food quality – The OM Blog by Heizer, Render, & Munson

OM in the News: Chipotle’s Battle for Quality Control

At lunchtime, people peered into a Chipotle in Washington, one of the stores that closed on Monday. — At lunchtime Monday, people peered into a closed Chipotle

Chipotle Mexican Grill closed its more than 2,000 restaurants for 4 hours this past Monday to hold a “virtual” town hall meeting with its employees about steps it said it was taking to improve food safety and regain consumers’ trust. The firm also announced a $10 million program to help small farmers who are Chipotle suppliers shoulder the costs of putting in place the company’s new food safety system, which will require them to do more rigorous testing.

Chipotle has experienced 6 food safety failures involving norovirus, salmonella and E. coli since July, with more than 500 customers reporting that they fell ill afterward, reports The New York Times (Feb. 9, 2016). But “it’s going to take significant meaningful action that goes beyond telling employees to be more careful and, unfortunately, some time before consumers start to believe it,” says an industry expert. The best example of a company regaining consumer trust was of Tylenol in 1982 when 7 people died after taking medicine that had been tampered with. Johnson & Johnson moved quickly to recall the product and establish ties with the police and the FDA. Tylenol’s market share crashed, but J&J introduced new tamper-proof packaging and heavily promoted the brand. Today, Tylenol is a best-selling over-the-counter analgesic.

The norovirus contaminations that caused the greatest number of illnesses were introduced to the restaurants by sick employees. Since the outbreaks, the company has instituted paid sick leave for employees in an effort to encourage them to stay home. A salmonella outbreak that sickened more than 60 people was linked to chopped tomatoes. The company now washes, dices and tests tomatoes in its central kitchens and then ships them in sealed bags to restaurants. As for the most serious contamination, 2 different types of E. coli that sickened 60 people after they ate in Chipotle restaurants in 14 states, neither Chipotle nor the C.D.C. had been able to determine the exact cause.

Classroom discussion questions:

Why is Chipotle’s supply chain a major issue here?
What other firms faced similar problems and what did they do to win back market share?

OM in the News: Chipotle’s Toxic Supply Chain

My family is the perfect customer unit for Chipotle Mexican Grill. We eat organic, prefer range fed animals, and select local fresh vegetables and fruit. For a long time, the chain of 1,900+ locations has reminded customers that its fresh ingredients and naturally raised meat are better than rivals’ and better for the world. The implication: If you eat Chipotle, you’re doing the right thing, and maybe you’re better, too. But fewer people associate Chipotle with “healthy” today, reports BusinessWeek (Dec. 28, 2015-Jan.10, 2016). Almost 500 people around the country have become sick from their food since July. And food-safety experts say they believe the total number affected is at least 10 times the reported number.

The company has always urged customers to think about its supply chain. Now they are. And so is Chipotle, which has blamed the outbreak on its supply chain’s use of local farmers and growers. To respond to the crisis, it will shift more food preparation out of restaurants and into centralized kitchens–doing things more like the McDonalds type of chains it’s long mocked.

Chipotle has about 100 major suppliers for its 64 ingredients–plus many more local farms, which supply 10% of its produce. More food will be prepared ahead of time, out of sight at commissaries, and transported to 19 distribution centers and then to restaurants. “They’re sort of in a bind,” says a Boston U. prof. “They want to have this local, fresh image, and making food in a commissary and shipping it all over the country takes away from that.”

Before it’s harvested, produce will be screened for pathogens using DNA-based tests. Meeting these higher standards will be expensive for smaller farms: There’s the cost of the testing itself and of discarding rejected vegetables and herbs. From there, it will be sent to the commissaries, to be washed, sanitized, and retested. The commissaries, rather than the restaurants, will be responsible for cleaning and packaging the cilantro, shredding the lettuce, and dicing the tomatoes.

Classroom discussion questions:

Compare Chipotle’s supply chain to that of Darden’s, described in the Global Company Profile in Chapter 11.
What are the advantages and disadvantages of using locally grown supplies?

OM in the News: Molecular Sensors Revolutionize Quality Control

A chocolate bar undergoing testing with SCiO technology to detect fake or mislabeled ingredients

The recent food outbreaks of norovirus at Chipotle Mexican Grill are a reminder that one in six people in the U.S. experience food poisoning every year, and 128,000 are hospitalized for it. Add to that all the other hazards in our food—carcinogens, pesticides, mislabeling of everything from seafood to meatballs—and you realize that in the U.S., the price of cheap and bountiful food is an array of unsavory compromises. “But w hat if you could know exactly what you’re putting in your mouth, down to the last bite? What if we all had the ability to inspect our food in a way previously accessible only to chemists with costly laboratories”, asks The Wall Street Journal (Dec. 14, 2015)?

