Microchips are tiny silicon wafers that are essentially the brains that support most of our modern electronics. They can be found in washing machines, smart toasters, refrigerators, and restaurant ordering systems.
Just when their demand was beginning to soar, the pandemic disrupted the supply chain for these microchips.
The pandemic has brought radical changes in habits which have fueled a higher-than-normal demand for microchips, bringing most businesses to a crisis point.
All Restaurants Great And Small Are Struggling
Restaurants simply can’t catch a break. The already embattled restaurant and bar industry is now battling with the chip shortage as restaurants rely heavily on them. Their systems record customer food orders to then pass on to the kitchen.
POS or point-of-sale machines connect servers’ handheld ordering equipment to terminals and printers both in the kitchen and the dining room. With the ongoing pandemic, restaurants are still severely short-staffed nationwide. Add to that the shortage of hand-held machines and terminals and you have a recipe for disaster.
Doug Taylor, pastry chef for Jerry’s Nugget Casino said:
“We’re scratching our heads. We’re back. We had 300,000 people here [in Las Vegas] this weekend. Diners are raring to go, but the computer chip shortage is slowing things down. It’s backing up the flow of traffic if you’re not able to process as many people as quickly. We were in a lull for a year, and now that everything is open 100 percent, it’s a giant bottleneck”.
The companies that manufacture this equipment are scurrying to come up with short-term fixes such as online payment and “scannable tabletop codes” that enable customers to order from their phones
For an industry that has been nearly dismantled and restored after the effects of the pandemic, this chip shortage now stands as another scourge that could permanently damage the industry. It could potentially wipe out thousands of food servers and bartending positions for good.
If more of the work is being placed in the hands of customers such as placing orders and handling the payments, there won’t be a need to refill restaurant staff positions. And with ongoing innovations such as artificial intelligence, robots, contactless ordering, and automation, jobs in hospitality may take a totally different turn.
Prices On The Rise
If slowdowns in the restaurant industry driven by chip shortage are not enough of a challenge, here’s another roadblock that restaurants must overcome, rising prices.
Some suppliers of technology solutions for restaurants have reported an increase in the price of as much as 15%. This is attributed to the higher cost due to “components on the assembly side” and “air capacity and port congestion” when it comes to shipping.
As a result, many restaurants have pivoted in their operations, relying more on new ways of menu ordering. An Arlington, VA company called GoTab is a platform that enables customers to scan a QR code at their table, which then opens up a menu on their phone. On this same platform, they can order and pay. There is no need to order directly from a food server or a bartender. A food runner simply brings the order to the customer.
Due to equipment back-orders from other POS companies, restaurants have turned to GoTab because they have found a way to sidestep the problem with their QR code system.
Chip Shortages Mean Things Will Cost More
The way things look, the supply will continue to struggle to meet the skyrocketing demand. This will push prices higher. Inevitably, these costs will be passed on to the customer.
Many more restaurants have been forced to go contactless in their ordering as a result. It is simply another solution to what appears to be an insurmountable problem.