Capacity Planning

Building It Right The First Time: A Guest-Centric, Analytical Approach to Capacity Planning

New Business Strategy

by Susan Dekker, Director, Integrated Insight

New experiences and facilities require a high upfront investment, and often are difficult and costly to adjust after building. And so, strategically building the right amount of capacity for the right guests can save a number of headaches later. This article lays out the major steps to planning capacity using a guest-centric, analytical approach.

1. Understand Demand

Always start with understanding the guest. Market research can determine potential market size, demographics, and estimated annual attendance. Spread the annual demand to the daily level – seasonality due to weather/school schedules result in a very different average and peak day attendance. All of these demand factors will heavily influence the amount of supportable investment.

2. Develop Design Standards

After understanding daily attendance, determine for which attendance level to build. First, define the desired service levels of the provided experience. Service level standards examples include: every guest experiences a marquis attraction, keeping average or max wait times to <X minutes, or guests can experience X total things across their visit. Then, determine how many days/guests you are willing to expose to compromised service levels. The goal is to have few high-attendance days/times with a less-than-ideal experience and many days/times where the development will be more than enough to accommodate demand.

3. Quantify Capacity

The capacity required for any individual business unit or location is typically based on the peak instantaneous demand.

For example, restaurants are busiest at meal periods, whereas ticketing and entry facilities are busiest at park open.Focus on all guest and employee needs such as breakrooms, storage, restrooms and guest services; often it is easy to just focus on the core product and revenue sources.

4. Evaluate Demand - Capacity Balance

Continually iterate to ensure the resulting program is compelling enough to drive the expected demand while meeting the desired service level standards.

Other aspects can influence demand or capacity: marketing can increase awareness (and thus guest demand), mitigations such as brining in food trucks can offer short term flexes in capacity, or pricing can influence demand such as mid-week ticket discounting.

5. Design a Layout

After determining the optimal amount to build, lay out the facilities in a logical, efficient way from both the guest and employee perspective. Simulation is a great tool to evaluate design before physically building. Benchmark industry leaders to see what does and does not work in their park flow. Consider the placement of complementary functions, and balance the guest experience to enhance guest flow and reduce congestion.

Conclusion

Determining the proper amount of capacity requires a rigorous, analytical approach to understanding the guest and their behavior. But, building it right the first time will reduce the cost of rework while maximizing the guest experience.

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Optimizing Restaurant Space To Increase Sales Post-COVID-19

Optimizing Restaurant Space To Increase Sales During COVID-19

Agent-Based Simulation, Business Optimization, Capacity Planning

by Susan Dekker, Director, Integrated Insight

Space management strategies inside restaurants look very different in a post-Covid-19 world. Regulations for social distancing have put restraints on restaurants that have limited party sizes, total dining capacity, and number of guests allowed per square foot. Additional space is needed to increase distance between dining tables, employees in the kitchen, FOH check-in, and waiting areas.

With capacity constraints and space limitations, restaurants need to optimize the utilization of space available to increase daily sales.

Maximize Existing Space
In order to increase space utilization, restaurant operators need to evaluate existing space. A few options to explore include:

- POS Stations: Guest expectations for safety are morphing, and many guests will expect contactless payment options. Consider switching to mobile tablets for both point of ordering and sales. There are plenty of off-the-shelf solutions available. This may reduce the need for the POS nooks currently dispersed throughout many restaurants in the front-of-house space.

- Storage Areas: Evaluate order quantities to reduce the area taken up for storage. The “Pre-Covid” order quantities and frequencies are no longer applicable in today’s operation. Consider ordering lower supply amounts on a more frequent basis to keep only the needed stock on hand. Restaurant operators can convert previously used storage space into guest-facing areas or increase square footage available for social distancing in the kitchen.

- Take Advantage of Available Outdoor Space: Many consumers will feel more comfortable eating outdoors because of the open space. Restaurants can get creative with utilizing outdoor space by converting parking and landscaping space into dining areas to maximize the available outdoor seating. As the weather gets colder, consider adding guest comfort measures such as tents and heaters.

 

Designate Space According to Guest Groups
Guest expectations and desires for the dining experience have changed drastically since the coronavirus outbreak. In order to optimize fulfillment space, restaurants need to identify the volume of dine-in versus carry-out orders. There are likely many more “dine-out” guests that prefer the drive-through, curbside pick-up, delivery fulfilled in-house, or delivery through third party apps.

