mcdonalds-3

McDonald’s Lean Tools and Concepts

IM605-705

Team II

Presented by

Aung Myo Naing

Ei Kay Khaing

Ngu Kay Khine

Thein Than Hein

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Abstract

This report is a review of how the world’s leading fast food service organization McDonald’s used

lean concept and tools to improve their services. McDonald’s has successfully eliminated wastes

such as waiting time and process wastage by adopting various lean concepts and implementation

of lean tools. As a result, customer satisfaction is increased and they have achieved a great

reputation in the food chain industry. The tools that they used include Poka Yoke, Kanban, Kaizen,

layout plan, one-piece flow and technology tools that focus on lean principle.

Introduction

McDonald's is the world's leading fast food service organization which operates over 36,000

restaurants in more than 100 countries. McDonald’s is also one of the world's most recognized and

respected brands when it comes to lean practices. The first McDonald’s was run by Richard and

Maurice McDonald on Fourteenth and E streets in San Bernardino, California. The restaurant

concentrated on only a few items, which allowed them to focus on quality and quick service.

Stunned by the effective operation, Ray Kroc founded the McDonald’s System in 1955. Ray

Kroc’s idea was to build a restaurant system that provided food of consistently high quality and

uniform methods of preparation. He wanted all his restaurants to offers hamburgers and fries that

had consistent taste across the United States. He persuaded both franchisees and suppliers to buy

into his vision, working not for McDonald’s but for themselves, together with McDonald’s. Kroc

launched a training program at a new restaurant in Elk Grove Village, Illinois in 1961. The

franchisees were trained on the proper methods for running a successful McDonald’s restaurant.

More than 80,000 people have graduated from the program. The company is primarily a franchisor,

with over 80% of McDonald's restaurants owned and operated by independent franchisees. It has

faced tough competition, which has affected every aspect of its organization. It has maintained its

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position by adopting the ‘lean’ focus. McDonald’s has implemented a lot of lean tools in their

processes to improve their services and eliminate waste in their process.

Eliminating waste (MUDA)

McDonald’s has done amazing work when it comes to eliminating waste. In the early days,

McDonald’s used to prepare sandwiches in batches and keep them in warming bins. McDonald’s

has eliminated this overproduction waste (the worst waste of all wastes) by keeping sides ready

instead of the sandwiches to reduce process time. With the help of modern technology,

McDonald’s has drastically reduced the waiting time. Modern cooking equipment and computer

systems allow McDonald’s to prepare the order in less than a minute. Processing wastes occurs as

excessive products are being processed. McDonald’s’ “speedy system”, which was introduced by

the McDonald’s brothers, helps to reduce handling of items by working in the order of the

assembly line. McDonald’s has also eliminated overstocking by using a sophisticated stock control

system to manage the process while meeting demand at all times. Defects are avoided at

McDonald’s by highly trained and motivated staff on duty and simplifying the process, which

reduced defects and wastage.

Poka Yoke

Poka Yoke helps people and processes work right the first time. Poka Yoke refers to techniques

that make it very difficult to make mistakes and avoid simple human error in the workplace. These

techniques can drive defects out of products and processes and substantially improve quality and

reliability. A Poka Yoke device is the one that can easily identify a flaw or error. Poka Yoke is the

first step in a truly error-proofing a system. Error-proofing is a manufacturing technique of

preventing errors by designing the manufacturing process, equipment, and tools. McDonald’s has

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many years of success and achievement as well as they are the best and fastest in the business. But

they had a problem with their food preparation system. However, in the late 1980s McDonald’s

began to change the system for handling their high volume and its current menu; the changing

market place brought about new challenges. There are problems due to different taste of people

ordering which might lead to queuing problems. People are waiting at the counters for their turn

to come. By using Poka Yoke they have designed and implemented it’s new just in time kitchen

system named “Made for you”. For simple example, McDonald’s use the French fry scoop to

measure the amount and serving of potatoes to get the exact amount of the orders and give the

orders to customers in short time. The French fry order amounts would not be the same if the scoop

was not used. Some orders would be falling over the top that fries would fall on the floor and some

would be half-full. The kitchen is a technological overall of its previous system to design and to

improve food quality, allow many new menu items to be introduced and provide superior customer

service.

