Editor’s note: As we get toward the end of 2023, RFIDJournal.com is looking back at some of the top stories that we published in the last year.
After testing and deploying a radio frequency identification (RFID)-based solution to manage inventory at its Chicago-area restaurants, fast-casual restaurant Chipotle is now in the process of expanding the system to all of its locations nationwide. The chain is leveraging Mojix software and Zebra Technologies handheld readers at each of its approximately 3,200 dining locations, in order to bring visibility to its ingredients, ranging from beverages to produce and meat, as well as all non-food items.
The rollout follows a years-long program in which the company first deployed the technology at 200 restaurants in the Chicago area, according to Carlos Londono, Chipotle’s VP and head of supply chain. The company also piloted the technology to monitor ingredients moving through the distribution center that serves those restaurants. Chipotle has since worked with suppliers to ensure they could apply the RFID tags to products as part of their own operations.
Chipotle is deploying RFID technology at all of its U.S. locations.
As one of RFID’s early adopters in the restaurant sector, Chipotle says it is driven by its enthusiasm for innovative technologies to improve service and food quality, as well as the unique nature of its focus on fresh, locally sourced products. The company leverages ingredients from local farms and food suppliers, making the supply chain more complex than those of most chains. It has employed a measured and phased approach to its RFID rollout, and it reports that the deployment is taking place with few glitches.
Londono says the technology has helped Chipotle address supply chain challenges caused by COVID-19 regarding the reopening of restaurants where RFID was in use. Chipotle operates approximately 3,200 restaurants in the United States, as well as in parts of Europe, specializing in Mexican-style tacos, salads, bowls and burritos made to order in front of customers. It places a premium on fresh ingredients that may differ from one local site to another, so it needed a technology-based solution that could bring visibility to the ingredient supplies at each restaurant.
Testing began in 2020 (see Restaurant Chain Tracks Food Ingredients with RFID), at which time Chipotle applied Avery Dennison Smartrac tags to track meat and dairy products, along with avocados. The company then began rolling out RFID tracking to other products. Most restaurants in the United States and worldwide still track ingredients and supplies manually or via barcode scans. Employees may conduct a visual or scanned inventory count weekly or monthly, while individual crates of products are often not uniquely identified. Therefore, restaurant managers must frequently operate based on estimates of how much of each product they have available.
Overcoming Misconceptions Around RFID
Chipotle wanted an automated system with a unique ID number for every product or ingredient, so that it could eliminate the need for such estimating. First, however, the company had to test the technology—and it had some doubts. The piloting helped to overcome some apprehensions about RFID, Londono says. When workers tagged every case of product at the Chicago-area distribution center, they were surprised at the results. “We had a ton of misconceptions,” he recalls, “that the tags would be really expensive, that they don’t read very well when they’re inside a cooler, or that they don’t read when there are liquids present.”
The company worked with Avery Dennison on the tags and their application, and Londono says the partners found the tags could be read reliability and predictably no matter how products were stored or transported. “We didn’t have any of those complications,” he states. “The technology has had absolutely no limitations [at Chipotle’s operations], so we were very personally surprised by that.” Following the Chicago pilot, the company planned a nationwide rollout, and it thus began talking to suppliers.
At each restaurant, Chipotle’s staff are equipped with handheld RFID readers that they use as goods are received.
Chipotle uses around 330 categories of items at its restaurants, including food, beverages and indirect non-food items. Within the food category, ingredients are divided between refrigerated and non-refrigerated goods. The restaurant opted to tag all categories, Londono says, adding, “We decided to go to all of our suppliers and all of those three categories and just say, ‘Hey, listen guys, we’re embarking on this journey. We would like you to join us.'” Most suppliers were enthusiastic, he says, and many were already considering or even using RFID for their own purposes.
RFID technology poses some challenges, depending on the form factor on which tags are applied. One example for Chipotle was regarding the mesh bags of onions. “It’s been a little bit of a challenge to get that RFID tag to stay on there,” Londono explains. For the past two years, however, most focus has been on onboarding suppliers. Companies that provide ingredients to the restaurants vary widely, from those with extremely sophisticated production processes capable of automating label application, to local farmers near specific restaurants who sell specialized goods in small quantities.
To meet the specific needs of each supplier, Chipotle has worked on a variety of technology-based solutions. The company has purchased special printers that can be deployed on a supplier’s production line, while others are manually applying tags to products as they are harvested and prepared for shipment to a neighboring restaurant. Typically, Chipotle has provided the necessary tag printers on the supplier’s behalf, while that supplier purchases its own software.
