Benchmarking, process mapping and continual improvement analysis of McDonalds and Hungry Jacks

Quality Management Lydie Rebel

31.05.2012

2005 words

Executive Summary
The aim of this report is to analyse the operation management in two of the major American fast food restaurants in Australia, McDonalds and Hungry Jacks. McDonalds is using the Fordism model and divides all of the tasks in specific tasks. Hungry Jacks employs less workers and encourages multi-skilling of its employees. To reduce waste and improve their efficiency, both of the restaurants need to focus on what the customer is expecting, and should implement a lean strategy in their operation process. By following a cellular manufacturing model and a kaizen strategy, the process of serving customers will be optimized and improve continuously. Finally, both of the restaurants need to provide a clean and attractive environment for their customers. With all of these improvements, the restaurants will be able to go from a good customer experience to a great customer experience.

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Table of Contents

Executive Summary ........................................................................................................................ 2 Table of Contents ............................................................................................................................ 3 Introduction ..................................................................................................................................... 4 1 McDonalds and Hungry Jacks as is ....................................................................................... 5 1.1 McDonalds ........................................................................................................................ 5 1.1.1 The strengths: ............................................................................................................ 5 1.1.1.1 Fordism 5 1.1.1.2 Good customer service 5 1.1.2 The weaknesses: ....................................................................................................... 5 1.1.2.1 No multi-skilling 5 1.1.2.1 The bottlenecks 5 1.2 Hungry Jacks .................................................................................................................... 6 1.2.1 The strengths ............................................................................................................. 6 1.2.1.1 Multi-skilling 6 The weaknesses ........................................................................................................ 6 1.2.2 1.2.2.1 Poor customer service 6 1.2.2.2 Important waste 6 1.2.2.3 A dining area not looked after 6 2 McDonalds and Hungry Jacks the potential improvements .................................................... 7 2.1 Meet the customers needs ............................................................................................... 7 2.2 Reducing the waiting time ................................................................................................. 7 2.2.1 Efficient use of technology ......................................................................................... 7 2.2.2 Implementation of a lean system ................................................................................ 7 2.2.2.1 McDonalds 7 2.2.2.2 Hungry Jacks 7 2.2.2.3 Cellular manufacturing 7 2.2.2.4 Kaizen 8 2.2.3 Theory of constraints and the number of workers ....................................................... 8 2.3 A clean environment.......................................................................................................... 8 Conclusion ...................................................................................................................................... 9 References .................................................................................................................................... 10 Appendices 11 Appendix 1 McDonalds - as is 11 Appendix 2 Hungry Jacks - as is 12 Appendix 3 McDonalds - improvements 13 Appendix 4 Hungry Jacks - improvements 14

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Introduction
Whether you like them or not, fast food restaurants are well present in the picture of the modern life. A few years ago, fast food restaurants were only supposed to be fast, but now, they have to be healthier, better quality and faster (Min & Min, 2011). In a world where every seconds counts, McDonalds and Hungry Jacks, also known as Burger King overseas, are on focus to analyse their operation management to deliver a better and faster service. To reach a great customer service, the current situation will first be assessed, and then, possible improvements will be exposed. This report compares the McDonalds and Hungry Jacks restaurants in Circular Quay, Sydney. Those two restaurants have been chosen because they are only a few metres from each other and have then the same potential flow of customers as they are both fast food restaurants, in the same location and offer the same amenities. For a fair comparison, both of the restaurants have been visited several times on peak hours.

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1
1.1

McDonalds and Hungry Jacks as is

McDonalds
1.1.1 The strengths:

Process maps are available in appendices 1 and 2.

