OM in the News: McDonald’s Decides No More Dry Burgers

In 1948, brothers Richard and Maurice McDonald retooled their original San Bernardino, Calif., restaurant around a slim menu selling burgers for 15 cents. Their restaurant, called McDonald’s, would go on to provide the blueprint for the fast-food business. They shrunk down the patties to make them more affordable, and served them with ketchup, mustard, onions and two pickles—no substitutes, to keep service fast. The concept was a hit.

Assembling the revamped burger in a test kitchen.

Burgers last year accounted for around 40% of U.S. fast-food sales, and most chains can’t make it without a strong contender. Some 68% of Americans eat burgers at fast-food restaurants at least once a month.

The problem for McDonald’s is that it came in 13th among U.S. chains based on the number of customers (28%) calling their burgers desirable, reports The Wall Street Journal (Dec. 1, 2023). White Castle led the list with 72%, and Burger King followed at 52%.

With increased competition in the burger market, McDonald’s executives decided to revamp many of the industrial-scale techniques that have produced cheap, uniform burgers. In some cases, the firm is reviving practices it scrapped long ago in a push for efficiency. “We can do it quick, fast and safe, but it doesn’t necessarily taste great. So, we want to incorporate quality into where we’re at,” said a top exec.

Deciding it’s had enough with dry patties and squishy buns, the firm made more than 50 tweaks on its burgers adding up to the biggest enhancements in decades. They started by cooking the beef with the onions on top of the patty, added room-temperature cheese that melted faster and put it all on the shinier brioche-style bun, a moister bread to better hold heat. They found cooking 6 burgers at a time instead of 8 improved consistency and delivered fresher patties. They calibrated the gap on the metal clamshell that presses burgers on the grill down to the millimeter, to avoid pressing too hard and squeezing out all the juices.

For a chain with tens of thousands of restaurants, the overhaul posed a massive undertaking. Restaurants would have to retrain workers to look out for quality measures like when grills were running too hot and drying out patties. McDonald’s needed to ensure bakeries across the world could comply with its new specifications for buns. The plan has taken 6 years to implement.

Classroom discussion questions:

  1. Other products and services have been around for many years, like the Big Mac, and have also had continued success through enhancements. Identify one such product.
  2. Why did it tale McDonald’s so long to improve its burger?

OM in the News: Ford’s Epic Gamble on Aluminum

Alcoa's Iowa plant has expanded to meet the growing need for aluminum in the auto industry
Alcoa’s Iowa plant has expanded to meet the growing need for aluminum in the auto industry

Ford has a long-term plan to unify its global manufacturing, writes Fortune (July 24, 2014). But profits depend largely on a beefy truck that is sold only in N. America and will never find a market in Asia or Europe. Not that it needs to. The F-series has outsold every other car and truck in the U.S. for 3 decades, with some 33 million out the door. So when Ford decided in 2009 to fundamentally change the product it advertises as “Built Ford tough” by making it with a lightweight aluminum body, it was messing with a uniquely valuable franchise. Ford figured the change could reduce the weight of the F-series by 700 pounds, significantly improving its fuel economy (US standards require a fleetwide average of 54.5 mpg by 2025).

But aluminum is more expensive than steel, more complicated to assemble, and more difficult to repair. The changeover from steel would mean alterations to nearly every phase of the business. Aluminum can’t be easily welded and must be riveted and bonded with adhesives. New suppliers would have to be found and validated, plants refitted, production techniques changed, repair technicians hired and trained. Importantly, the changeover to the 2015 models would have to be extended, slowing production and denting profits. “It will be magic or tragic,” says the CEO of AutoNation.

Adds Ford’s CEO, “We had three alternatives: make incremental changes to the existing truck, add more aluminum parts, or make it all aluminum.” Ford created 4 work teams to investigate what it saw as the big unknowns surrounding aluminum: availability, manufacturability, serviceability, and likability. At the Dearborn Truck Plant, one of 2 plants where the F-150 will be built, the company is spending hundreds of millions of dollars to build and install new stamping presses and dies to produce the aluminum panels and replace today’s spot welders with rivet guns, advanced welders, and adhesive machinery in the body shop. With both plants currently producing the 2014 F-150, they will have to be taken down one at a time for a total of 13 weeks for refitting, depriving Ford of $2 billion in revenue.

Classroom discussion questions:

1. How is Ford’s production process changing?

2. What are the risks the company faces?