One Piece Flow

One Piece Flow is a fundamental element of becoming lean. One piece flow focuses on completing

the production of one piece from start to finish with as little work in the process inventory between

operations as possible. Most fast-food burger industries follow the batch and queue principle. Food

is cooked in batches and the kitchen employees prepare ingredients and wait for orders to cook it.

Then the food is placed for frontline staff to serve customers. Expected production is based on the

customer demand and sometimes it can have high levels of waste. Therefore, staff in this situation

are to focus on the demand and reduce minimizing waste. From the start of the operation to the

final state, the sandwich and burgers flow as one piece process. The important thing is the customer

is involved in every part of the process. All employees deal with the customers and creation of

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customer value. They must understand what customers need and want. This makes the organization

keep changing the variety offered on a daily basis. Waste is minimal and there are no staging areas

where food could go to waste.

Kaizen

Kaizen is mainly derived from a Japanese word meaning continuous improvement or philosophy

of improvement. The process of Kaizen is to measure the continuous improvement of production

workers. Kaizen is a daily process that teaches the workers how to perform the overly hard work

and eliminate waste in the workplace. Considering McDonalds as an example, this is a well-known

fast food restaurant all over the world and it is recognized as a short period time for customers to

buy in queues. McDonalds has introduced as a quick till system as Kaizen in order to decrease the

waiting time in queues. It setup the improvement team process to drive out the waste in the

workplace to finish the order in a short period of time. They divide their workload and make

everyone work respectively at the same time, not the same place. For example, it is like a one cycle

work system that means when a person finish an order, another person starts to prepare the menus

and other person serves the clients at that time. There is no lack of time to get done any orders

shortly. So the customers are satisfied about that improved speed of service time because it totally

reduce the waiting time using Kaizen and it is also quick serve. This is not enough implementation

for them even if they got a lot of customers’ satisfaction and they still carried out how to convenient

for some customers who do not waste their time to get in shop to order. So they took in

consideration further to make the order pay system faster with the advantage of the technology.

They always pay attention to customers so they know how customers demand; for example some

customers may like to order face to face ordering in the shop, but some do not like to and they feel

more convenient if they can order from their car without walking to shop. Therefore, one of the

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McDonald’s target is to give a good service to every customer. In the US, there is a customer

service for who does not want to get out from the car to order the menu and it is so comfortable to

take away after ordering from which has someone help to order through screen. Furthermore, it is

so obvious in the UK where McDonald’s launched the touch screen self-service ordering system

for some customers who desire that. Today, customer requirements are shifting rapidly according

to the advanced technology. The customer who enjoys to take order themselves by touching the

screen rather than face-to-face customer service. Here, as a lean manufacturing, Kaizen process is

a systematic approach to identifying and eliminating waste (non-value added activities) through

continuous improvement. So, McDonald’s focuses on eliminating non-value added activities and

time for which the customer is willing to pay only for the food, not for the ordering.

Kanban

As a consequence, McDonald’s definitely use Kanban system which eliminates the waste,

reducing the waiting time, and lowering the cost and optimized the customer service. Kanban

process is derived from just in time methodological process. It makes the preparation of food not

much later than a few minutes after taking order. McDonald’s makes no longer in advance anymore

to reduce the overproduction managed by the pull/Kanban process that goes step by step process

continuously and is circulated by the supply production. So, using the Kanban process makes

McDonald’s work and improve to be a short period of lead time to customers.

