Tag: throughput

OM in the News: Fried Chicken Chain Cut Worker Steps by 9,000 a Day

Pollo Campero workers at an Orlando restaurant which features the company’s new kitchen design.

Pollo Campero plans to more than double its U.S. store count. But first, it’s halving the number of miles workers walk each day. The chicken chain mapped how workers were moving around stores and revamped its restaurant design to allow people to work more efficiently, reports Bloomberg.com (April 4, 2024). It slashed the number of steps taken by the staff member who ensures orders are delivered promptly and accurately from 18,000 per shift – or 3.4 miles – to 9,500.

“Every step you save adds to the bottom line and saves labor costs,” said the firm’s VP. The reduction can also result in faster service and happier customers. Pollo Campero’s initiative mirrors an industry-wide push for higher productivity as restaurants face elevated costs. While many restaurants now say that staffing and turnover are back to pre-pandemic levels, the median base wage for their workers is 18% higher than three years ago.

These elevated costs have added increased urgency to chains’ quest for efficiency, boosting interest in techniques (such as counting workers’ footsteps), that have been used for years. Higher productivity can help cut costs, the thinking goes, and allow restaurants to serve more customers per hour. Improving the metric — known as throughput in Supp. 7 of our text— can lead to higher sales. Companies looking to boost capacity include Popeyes, which is revamping its kitchens, and Starbucks, which is rolling out machines that brew coffee in 30 seconds.

At a Pollo Campero store in Orlando, the kitchen has a double-sided center island stocked with chicken and sides. Workers assembling orders for the drive-thru stand on the left and those putting together dine-in orders on the right, a setup that prevents them from bumping into each other. Boxes, condiments and napkins are all within reach.

The Orlando location is 2,600 square feet, 9% smaller than the average store blueprint. It also has 20% fewer seats than usual, owing to a shift toward on-the-go eating that has surged. The more compact store requires 10% fewer workers per shift.

Outside, the drive-thru features a digital board that customers can consult before pulling up to the speaker to place the order, helping avoid the “can I get uhhh”  when they don’t have enough time to study menus.  The goal is to clear dine-in customers in 5 minutes and drive-thru diners in 3.

Classroom discussion questions:

  1. In what other ways could fast food chains increase throughput?
  2. What other chains are moving to smaller stores? Why?

OM in the News: Starbucks Tries Mobile Order/Pay Only Stores

 

Starbucks is opening a new coffee shop that only accepts orders placed on a mobile device, reports Geekwire (April 3, 2017). Starbucks now has more than 9 million mobile paying customers, more than a 1/3 of which use the Mobile Order & Pay (MOP) program that lets customers order with their smartphone and skip the line.

However, Starbucks has a problem. The uptick in mobile orders is creating congestion inside stores for mobile order-ahead customers trying to pick up their coffee and food at hand-off stations. This not only affects customers who are picking up items, but also potential customers who may notice the in-store traffic and end up not purchasing anything.

“We’re going to redesign new stores and existing remodels to reflect the fact that MOP is obviously going to be a significant part of the business,” said Chairman Howard Schultz. In response, Starbucks is adding dedicated stations for mobile order-ahead customers, distinct from existing in-store registers. There were 1,200 stores in the U.S. that saw more than 20% of transaction volume come from MOP during peak hours last quarter.

TheStreet’s Jim Cramer said that if Starbucks can solve “the throughput problem with mobile ordering, then its stock can go much higher. Starbucks has to become a technology company that gets your coffee to you without a throughput problem.”

Classroom discussion questions:

  1. How can Starbucks handle the throughput problem?
  2. Is it a mistake to create MOP only stores?

OM in the News: Chipotle’s Burrito Velocity

chipotle-service“Another year, another breakthrough in Chipotle’s blinding burrito-making speed,” writes Quartz (April 21, 2014). Over the first 3 months of 2014, the US Mexican-food chain saw an average increase of 7 transactions per hour at both peak lunch and dinner hours—12 to 1pm and 6 to 7pm. On Fridays, one of its busiest days of the week, Chipotle fielded 11 more customers per hour at lunchtime on average across its stores, a 10% increase.

“One important element of delivering great customer service is you’ve heard us say over and over is faster throughput,” says the CEO. “We’re excited that our teams are ready to break new throughput records.”  Another way to think about throughput is to think about it as burrito-velocity—that is, the speed it can funnel a customer and the burrito being made for them from the beginning of its line to its end. The chain puts every part of its assembly line under a microscope to make sure it functions as efficiently as possible.
As far as the company is concerned, faster service is the same thing as better service. For that reason, the chain is finicky about things Chipotle-lovers likely hardly even notice. Credit cards, for instance, are better than cash, because they’re faster. And that person who wanders around cleaning off counters and re-filling empty meat, vegetable, rice, and bean containers is crucial. In fact, she even has a title: linebacker. Linebackers, who patrol countertops, replace serving-ware, and refill bins of food, are one of Chipotle’s four, Maoist-sounding pillars of effective lightning-speed service. The others, which together make up what the chain refers to as its “four pillars of great throughput,” include the extra person between the one who rolls your burrito and the one who rings up your order, a commitment to having every ingredient and utensil in its place, and finally, making sure its best servers are always working at peak hours.  Some of Chipotle’s fastest restaurants currently run more than 350 transactions per hour at lunchtime, which equates to  nearly 6 transactions per minute!
Classroom discussion questions:
1. Why is throughput such an important OM measure at Chipotle?
2. What are the four pillars of great throughput?