1.1.1.1 Fordism While visiting the McDonalds restaurant, it has been noted that a large number of workers where involved and they all had a specific and limited task to do. The standardized model of dividing a task in different smaller tasks is called Fordism, invented by Henry Ford for his Ford plants, in the beginning of the 1900s (Holland, 2005). This model allows the restaurant to enjoy a continuous flow of production, which reduces the average activity time and increases the specialisation of the workers (Seddon & ODonovan, 2009). The service looks well organized, where everybody knows what he has to do. 1.1.1.2 Good customer service It also has been noted that all of the workers directly helping customers at the counter where polite and smiling people. The strong point about the model McDonalds applies is that the same person is in direct contact with the customer, and they despite the pressure to be quick, they still manage to be helpful. As quality is all about the customer (Mauch, 2010), it is clever to put a single member of the chain in contact with the customer and focus the training of this person on a perfect customer service. 1.1.2 The weaknesses:

1.1.2.1 No multi-skilling With the use of this model, workers are not influenced to multi-task. Workers are only conditioned to process one special task. Because of these repetitive tasks, workers tend to fall in a boring routine (Hindle, 2009) and lose interest in their job. Also, because it involves high specialisation and a focused training (Seddon & ODonovan, 2009), workers may not be able to take the place of another worker if needed. If there are 3 people trained to work with the register, and 1 is sick, someone else will need to be able to use the register. McDonalds needs to train all of the workers on different tasks or the system might not be working if one worker is missing and no one can take his place. 1.1.2.2 The bottlenecks To keep good quality burgers, McDonalds has chosen to implement a Just-In-Time system in its kitchen (Atkinson, 2005), where the burgers are made after a customer orders them, it is called the Made for You Kitchen (Lean Simulation, 2012).This system is relevant for the preparation of food, as the burgers are freshly assembled, but in a fast food restaurant, the food needs to be ready quickly. The issue is that this system has created a bottleneck in the preparation of the order, an operation taking longer than the others and slowing down the process (Boyer & Verma, 2010). The bottleneck of the process is the making of the burger in the kitchen, which takes longer than putting all of the other elements of the meal together.

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1.2

Hungry Jacks
1.2.1 The strengths

1.2.1.1 Multi-skilling During the visits in Hungry Jacks, it has been noted that the restaurant uses a very different framework than the one in McDonalds. Indeed, as shown in Appendix 2, there are few workers in behind the counter, and the same worker takes the order, prepares the drinks, grabs the chips and makes the ice-cream. At the same time, a different worker makes the burger in the kitchen area. The restaurant would be able to be functional with only 2 workers. 1.2.2 The weaknesses

1.2.2.1 Weak customer service Having a lot of different tasks to do at the same time can be quite stressful, especially because in a fast food restaurant time is the main focus. This high level of stress has been felt in every visit as the worker had poor customer service skills. Whereas in McDonalds a full training can be given to the worker in direct contact with customers, in Hungry Jacks, the same worker has to be trained on so many things that it feels like the customer service aspect has been neglected. This weakness could strongly damage the perceived quality of the service by customers. 1.2.2.2 Important waste Different wastes can be analysed, but the focus here in on the motion aspect. Indeed, waste happens when a product or person moves to different places; meanwhile, no value is added to the process (EPA, 2011). As shown in Appendix 2, the same worker has to get all of the elements of the order himself, holding the bag and moving around the kitchen. This process is a large waste of time and energy for the worker, which can be noted after what in the poor customer service. 1.2.2.3 A dining area not looked after When visiting the Hungry Jacks restaurant, several times, the eating area was not looked after, and extremely dirty, with garbage everywhere. It could make the customer wonder how clean is the kitchen in which my food is cooked? and the quality of the restaurant becomes then very poor. The perceived quality of a service is strongly intangible and varies a lot depending on the customers (Boyer & Verma, 2010), and some customers might get very uncomfortable about an unclean eating area and not visit the restaurant again.

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McDonalds and Hungry Jacks the potential improvements

It has been chosen to analyse the possible improvements according to the Appendices 1 and 2, when and why the customer leaves the store. The customer can leave the restaurant or be unsatisfied because there is no food that would attract him, or because there is a too long waiting time or because the eating area is not appropriately cleaned. The improvements will be shown in practice in the appendices 3 and 4.