Each one of these guest types interacts with the restaurant slightly differently upon arrival. Thus, be sure to consider each guest group and account for shifting guest behaviors when re-designing restaurant space.

Dine-In vs. Carry-Out
Restaurants should physically separate dine-in and carry-out guests since they require very different means of fulfillment. If possible, designate an entrance for dine-in and an entrance for dine-out guests. Consider retrofitting an area near an existing door to act as a dine-out counter. Conduct take-out as an independent operation from dine-in.

As an alternative, especially if separate entrances aren’t possible, consider implementing curbside pick-up for carry-out orders. Guests do not have to enter the restaurant which can free up space for a waiting area. Identify a few parking spots as “curbside pick-up.” A sign should clearly state directions and include key information like a phone number and parking spot number so the guest knows what to do upon arrival.

Reservation vs. Walk-Ups
For guests that are dining inside the restaurant, consider how to handle guests with reservations versus walk-ups. Operating by reservation-only gives restaurants the greatest ability to manage guest arrivals. However, be sure to understand the no-show rate, since you can’t fill in no-shows with walk-ins in a reservation-only operation.

If you do accept walk-in guests, look into off-the-shelf apps to utilize a mobile queue where you can text a guest when their table is ready. This allows the guest to wait in their car or other off-site location. You can also utilize apps like Yelp’s waitlist to allow guests to get in line prior to arrival.

Plan for Excess Demand
As more consumers begin to feel comfortable venturing out, demand could begin to outpace capacity and space limitations.  If venues fail to plan for this scenario, it could lead to crowds of people waiting to enter without a way to properly distance themselves.  The two most effective ways to prepare for this demand is to design a socially distanced queue or to utilize a virtual queuing system so guests can wait in their cars.

The video below shows the benefit of providing enough space to allow guests to properly distance themselves while remaining in order of arrival to promote fairness.  Many venues are attempting to do this but provide too few queuing locations and the structure breaks down with excess demand.  Providing ample queuing locations (even with masking tape!) will provide structure for the guests and prevent a dangerous situation from developing.

Virtual queuing is another great option for venues with ample parking.  Many products exist to provide automatic text messaging to guests to inform them when their tables are ready.  This allows guests to wait in their cars out of the elements and eliminates potential crowds.  Some locations are avoiding the software costs by approximating a virtual queue using a host to text guests manually when their table becomes available.

Other Considerations

Inside the restaurant, seating rearrangements will be mostly dictated by regulations, but be sure to understand both employee and customer usage. Does the route to the bathroom require guests to get uncomfortably close to an occupied table? Are there any pinch points where a server must squeeze by a table? Modify seating layouts as needed.

The back-of-house space may need to change. If delivery or take-out continue to be a large portion of sales, you may need to dedicate kitchen space to this operation. Also consider designating space to distribute dine-out orders, which can help reduce errors. Dedicate a leader with responsibility purely for delivery and take-out guests.

Always Provide Excellent Customer Services
Regardless of what changes you make to your restaurant’s physical space, guests should always receive  excellent service. Guests waiting to pick up food still deserve the level of customer experience that dine-in guests experience. Even though they may not be sitting at a table, they are still forming an impression of your business.

A great way to elevate the customer experience is to provide coverings, fans, heaters, or water to outside queues based on the conditions. Adding an entertainment factor to queues and waiting areas can also elevate the experience.

Ultimately, be sure that the operational process is clear to the guest. Customers are likely already stressed given the current outside conditions, and clearly communicating the process can relieve anxiety. Continually update all guest communication channels with the latest policies and procedures. This includes social media, website, physical signs at restaurants, and instructions on Google business listings and third-party apps.

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how companies can understand capacity with social distancing guidelines

How to Determine Operational Capacity in a Covid-19 World

Business Optimization, Capacity Planning, New Business Strategy

by Ben Dubiel, VP,  Integrated Insight

Published June 4, 2020

Now that businesses are re-opening, owners and operators are asking, “Now what?” The safety of patrons and employees is paramount. But mandates to open at 25% to 50% of capacity without specific operational guidelines are perplexing.

