter – manage their labor, which is usually among the most costly line items in the operating statement.

As a refresher, here are a couple of blog posts where I discuss the concept of labor management: Labor Management Is Not for the Birds and Using Industrial Engineering in Foodservice Design to Make Better Use of Labor.

Bottom line, the advent of the new healthcare law represents yet another opportunity to assess whether you have the right amount of labor deployed at the right time doing the right tasks that will deliver better customer hospitality. The net result of these efforts will result in increases in profits to drive brand growth, which is the ultimate goal.

Maybe we should all thank the government for creating a convoluted legislation that puts us in a quandary, and makes us take action since we are wondering what it could do to our business. Ok, I was just kidding! Don't thank the government, but do take action to fine tune your business.