Chapter 10 – Page 5 – The OM Blog by Heizer, Render, & Munson

OM in the News (and Video Tip): Formula 1 Pit Stops and the Gilbreths

Frank and Lillian Gilbreth, the pioneers of time and motion studies, would smile with approval as they watch this 2-minute video comparing F1 racing pit stops in 1950 and today. If you follow F1 racing, it comes as no surprise that pit stops have been reduced to an amazing 2 seconds!

The role of the pit has changed dramatically over the years, writes OR/MS Today (Oct., 2014). For much of racing history, cars would only stop in the event of problems. Scheduled tire changes or fuel stops were not part of the equation. But in 1982, an analytically-minded UK race team focused on 2 important facts. First, softer tires stuck to the track better than harder ones, though they wore out more quickly. Second, less gas in the tank translated into a lighter, faster car. Calculations showed that time spent changing tires and refueling was more than offset by performance on the track.

The idea quickly caught on, making pit stops–and their efficient execution–an integral part of racing. But in 2010, when F1 racing instituted a no refueling policy (out of safety concerns), the stage was set for lightening-fast tire changes. Achieving a 2-second tire change required optimizing the entire process. Analysts looked at everything from the design of wheels nuts (1 per wheel on F1 cars), to special self-positioning pneumatic guns that remove and tighten each nut. They then turned their attention to the pit crews. Teams of 3 work on each wheel, one to remove the old tire, one to position the new one, and one to operate the gun. Their moves are choreographed down to the position of their hands and feet from start to finish. With 2 jack operators and other workers, as many as 20 people crowd around a car during a pit stop–for 2 seconds of work.

What a great example of methods analysis (see Figures 10.5- 10.7) for Chapter 10.

Classroom discussion questions:

1. Try to create an activity chart for the pit stop from the video, using Figure 10.6 and Solved Problem 10.1 as models.

2. How does this differ from the NASCAR pit stop described in the Global Company Profile that opens Chapter 10 on pages 396-7?

OM in the News: Looking Back–and Forward–on Productivity

Frederick Taylor revolutionized manufacturing at the turn of the 20th century with a simple insight. Most manufacturing work was a sequence of physical motions. You would load coal onto a shovel, carry it to a furnace, throw it into the furnace, walk back to the coal pile and repeat. In a time and motion study, he quantified each step and how long it took. Then he analyzed how to improve the whole process. He noted, for example, that a typical worker could lift 21 pounds for maximum efficiency. Workers varied in size and strength, but on average this weight balanced the number of shovel lifts per minute against the volume per lift. In those early days, workers used the same shovel for all materials, regardless of the density of the stuff being lifted, so less weight was being lifted for the less dense materials. Taylor’s elegant and simple solution — bigger scoops for shovels used to haul the less dense materials — illustrates how careful analysis of a specific work process can increase productivity.

Today, his time and motion studies seem antiquated. Phone calls and memos have replaced shovels and picks for many workers. “Yet despite its association with early factories, a modern version of the spirit of Taylorism is sorely needed,” writes Harvard’s Prof. Sendhil Mullainathan in the New York Times (Sept. 28, 2014). “It’s time to identify and optimize the specific psychologies that constitute the mental alchemy of productivity,” he says.

In one Stanford experiment, some workers were randomly assigned to work at home, others worked in group call centers. The work habits of both groups were carefully monitored electronically, and the workers knew it. Those working at home were 13% more productive than those in call centers. With modern technology, we now have so many ways to quantify, track and motivate productivity, and are just beginning to scratch the surface of doing so.

Classroom discussion questions:

1. Why is productivity such an important issue in OM?

2. Describe how time and motion studies are conducted (see Chapter 10).

OM in the News: Designing the Perfect Airline Seat–To Maximize Revenue

Yesterday’s New York Times (Sept. 9, 2014) featured not 1, not 2, but 3 articles on how airlines are addressing the issue of cramped seats! In the 1st, we find that the European budget carrier Ryanair just announced an agreement to purchase up to 200 new Boeing 737s (a $22 billion deal), each of which will allow that airline to squeeze an additional 8 seats into the single-aisle airframe. Ryanair will fit the planes with a whopping 197 seats, stripping out the front and rear galleys to help the redesign.

The 2nd article, titled “In Flight Rage,” confirms that cramped conditions in the back of a plane can severely test passenger equanimity. We have seen this in recent episodes in which pilots have made emergency landings when a few passengers have fought over seat-reclining. One prof, comparing people to livestock, finds that international regulations on flying animals specify the “need space to travel comfortably and on a long journey, the animal must be able to stretch, turn round, drink and groom itself.” Sounds better than a coach seat!