“Every supplier is like a snowflake,” London says, in terms of its unique environment and needs. “They all have their own software. They all have their constraints. They have their own things to consider.” As a result, he adds, “For the most part, it’s been released successfully. There’ve been a couple of folks that have struggled a little bit, but we’re essentially 98 percent of the way there in terms of our suppliers.”
How the Technology Works
At each restaurant, Chipotle’s staff are equipped with handheld RFID readers that they use as goods are received. Each day, workers capture all tag IDs on newly received crates of food, which are linked to details about those products in the Mojix software. Traditionally, this process had required that workers scan barcodes, and it consumed approximately 30 to 45 minutes of labor time each day. Now, London says, that same task can be completed within seconds.
Carlos Londono
Once a day, staff members conduct inventory counts of critical items that have short expiration dates. In that way, they can be sure ingredients are used shortly after being received. On a weekly basis, the employees also conduct a full inventory count of all goods onsite. Both tasks are completed via an RFID reader, and workers can access the Mojix app on the device, trigger the inventory count and walk through the cooler or back room capturing tag IDs. The software updates the data and enables users to view which items have the nearest expiration dates, so that they can be used first.
The system can flag anything that might have already expired or been recalled, and those items can be located within seconds. In the coming months, London says, Chipotle plans to deploy the solution at its 19 distribution centers throughout the United States. “That’s one of the next levels of evolution for us,” he states. “We want to continue to push it up the supply chain, to eventually get to the distribution location, to the supplier and potentially even to the farm,” so that tags can be read as soon as products are harvested or manufactured. Data can then be shared between members of the supply chain.
The restaurant has already gained some benefits, Londono reports, including increased efficiency at the restaurant level. “As soon as workers start using it,” he says, “they absolutely love it,” due to the time savings in inventory-counting tasks. For customers, he notes, “It means that the food is just as fresh as they would want.” Because ingredients are less likely to go out of stock or expire before use, he adds, “It’s going to translate into much better service at the restaurant level.”
Chipotle’s deployment indicates the future for RFID solutions in the restaurant market, according to Chris Cassidy, Mojix’s president. “This is predicated on food safety and quality, first and foremost,” he says, “and driven by the compliance requirements of FSMA [Food Safety Modernization Act] 204.” He reports that Chipotle has taken item-level intelligence beyond current compliance requirements with its use of RFID technology, adding, “The help of Mojix created true end-to-end supply chain visibility that drives inventory and replenishment optimization.”
Looking to the Future
Cassidy expects more solutions like that ahead. “As demand for fresh food safety grows,” he states, “and as consumer demand for food origination data also increases, Mojix is providing scalable solutions that leverage serialized data to drive actionable insights… from farm to fork.” Mojix is partnering with Google to tap the power of artificial intelligence, Cassidy says, which will provide users with early detection, traceability, predictive analytics and recall management.
Chris Cassidy
Chipotle may next look into tracking details such as sensor-based conditions, along with the locations of assets at each restaurant. Since RFID readers are already in use at every site, Londono predicts, the addition of tags will be relatively straightforward. “Now, all of a sudden, we have versatility to do a bunch of other things,” he says, “and so we will eventually look at management of all the equipment in the restaurant. We think that these are the first steps of the journey, [but] there’s a lot more to do.”
In the meantime, the company is sharing its experience with other businesses, including its competitors, some of which tour Chipotle’s sites to view the technology in action. During the end of the COVID-19 lockdowns, the chain leveraged its RFID solution to reduce the impact of supply chain issues. Londono recalls how some food-based factories ran short of supplies as they tried to ramp up production to meet demand, while others overshot their inventory targets.
“Customers were coming back to the restaurants in unexpected ways,” Londono says, such as surges following new announcements from the Centers for Disease Control and Prevention, which could have left the chain unprepared to accommodate the sudden influx of hungry patrons. “Now, with RFID, we have 100 percent inventory accuracy, so every case that is in the restaurant will be accurate.”
Key Takeaways:
- Since piloting the technology in the Chicago area, Chipotle has found that RFID has improved its efficiency and helped to ensure products are consumed while fresh.
- In the long term, the chain may further leverage the technology to attain asset- and sensor-based data regarding the conditions at restaurants or throughout the supply chain.