Outcomes

As a fast food industry, one of the most important requirements for McDonald’s manufacturing

system is to provide food to the customers as fast as possible so that the implementation of just-

in-time production and several lean tools becomes the best way to fulfil that requirement. The

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result in the taste and size of the sandwiches are the same in every restaurant as the works are

standardized in every restaurant by one piece flow production system. The need of inventory is

significantly reduced as the production only happens just at the time the customer makes an order.

Moreover, the waste due to the preparation of foods with uncertain demands is also decreased to a

noteworthy amount as there is no need to make food in advance. The customer service is more

effective as the way they interact with customers is improved by using tech-devices. The menu

becomes more customizable and flexible as the process is based on just-in-time system. The

utilization of space and equipment are maximized so that the cost of maintaining space and hiring

employees is impressively reduced. Therefore, the profitability of the company increases without

raising the product prices.

Interesting Points of McDonald

“Made for You” Food Preparation System of McDonald’s Corp

The system was invented to provide its customers with various sandwiches to choose and to meet

the demands. It is based on a just-in-time kitchen system. This system improves the quality of food,

allows menu items to be more easily introduced to the customers and provides superior customer

service. To implement this system, the company designed and upgraded its existing computer

system, toaster and holding cabinet. When an order is placed at the reception, it will show up with

special instruction on the screen of the kitchen video system monitor that can be seen by everyone

in the kitchen, which makes the employees put the buns through the special toaster that turns up

to 255 degrees in about 11 seconds. After the buns are put on the wrap and the condiments, pickles

and onions are added, the meat is added from a special universal holding cabinet. This cabinet

allows the employees to handle the different components easily and quickly. Meat products

required for all types of sandwiches can be stored in the cabinet at the acceptable temperatures.

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For the video system, it also monitors customer traffic day to day throughout the restaurants to

determine the flow of orders so that it can predict the time when business will increase and what

food items are typically ordered during these times. The computer then generates orders for best-

selling items to prepare foods in advance during the peak hours. Moreover, it also monitors

employee output with a POS system and it can estimate who is the best employee to produce a

certain type of product. This allows the restaurant to achieve maximum productivity.

“Experience of the Future” concept of McDonald’s Corp

This concept of McDonald’s Corp is mainly to improve the way they communicate with the

customers. The features include mobile ordering, kiosks and table service, which are used in the

ordering process to reduce mistakes and speed up the ordering process. Offering a heavy level of

customization without requiring a frontline worker to get everything right from a verbal order, the

tablets will be mounted tableside and sitting in kiosks for the customers to make an order. In

addition to this, the devices could entertain the customers in some ways while they are waiting for

the meal and allow them to pay their bill. This could also reduce the labor cost as there is no need

of waiters to take orders from the customers.

Layout plan of McDonald’s restaurants

McDonald’s Corp has been innovating its restaurants’ layout plan since the 1950s and these

innovations, including indoor seating (1950s), drive-through windows (1970s), adding play areas

(late 1980s) and redesign of the kitchens (1990s), self-service kiosk (2004), provide McDonald’s

a lot of advantages. The latest renovation for dining area is the most interesting point, which will

be separated into three sections: (1) the “linger” zone for young adults, (2) the “grab and go” zone

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and (3) the “flexible” zone for families. It is likely to improve the customer interaction, which will

result in the increase in demand.

Summary

To stand as one of the world’s leading fast food service organizations, McDonald’s Corp tested

and applied several various types of techniques, ideas, devices, and systems in its restaurants.

These include the combination of lean tools, pull system, just-in-time production, MRP production,

advanced tech-devices, computerized systems, and employee training. As the competition between

fast food industries is higher than ever, every organization is attempting to achieve the customers’

attention by a facilitating variety of features in every aspect so that McDonald’s Corp has been

finding new ways to improve advanced techniques that can maximize the efficiency and

effectiveness of its process. Considering the increase in demand in the near future, they need to

pass the risks and challenges coming not only from their rivals but also from their customers’

satisfaction with their products.

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