The 3rd piece gets to the heart of the matter–ergonomics, and ties in perfectly to Chapter 10. The real issue, says Prof. Kathleen Robinette at Oklahoma State U., is that airline seats are not designed to fully accommodate the human body in its various shapes and sizes. “We are fighting each other, but the seats are not designed right,” she says. Her study of 4,431 people found that seats are designed for a man in the 95th percentile of measurements. This means 1 in 20 men will be using seats that are too small for them. “That’s about 10 people on every plane, as well as all the people sitting next to them,” she adds. A big flaw in seat design, however, is that men in the 95th percentile are not necessarily larger than women. For about 1 in 4 women, the seat will be too small at the hips. Of even greater concern is the risk of blood clots, including a potentially deadly condition called deep vein thrombosis, which can occur when sitting in a way so you can’t move for about a 1/2 hour.

Classroom discussion questions:

1. What are the OM tradeoffs here?

2. Why is ergonomics an important issue on planes?

OM in the News: Paying Employees to Stay, Not to Go

This new In-N-Out Burger in Encinitas, CA, pays well above the state's $9 minimum wage, and the federal $7.25 minimum — This new In-N-Out Burger in Encinitas, CA, pays well above the state’s $9 minimum wage, and the federal $7.25 minimum

In-N-Out Burger, the chain based in California, pays all its employees at least $10.50 an hour, while Shake Shack, the trendy, lines-out-the-door burger emporium, has minimum pay of $9.50. Moo Cluck Moo, a fledgling company with two hamburger joints in Michigan, starts everyone at $15. “The No. 1 reason we pay our team well above the minimum wage is because we believe that if we take care of the team, they will take care of our customers,” said the CEO of Shake Shack.

The nation’s fast-food restaurants, which employ many of the country’s low-wage workers, are at the center of the debate over low pay and raising the federal minimum wage — fueled by protests demanding that fast-food chains establish a $15 wage floor, writes The New York Times (July 5, 2014). McDonald’s was pilloried last year for a hotline that advised employees how to seek food stamps and public assistance for heating and medical expenses.

Fast-food industry officials have long contended that raising the minimum wage would result in fewer jobs and higher prices. Complaining of low profit margins that generally accompany inexpensive menu items, most fast-food restaurants try to keep wages down — the median hourly wage for fast-food workers nationwide is $8.83, compared with $11.50 at Boloco and $10.70 at Shake Shack. In 2002, when the minimum wage was $5.15 an hour, Boloco raised its minimum pay to $8. It also began subsidizing commuting costs, providing English classes to immigrant employees and contributing up to 4% of an employee’s pay toward a 401(k). A major benefit of paying $15, said the owner of Moo Cluck Moo, is “we don’t have any turnover. We don’t have to train people constantly.”

Classroom discussion questions:

1. Why are these wages an operations issue?

2. How does this article relate to the human resource strategy we discuss in Chapter 10 on page 398?

OM in the News: The Long and the Short of the Perfect Office Chair

Ergonomics (see Chapter 10) is an important issue for operations managers, be it in a factory setting or in an office. A rising problem, reports The Wall Street Journal (May 20, 2014) is the office chair. Most chairs are designed for the 5th to the 95th percentile of the population—people who are closer to average in size. That leaves roughly 4 million white-collar workers on the unlucky extremes of the bell curve—too small for their chair, with legs dangling, or too big for their chair, with knees bent up toward the chin.

Former Labor Secretary Robert Reich, who is 4 foot 10 inches, once sawed off the legs of his office chair and desk to make them fit. He was working in the Justice Department in the 1970s, and the General Services Administration refused his request to shorten his standard-sized wooden desk and chair. “I snuck in one weekend with my saw and did it myself, and sent the stubs to the GSA administrator,” Dr. Reich says. His office chair later as Labor Secretary left his legs sticking out, so he held meetings standing up.

Solving the problem can be complicated for employers. Some worry about fostering resentment if they give one employee a special chair. Also, changing the size of a chair often means the desk must be raised or lowered too. Manufacturers are offering more work tables that can be adjusted with an electric lift, a hand crank or movable pins in the legs. They are also making more work surfaces, keyboard supports and computer-monitor arms that can be moved on vertical rails.