2.1

Meet the customers needs

To reduce the probability of the customer leaving the store before ordering anything, the menu needs to be comprehensive and attractive. In order to understand the customers needs, Wendys, an American fast food restaurant chain has implemented some tests on its customers to understand what they want, from the burger to the shape of the pickles (White, 2011). Furthermore, fast food restaurants are targeted by health association because of the lack of healthy options in the restaurants (Min & Min, 2011). McDonalds has been working on it, and offers some salads and some pieces of fruit, however, Hungry Jacks is more limited in term of healthy food. The only healthier option available when visiting the stores was a salad instead of the chips if the customer pays $2.5 extra. Both of the restaurants need to focus on offering more healthy options and prove that fast food is not necessarily bad food.

2.2

Reducing the waiting time

2.2.1 Efficient use of technology It has been noted that none of the restaurant where using technology to save time in the ordering process. In Europe, McDonalds has put in place tactile screens where customers can place an order and pay with their card (Duperron, 2011). With these computers, customers have to pay with their credit card, and a receipt is then printed with a number. A worker will call the number when the order is ready. Some people might not like the computerisation of the service, but some people, in a hurry on a lunch break, would find the process attractive and efficient. 2.2.2 Implementation of a lean system

2.2.2.1 McDonalds Thanks to a lean system, workers are not focusing on only one task anymore, but are able to do different tasks of the process (Hindle, 2009). By implementing such a system, McDonalds should be able to reduce the amount of workers involved in the process and save costs. McDonalds is already saving a lot of waste in its process as workers do not have to walk around the restaurant to complete an order, but it could now save money of the wages and still be efficient. 2.2.2.2 Hungry Jacks Hungry Jacks needs to organise the process and add workers. By doing so, the restaurant will be able to divide the process in smaller tasks and be able to help more customers quicker. The process would then save a lot of waste by not having workers walking around the restaurant with the bag in the hands to get everything needed. Furthermore, workers will be able to focus on their tasks only, and feel less pressure, as they will be part of a system all working together. 2.2.2.3 Cellular manufacturing Cellular manufacturing relies on the organisation of the equipment needed according to the process (Alony & Jones, 2008). Thanks to this model, both of the restaurants should organise the area behind the counter according to the different steps in the process. Because making the burger takes longer, it should be place at the end of the process. The equipment should physically form a chain accordingly with the process. Drinks should be available first, as they do not take long to be 7/14
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serve, then the ice-creams, then the chips and finally the burgers. By doing so, the process will flow smoothly, reducing motion and improving efficiency. 2.2.2.4 Kaizen Once both of the restaurants will have implemented a lean system properly, they will need to focus on a Kaizen system, which allows continuous improvement (Seddon & ODonovan, 2009). To implement Kaizen, a strong communication will be needed. In the different visits, it has been noted that none of the workers are able to communicate, they all are under pressure and tend to yell at each other. In order to reach a Kaizen system, all of the workers will need to collaborate and work with each other (Hindle, 2009), not narrowly do their own tasks. Implementing a Kaizen system will help the chains to become innovative and more effective. 2.2.3 Theory of constraints and the number of workers Both of the restaurants are implementing the just in time system in their kitchen, which is the best solution to provide freshly made food. However, in both of the kitchens, making the burger is the bottleneck process. Theory of Constraints involves the reduction of any bottleneck to make the process smoother and therefore quicker (Pegels & Watrous, 2004).They both need to add a worker in the kitchen to make the process smoother and reduce the waiting time after the bottleneck. McDonalds could train one of the workers to do 2 different tasks, and put the worker available in the kitchen to make the burgers too. Hungry Jacks needs to add workers to the process to make it faster, and needs more people involved, a worker should be added in the kitchen too.