The $250 Nima from 6SensorLabs is an organic-chemistry lab small enough to carry in your pocket, and able detecting gluten in foods at minuscule concentrations, as little as 20 parts per million. In the near future, Nima will recognize all manner of proteins—including ones that would allow it to recognize bacterial contaminants such as E. coli and salmonella. Nima is typical of a new breed of sensors that are cheap and fast enough to add more layers of inspection to our food system, for suppliers, restaurants and even individual consumers.

Another such technology, by Safe Catch, offers the world’s lowest mercury-contaminated canned tuna fish. This process allows Safe Catch to inspect every single fish as soon as it comes off the boat, rather than sampling just a small percentage of them. Then there is SCiO from Consumer Physics of Israel, which can identify substances by measuring the spectrum of light they reflect. Its sensor has the advantage of being so small—it is basically a camera technology—that it could be incorporated directly into cellphones. These and similar electronic products will almost certainly create whole new applications, markets and billion-dollar businesses.

Classroom discussion questions:

Why are these new sensors so important to operations managers?
What other applications can you envisage for such products?

OM in the News: The Deadly Ice Cream Recall

My teenage son is a Blue Bell ice cream junkie. He polishes off about two 1/2 gallon containers of vanilla (why vanilla, of all flavors?!) a week–or at least he did until all Blue Bell was pulled off the shelves in April. Federal records, reports The Wall Street Journal (Aug. 5, 2015), show that Blue Bell failed to follow practices recommended that might have prevented listeria contamination of ice cream at its plants. The recall came after health officials tied its ice cream to 3 deaths in Kansas since the start of 2014, and additional illnesses elsewhere.

The Food and Drug Administration states that sanitation problems that created refuges for listeria have persisted at Blue Bell since at least 2009. Beginning in 2013, Blue Bell repeatedly found listeria in its Oklahoma facility—including on floors, a drain and at equipment that fills half-gallon containers—indicating the company didn’t do enough to identify the underlying cause or eliminate the source.

The FDA advises companies to regularly test for listeria on surfaces that touch food. It also recommends testing the food itself. But records show Blue Bell didn’t test its ice cream, or surfaces that touched it, despite finding listeria traces in the plant.

Until recently, listeria in ice cream was uncommon, though not unheard of. Neither of the two largest U.S. ice cream producers— Edy’s and Ben & Jerry’s—have had to recall their products due to contamination. However, three smaller ones recently have recalled products because of listeria contamination, including Jeni’s Splendid Ice Creams, which had to shut production twice. So Blue Bell’s problems reflect broader complacency in the ice-cream industry about listeria. Many believe the frozen dessert is at lower risk of being associated with infections from listeria than some other packaged foods, in part because the bacteria doesn’t grow when food is frozen.

But as we discuss in Chapter 17, maintenance isn’t just about keeping facilities clean and machines working. It also involves management and employee awareness and involvement.

Classroom discussion questions:

What did Blue Bell do wrong?
What would quality expert Philip Crosby (see Chapter 6) say about the cause of the outbreak?

OM in the News: Where to Locate the Next McDonalds–in Your Hospital?

We all know that hospitals can be dangerous places to spend a few nights. Here are just a few statistics on annual deaths in US hospitals due to preventable errors (as cited from a variety of studies): 44,000-98,000 (Institute of Medicine, 1999); 195,000 (Health Grades, 2004); 180,000 Medicare patients (US Department of Health, 2008); and 99,000 (AHRQ, 2009). But what we would not expect as a reason for our demise to be hospital food. Maybe that is why a group of 1,900 doctors is starting a move to rid hospitals of our favorite fast food chain, McDonald’s, that has found a location strategy in a crowded market.

It turns out that 22 hospitals currently have contracts with the fast food industry leader, reports MarketWatch (April 10,2012), including the Cleveland Clinic and Children’s Memorial Hospital of Chicago. “Kids are being treated for diet-related conditions like diabetes on one floor in the hospital and given the wrong message by being offered the world’s most recognized junk food brand on another floor in the hospital,” says the former president of the American Diabetes Association “The practice earns McDonald’s an undeserved association with healthfulness among parents and children alike.”

A study in the Pediatrics demonstrated that allowing a McDonald’s to operate inside a hospital affects hospital guests’ consumption on the day of their visit, and boosts the perception of the “healthfulness” of McDonald’s food. To address this concern, the group just sent a letter to the 22 hospital administrators last week, noting: “It’s no surprise that McDonald’s sites stores in hospitals. For decades, McDonald’s has attempted to pose itself as part of the solution.”

In 2009, Dallas’ Parkland Health & Hospital System replaced a McDonald’s with a smaller chain offering healthier food. McDonald’s had been the only chain restaurant at the hospital for 20 years.

Discussion questions:

1. Do your students think locating McDonald’s in hospitals is an ethical issue?

2. Into what other types of facilities has the firm expanded?