Most operations managers are under heavy pressure to hold down costs, however, and providing special items for a few workers conflicts with a common strategy of buying many standard items at discounted prices. Special chairs can list for $1,000 or more. But the need for adjustable chairs is growing. Steelcase Inc. recently studied the body shapes and postures of 2,000 workers in 11 countries and found that “extreme size” is on the rise.

Classroom discussion questions:

1. Why is ergonomics an important OM issue in offices?

2. Are height issues a similar problem in factories?

OM in the News: Humans Steal Jobs From Robots at Toyota

Toyota worker manually welding a part previously done by robots

Inside Toyota Motor Corp.’s oldest plant, there’s a corner where humans have taken over from robots in pounding glowing lumps of metal into crankshafts, reports BusinessWeek (April 7, 2014). “We need to become more solid and get back to basics, to sharpen our manual skills and further develop them,” said a company exec. “When I was a novice, experienced masters used to be called gods, and they could make anything.” These “gods” are making a comeback at Toyota, the company that long set the pace for manufacturing prowess. Toyota’s next step forward is counter-intuitive in an age of automation: Humans are taking the place of machines in plants across Japan so workers can develop new skills and figure out ways to improve production lines and the car-building process.

“Toyota views their people who work in a plant like this as craftsmen who need to continue to refine their art and skill level,” said Jeff Liker, who has written 8 books on Toyota. Learning how to make car parts from scratch gives younger workers insights they otherwise wouldn’t get from picking parts from bins and conveyor belts, or pressing buttons on machines. At about 100 manual-intensive workspaces across Toyota’s factories in Japan, these lessons can then be applied to reprogram machines to cut down on waste and improve processes. At the forging division of Toyota’s Honsha plant, workers twist, turn and hammer metal into crankshafts instead of using the typically automated process. Experiences there have led to innovations in reducing levels of scrap by 10% and shortening the production line length 96%.

Though Toyota doesn’t envision the day it will rid itself of robots — 760 of them take part in virtually all of the production process at its Motomachi plant — it has introduced multiple lines dedicated to manual labor in each of Toyota’s factories in Japan. Says one manager: “To be the master of the machine, you have to have the knowledge and the skills to teach the machine.” Adds a University of Tokyo professor: “Fully automated machines don’t evolve on their own. Sticking to a specific mechanization may lead to omission of kaizen and improvement.”

Classroom discussion questions:

1. Why is Toyota replacing robots with humans on some lines?
2. Why doesn’t every firm take this approach?

OM in the News: The Danger of Workplace Noise

A study links hearing and work-related injuries

Extremely loud noise on the job, as well as hearing loss from noise exposure, may cause workers to miss danger warnings, reports Newsmax Health (April 3, 2014). Workers regularly exposed to noise levels of 100 decibels – about the volume standing next to a lawnmower – have more than doubled risk of being hospitalized for a workplace injury. Workers with hearing loss were also more likely to be seriously hurt.

“Noise induced hearing loss is a public health issue – in the US, up to 30 million workers are exposed to noise,” said a Canadian researcher. “From an occupational safety perspective, work-related injuries remain an important issue that generates significant costs for businesses, workers and compensation organizations.” Exposure to high noise levels increases fatigue, decreases the ability to concentrate and impairs the quality of communication between workers.

Both noise and noise-induced hearing loss could be involved in the occurrence of accidents. For every decibel of hearing loss, the risk of hospitalization due to work-related injury increased by 1 percent. Workers exposed to noise levels above 100 decibels had 2.4 times the risk of being hospitalized for work-related injuries compared to workers not exposed to loud noise. Workers with the combination of severe hearing loss and working in an environment where noise exposure is overly intense the risk of being hospitalized with a work-related injury is 3.6 times that of workers with neither factor.

Workers who can’t hear properly, either because of hearing loss or wearing hearing protection that’s too strong, might miss important communications and signals on the job. One thing that might help is if workers and supervisors devise special safety signals that don’t rely as much on hearing.

Classroom discussion questions:

1. What levels of noise are students exposed to daily? Refer to Figure 10.4b in Chapter 10.

2. How can an operations manager protect employees?

OM in the News: UPS’s Peak Week

UPS UPS expects to ship more than 132 million parcels this week before Christmas. But it must keep a lid on costs. Maintaining profitability is especially difficult during peak season when delivery expenses rise. This year, UPS is adding 55,000 part-time holiday workers, leasing 23 extra planes, and effectively building a second trucking fleet to handle the seasonal package flow. None of this is cheap.