2.3

A clean environment

As mentioned earlier, during several visits in the Hungry Jacks restaurant, the eating area was not looked after and in very bad conditions. As a clean establishment is very important in delivering a quality customer experience (Ross, 2006, Hungry Jacks needs to spend more time, or add a worker to look after the eating room. By looking at the eating room, the customer might emit some doubts about the cleanliness of the kitchen, and leave the restaurant on a very negative note.

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Conclusion
Although they have a similar profile, McDonalds and Hungry Jacks implement a different process to serve customers. McDonalds seemed to be the most efficient of the two, but also employs a lot of workers, Hungry Jacks employs less people at the same time, but the customer service is poor. Both of the restaurants have improvements to make towards a lean system to improve efficiency but thanks to some improvements and a kaizen system they will be able to reduce waste and improve continuously to become more and more competitive.

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References
Alony, I., Jones, M., Lean supply chain, JIT and cellular manufacturing The human side, Journal of Issues in Informing Science and Information Technology, accessed 28th May 2012, http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1500&context=commpapers Atkinson, C., 2005, McDonalds, a guide to the benefits of JIT, Inventory Management Review, 8th November, accessed 28th May 2012, http://www.inventorymanagementreview.org/2005/11/mcdonalds_a_gui.html Boyer, K K, Verma, R, 2010, Operation and supply chain management for the 21st century, Cengage Learning, Ohio. Duperron, A., 2011, McDonalds remplace ses caissiers par des crans tactiles (Tactile screens takes the place of the cashiers in McDonalds own translation), Sales and Marketing, Express, 17th May, accessed 25th May 2012, http://www.express.be/business/fr/marketing/mcdonalds-remplaceses-caissiers-par-des-ecrans-tactiles/146003.htm EPA, 2011, Lean thiking and methods, Lean Manufacturing and Environment, United States Environmental Protection Agency, 10th November, accessed 27th May 2012, http://www.epa.gov/lean/environment/methods/index.htm Hindle, T, Lean production, The Economist, 19th October, accessed 25th May 2012, http://www.economist.com/node/14299730 Holland, J., 2005, Fordism/Post-Fordism, Globalization and Autonomy Glossary, 6th May, accessed 27th May 2012, http://www.globalautonomy.ca/global1/servlet/Glossarypdf?id=CO.0021 Lean Simulation, 2012, Mcdonalds lean food preparation system made for you, Lean Simulations, 30th April, accessed 25th May 2012, http://www.leansimulations.org/2012/04/mcdonalds-lean-food-preparation-system.html Mauch, P. D., 2010, Quality management Theory and application, CRC Press, Taylor and Francis Group, Boca Rato, Florida. Min, H., Min, H., 2011, Benchmarking the service quality of fast-food restaurant franchises in the USA A longitudinal study, Benchmarking: An International Journal, accessed 25th May 2012. Pegels, C. C., Watrous, C., 2004, Application of the theory of constraints to a bottleneck operation in a manufacturing plant, Journal of Manufacturing Technology Management, January, accessed 27th May 2012. Ross, G., 2006, Five tips to enhance the fast food customer service experience, All Business, 28th July, accessed 24th May 2012, http://www.allbusiness.com/sales/customer-service/38762621.html#ixzz1vlqa7TiD Seddon, J., ODonovan, B., 2009, Rethinking lean service, UK Lean Conference, July, accessed 26th May 2012, http://www.ukleanconference.com/files/john_rethinking_lean_service.pdf White, M. C., 2011, Wendys beats Burger King By rounding its hamburgers?, Time Moneyland, 21th December, accessed 24th May 2012, http://moneyland.time.com/2011/12/21/wendys-beats-burger-king-by-rounding-itshamburgers/#ixzz1vm9Ifg9x 10/14
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Appendices
Appendix 1

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Appendix 2

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Appendix 3

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Appendix 4

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