Process Inventory issues and operating designs

The in process stock point performs the classic inventory function of decoupling activities in a sequence so that each may be carried on relatively independently; that is, patty production can run efficiently at a constant rate for a period of time whereas the rate of hamburger assembly can be adapted to the demand variations of the more customized burgers. Also, Burger King uses the microwave oven to reheat, providing some flexibility in combination with the broiler.

By contrast, the completely standardized McDonald’s product can be produced on a balanced production line to finished goods stock. Both process flow systems are rebalanced with different team sizes for varying production rates to match requirements at different times of the day.

One of the results of the two process flow configurations is in the four versus two minute waiting plus service times offered to customers. Customization, no matter how small, exacts a price. McDonald’s can offer a lower price and faster service by standardizing.

It is interesting to note that Burger king, which offers a degree of customization, chose a continuous chain broiler technology that cooks very burger for exactly 80 seconds, and McDonald’s, the epitome of standardization, chose the more flexible grill technology. The continuous broiler needs only loading and unloading, whereas the grill must have constant operator attention to cooking times and turning the patty, which requires timers with signal lights and buzzers.

Both technologies have their positive attributes. The continuous broiler requires somewhat less attention and, at low loads labor. The cooking time flexibility of the grill allows a rare – medium well done choice (which is not offered) and the ability to cook different thickness of patties or other items such as eggs.

Operating Decisions:

Another impact of Burger King’s make to order policy is in the system required for controlling orders. Special requirements must be communicated to those workers who must customize the product. Thus, their earlier microphone and later TV screen systems for conveying the details of orders to all concerned were necessary to implement the customizing positioning strategy. These strategies for dealing with special orders are very important, for if the special orders are mixed up, customer dissatisfaction results and there might be increased scrap. For McDonald’s, with no customization no added communications system is necessary. Customers can even change their minds at the last minute since all that it requires is for the server to switch a Big Mac for a Hamburg in the bins and charge the correct price.

An important operating decision is in setting the short term capacity levels for the system. Since the physical configuration is set by its design and cannot be changed in the short term, short term capacity is determined by crew scheduling. Although both firms seem to have equivalent information on which to base these decisions, the bottleneck operation at assembly for Burger King seems to pose additional problems in providing the required capacity at peak loads – a direct result of the “Have It Your way” positioning of the system.

Quality control is of extreme importance to both organizations, as demonstrated by the lengths to which each goes to ensure the implementation of this element of operations strategy. In a food service organization, quality extends a beyond the characteristics of the physical product itself to include the way the product is served and the appearance and cleanliness of the place in which it is served. To control all these aspects of quality , both McDonald’s and Burger King use regular, unannounced visits by staff members from headquarters to prepare detailed reports concerning the service, quality characteristics of the food, and cleanliness of the restaurant inside and outside. McDonald’s area supervisors, or example, typically make four unannounced visits per month to each unit, sampling all meal times, both during the week and on the weekend. Every aspect of the quality of operations is scored and appropriate comments are recorded.

There is an emphasis on training managers to achieve these and other goals through McDonald’s Hamburger University. The first campus was at Elk Grove, Illinois, but new units have even seen installed overseas such as the one in Tokyo. Burger King University in Miami, Florida, has similar objectives.