UPS’s delivery personnel, who can be someone’s hero—or scapegoat– makes all the difference. To get a sense of what peak season is like on the front lines, Businessweek (Dec.19, 2013) joined driver Kim Gardenier on her rounds. A 19-year UPS veteran, Kim set out on her journey in Wayne, N.J., on Nov. 25, the first official day of the season, at 8:35 a.m. About 7 ½ hours later, Kim had delivered 347 packages, including two flat-screen TVs, ice skates, a box of instant coffee, a guitar, and paper towels.

Kim could probably have unloaded another truckful of stuff. A lithe 44-year-old with moussed platinum hair, she spent the day gliding in and out of the mailrooms of suburban office buildings, the loading docks of strip mall stores, and apartment complexes. She maintained a consistently swift pace throughout the day, exchanging short bursts of small talk with her customers.

UPS is famous for requiring its drivers to follow 340 delivery and pickup methods, which include a directive to “politely inquire” about any shipments customers are making with competitors.

Classroom Discussion questions:

1. How does UPS optimize employee time?

2. Why is OM such an important part of the company?

OM in the News (and Video): Quality of Life at Amazon

Amazon's warehouse in Wales. — Amazon’s warehouse in Wales.

“On its home territory, Amazon.com is routinely hailed as a jobs machine,” writes The New York Times (Dec.2, 2013). Thanks to its warehouse building spree, it is hiring tens of thousands of workers, plus many more for the holidays. President Obama has called Amazon “a great example of what’s possible… the kind of approach that we need from America’s businesses.”

The recession might have cut deeper in Europe, making the question of new jobs even more crucial, but the attitude there is much cooler toward Amazon and its high-tech ways. In Germany, there is continuing labor strife. France is erecting barriers against the company’s aggressive discounting. And in Britain, the warehouses have been compared, in a story in The Financial Times, with a “slave camp.”

That shocking charge resurfaced in the latest investigation when a BBC reporter, Adam Littler, briefly went to work undercover at Amazon’s Wales warehouse. His report, broadcast last week on the show “Panorama,” (click here for the 1/2 hour video) showed him hustling to keep up with the demands of his hand-held scanner, which gave him only a few moments to find each product. In his 10-hour night shift, Littler said: “I managed to walk or hobble nearly 11 miles. We are machines, we are robots, we plug our scanner in, we’re holding it, but we might as well be plugging it into ourselves.”

Michael Marmot, a labor expert identified by the BBC as “one of Britain’s leading experts on stress at work,” told the TV show that with “the characteristics of this type of job, the evidence shows increased risk of mental illness and physical illness.” Amazon’s own expert disagrees, of course, and we have to question the shock value displayed in the video. The real question for your students is how are labor standards set–and whether they are fair to both the company and employees. For another view altogether of Amazon’s sophisticated warehouses in the US, watch this 3 minute video.

Classroom discussion questions:

1. How can labor standards for this job be set (see Chapter 10)?

2. What are the ergonomic issues addressed in the video?

OM in the News: And the Winner of This Year’s Ergonomics Prize Is…

Coca-Cola found a way to improve the posture of workers responsible for off-loading fruit from shipment containers to a collection bin. It didn’t involve a high-tech, expensive fix. Associates simply designed and built a tool using spare pipe from their maintenance department. During the old process (left), a worker had to prop a door open using a shovel in one hand to control the flow of the fruit, while the other hand had to unlatch the door and sweep the fruit out of the container and into the bin. The tool allows for the fruit to be released without the hand support of the worker.

For this innovative, less physically taxing approach to a daily problem, the company took first place (out of 180 entries) in Humantech’s Find It – Fix It Challenge. The contest, described in Material Handling & Logistics (Nov., 2013), recognizes simple and effective workplace solutions that increase productivity, improve worker morale and reduce workplace injuries and illnesses. Honorable mentions went to Goodyear Tire and to Hitchiner Manufacturing.

Prior to the improvement at Goodyear, an operator had to change and move liner rolls while in awkward postures. With shrugged shoulders, poor grip and radial deviation postures in the hands and wrists, the operator had to carry the liner roll to the rack, and then lift and set it into its desired location. After adding an ergonomically automated lifting and lowering device to support the liner rolls, the operator’s new task is to push the device to the desired location, which eliminates the awkward postures.

Initially, at Hitchiner, an operator had to pick up a 50-pound bag of wax beads from a pallet and carry it to a workstation. At least once per shift, the operator had to pick up the bag and dump beads into a barrel to refill it. Now, the operator just pushes the near empty barrel to the filler to be refilled. This improvement eliminated all heavy lifting and awkward postures.