Determining the right capacity for your establishment will require attention to four key components:

  1. Physical space: The amount of space you have at your disposal.
  2. Customer density: How close to each other are customers willing to be.
  3. Operational flow: How customers and employees flow through the operation.
  4. Process time: How long it takes to service a customer and how variable it is.

Determining operational capacity can be difficult as it is necessary to understand how all of the disparate parts of the operation interact together. It can also be an iterative process when done in real time. Alternatively, agent-based simulation modeling can help operators view the overall process to determine bottlenecks before a negative impact on guest safety or experience occurs.

Let's look at a case study of a museum to identify opportunities for each key component when determining capacity.

1. Physical space: Beware of changing constraints.

The first instinct when thinking about reduced capacity for a museum is to consider how many guests can be allowed to view exhibits at one time. However, you can see in the  simulation video below that the vertical transport to move from floor to floor is the more limiting factor. The operator is required to reserve one elevator for guests with mobility issues. The remaining elevators can only allow one group per trip to maintain social distancing. These constraints reduce the throughput by almost 70%, restricting capacity to the point that the space available in the attraction is not an issue.

Elevator Queue Line Before and After Social Distancing

Elevators will be one of the most difficult processes to manage as social distancing of six feet inside is almost impossible. However, there is a big difference between an office building, where most arrivals are parties of one, versus an attraction, where people visit in a cohesive group.

Another constraint is the space required for the elevator queue. Most elevator lobbies have limited space. Queue lines will need to be laid out to indicate specifically where to stand and could require 3 to 4 times more space than before. It is possible the queue may extend outdoors and reservations only (no walk-ups) could be the future.

2. Customer density: Everyone has to be somewhere.

Understanding individual components of an experience is a good place to start. But eventually, it all has to work together. Everyone has to be somewhere at any given point in time. Alleviating a crowd in one place may create one in another.

For the museum, elevator queueing space will need to be extended to accompany any excess demand, since this is the bottleneck in the operation. As a perspective, view this articulated density chart that explains the level of comfort people will have in crowded situations.

In the Covid-19 world, customers may want to avoid anything in red.  The clip of the simulation below shows a heat map that measures the average density of guests over time.  The new operation and the limited elevator throughput creates a safe environment in the venue by providing at least 10 square feet per guest around exhibits.

Museum Exhibit Heat Map

3. Operational flow: Some restrictions may apply.

In our example, guests used to be able to flow freely throughout the museum, bouncing from one exhibit to another. However, this flow created cross-traffic where guests were in close contact. In today's operations, this needs to be fixed in order to maintain social distancing guidelines.

Many grocery stores implemented one-way aisles specifically for this reason. It eliminated shoppers facing one another in a confined space. Otherwise, carts make for a good six foot distance barrier when lined up one behind another.

In order to maintain social distancing, the museum needs to transition to one-way traffic. By erecting a barrier that starts at the elevators and continues across the floor, all guests enter one way and experience the museum in a linear direction. The result is a safer experience, but at reduced capacity. As one guest slows down, so do the parties behind them. Passing lanes could be implemented to help guests flow through at their own pace. Interestingly, in the case of the museum, even though capacity on the upper exhibit floors is reduced, the bottleneck that occurs at the elevators actually helps manage exhibit space.

Museum Exhibit Simulation Model

4. Process time: Look for opportunities to offset longer waits.

With social distancing guidelines in place, experiences are going to take longer. The number of people that can fit in an elevator at one time will create longer waits. The number of guests that can use a vehicle in an amusement park may make the queue (real or virtual) longer. The number of visitors that can view an art exhibit at the same time while maintaining safe space will increase the time it takes to see it all. Understanding how long it takes to process one patron, and the variability in that timing, will help determine the capacity limits for each attraction.

Additionally, operators need to look at ways to speed up processes in the system. For example, if food and beverage locations are a potential bottleneck, a "grab and go" system may help alleviate some of the pain.

Here are some ideas to think about: Will adding another show time help spread demand and lower the process time for any one performance? Can extended operating hours better manage overall demand, while being profitable for the business?

Regardless of the business, an operation needs to be viewed holistically. Continuously monitoring the system will ensure that new processes don't revert back to old ones. This amount of focus and attention to detail will serve businesses well as safety is the top concern for today's consumers.

For more information on agent-based simulation and how we partner with brands across the globe, please contact us at info@integratedinsight.com

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