Classroom discussion questions:
1. Provide other examples of how ergonomics can improve a process with which you are familiar.

2. Who is in the best place to provide process improvements?

OM in the News: Keeping Your Human Resources Happy

In Chapter 10, “Human Resources, Job Design, and Work Measurement,” we hold out Southwest Airlines as a model of workplace civility. The Wall Street Journal (Aug. 28, 2013), in this article on how hostile work environments cost companies in productivity and creativity, agrees. The Journal writes that the warm-and-fuzzy corporate culture of Southwest includes an entire department devoted to sending employees supportive notes when a family member is ill or congratulations when they have a baby. “We have people here who remember our birthdays when our family members don’t,” says one VP.

But this is rare. Some 96% of workers say they have experienced uncivil behavior and 98% have witnessed it, according to a Georgetown U. study. A separate recent study showed that 50% of workers felt they were treated rudely at least once a week. Victims of incivility dial back their work effort and are more likely to lash out. Uncivil behavior can “spread like a virus across teams,” adds a professor at Antioch. And the costs can be steep: Cisco Systems estimates the cost of incivility in its organization at $8.3 million annually. That figure takes into account turnover, employees’ weakened commitment to the company and work time that was lost to worrying about future bad behavior.

At the National Security Agency, managers encourage workers to pay someone a compliment or show up early for a meeting. NSA employees who do good deeds are honored as “civility stars,” rewarded with plaques. Even Dish Network, which topped website 24/7 Wall St.’s list of “the worst companies to work for,” is trying to take a kinder, gentler approach. That has meant summertime concerts and a softened stance toward the company’s attendance policy. “I wanted it to be a more fun place to work,” says Dish’s CEO. “I think people have a responsibility to treat everybody else the way they want to be treated.”

Some organizations are even setting rules to foster friendliness. At Louisiana’s Ochsner Health System, employees are required to follow the “10/5 rule,” making eye contact with anyone within 10 feet and greeting anyone within 5 feet.

Discussion questions:

1. How can civility be increased in the classroom?

2. Is it the operations manager’s job to keep employees happy?

OM in the News: They Call it “The Chasing-Out Room” in Japan

Unwanted employees are made to feel forgotten

Shusaku Tani is employed at the Sony electronics plant in Tagajo, Japan, reports The New York Times (Aug. 17, 2013) front page story, but he doesn’t really work. For more than 2 years, he has come to a small room, taken a seat and then passed the time reading. Sony consigned him to this room because it can’t get rid of him. His position at the Technology Center was eliminated, but Tani, 51, refused to take an early retirement offer in 2010 — his prerogative under Japanese labor law. So there he sits in what is called the “chasing-out room.” “I won’t leave. Companies aren’t supposed to act this way. It’s inhumane,” he states.

The standoff between Sony workers and management underscores an intensifying battle over hiring and firing practices in Japan, where lifetime employment has long been the norm and where large-scale layoffs remain a social taboo. Economists say bringing flexibility to the labor market in Japan would help struggling companies streamline bloated work forces to better compete in the global economy. Fewer restrictions on layoffs could make it easier for Sony to leave loss-ridden traditional businesses and concentrate resources on more innovative, promising ones.

Sony offered workers early retirement packages that are generous by US standards–severance payments equivalent to as much as 54 months of pay. But the real point of the rooms is to make employees feel so bored and shamed that they just quit. Labor practices in Japan contrast sharply with those in the US, where companies are quick to lay off workers when demand slows or a product becomes obsolete. It may be cruel to the worker, but it usually gives the overall economy agility.

Discussion questions:

1. Have the “chasing out rooms” been successful?

2. Why did Detroit automakers eliminate their version of the rooms (called “rubber rooms”)?

OM in the News: Ergonomics for an Aging Workforce

It’s no secret the exodus of retirement-age workers and their considerable knowledge is placing a strain on manufacturing companies around the globe. Less discussed, but just as real, reports Industry Week (Aug., 2013), are the challenges being presented by aging workers still employed on the manufacturing floor — and the design changes workplaces should be considering to keep these valuable employees productive and in the game.

“With this shift, we first must appreciate the difference between the younger and aging person, and then make sure we design accordingly so that these differences don’t become an obstacle,” says ergonomics expert Lance Perry.

Xerox, for example, has taken ergonomic measures to address its older population. In its 2012 environment, health and safety report, the company noted that musculoskeletal disorders continue to represent about half of its work-related injuries and illnesses, which, says Xerox, “is why we have strong processes to reduce ergonomic stresses in the workplace. Those strong processes include an ergonomic training program designed to provide simple ergonomic strategies, as well as awareness of the normal aging process, to reduce personal risk to employees.”

“Many people view the aging workforce as a liability, and to some extent it might be, but it is also an opportunity,” adds Perry. “This is where your experience lies, this is where your job knowledge lies, this is where, in some respects, loyalty lies.” Ultimately, Perry advises manufacturers to consider what design changes they can make to retain valuable, but aging, knowledge workers. “What can you do to keep them on the job longer and still be productive and safe in the process?”

Discussion questions:
1. Why is ergonomics an important issue for operations managers?

2. What kind of ergonomics designs can help older workers?

OM in the News: It’s “Ready, Set, Clean” at Marriott

Consistency is the lifeblood of great branding, and to that end Marriott has taken something as seemingly simple as tidying up a hotel room in about 20 minutes and turned it into an exact science. In fact, company execs treat the 66-step manual as though it were a state secret, according to Forbes (July 15, 2013). Here is a play-by-play, which makes a great example when you are talking about labor standards in Chapter 10, Human Resources, Job Design, and Work Measurement:

“Always knock three times before entering a room. Place clean fitted sheets on the nightstand. Strip the bed, and use dirty fitted sheet as a package for the rest. Inspect bed for stains. Smooth out mattress pad. Place clean fitted sheet on right side of bed, and start with top corner, move to bottom right corner and cover in a clockwise progression. Do not “billow” sheets in order to prevent tired arms.

When cleaning a nightstand, first wipe lamp base and shade and then the stand’s surfaces and drawers, including inside. Use the yellow rag with all-purpose spray in the yellow bottle. Wipe the nightstand’s glass top with a blue rag, using the blue bottle. Wipe the phone and clock. The telephone’s handset and faceplate should be wiped clean and free of marks. The cord must be bound neatly. Check that the alarm clock works and that it is set to the correct time. Make sure the alarm is off.

Before leaving, check the drapes to ensure they are in good shape and in proper position. Make sure the carpets and their edges are vacuumed and free of spots and tears. Tops of pictures must be dust-free as should be the ice buckets and windowsills. Check that the thermostat works and is set properly and that the room has a neutral odor.”

Discussion questions:

1. Why does Marriott have step-by-step instructions for almost all its operations functions?

2. How do you think these labor standards were developed? (See Ch.10 for ideas).

OM in the News: Serving Fries 24 Hours a Day at McDonald’s

When you are teaching human resource strategy in Chapter 10, your students may find the issue of running a restaurant 24 hour/day interesting. The Wall Street Journal (April 30, 2013) writes that “fast-food chains are hanging a lot of hopes on night owls and early birds.” With a lean economy squeezing their sales, thousands of restaurants are extending their hours to try to get more people through the door.

About 45% of McDonald’s 14,100 U.S. locations are now serving customers around the clock, up from about 30% in 2005. Dunkin’ Donuts has doubled its number of 24-hour restaurants over the past decade to nearly a third of its 7,000 U.S. outlets. Taco Bell implemented a breakfast menu for the first time last year, and today 825 stores open between 7 a.m. and 9 a.m., instead of the usual 10 a.m.

For many franchisees, extending hours is an alluring idea, since it lets them bring in more revenue without boosting fixed costs like rent. It can also simplify other operations issues: Outlets that stay open around the clock, for instance, can eliminate procedures for opening and closing the restaurant.

But the practice doesn’t always bring big payoffs. Even though fixed costs don’t rise, there are added expenses such as higher utility bills and extra pay for hourly employees working the graveyard shift. Simply finding people to work those hours can be a struggle. “It is always difficult to get people to work overnight. It’s just contrary to the body,” says one consultant.

Meanwhile, the boost in sales can be meager. Consumers still prefer to eat at fast-food joints during traditional hours. Noon to 1 p.m. is the busiest time of day for quick-service restaurants, accounting for about 15% of customer visits last year. In contrast, the hours between 9 p.m. and midnight represented just 6% of visits, and the hours from 1 a.m. to 4 a.m. less than 1%.

Discussion questions:

1. What are the advantages and disadvantages of running a restaurant 24 hours a day?

2. Why is finding people to work the overnight shift so difficult?