5.4 McDonald's: Re-engineering the Process to Meet Customer Needs

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As discussed in Chapter 5, starting over with a completely new design of processes is often known as reengineering. This can sometimes be the best way to respond to shifting customer expectations that require process changes. Few business rely on their process to provide the level of success that McDonald's has enjoyed. Despite the ability of their system to produce high volumes of consistent products, when the market wants variety and your production system sacrifices variety for high volume, something needs to change.  This was exactly the case for McDonald's. Customers wanted variety. VIDEOjtm1
While this change may seem simplistic, the new system is a complete re-design of the old system. It required a complete re-engineering of all existing processes.  The new system allows for a make-to-order process, in contrast to the old make-to-stock system.  VIDEOjtm2
Customer familiarity with McDonald's meant that they had pre-existing expectations for service time. They wanted variety, but they wanted it as quickly as they were used to getting served at McDonald's. The new system would have to satisfy the customers who were used to the old ways.  That set limits on response time, quality, food preparation, people, and profitability.  VIDEOjtm3
In the new system, customer orders, with special instructions, are immediately transferred to the kitchen.  Imbedded in this new system is a forecasting capability which builds up a small buffer components (not finished products) of appropriate items immediately prior to a predicted rush.  VIDEOjtm5
The new system has eliminated the metal warming bins that served as the "warehouse" for their old make-to-stock system. Now, a customer order immediately triggers the assembly of a sandwich. An increase in the use of technology has resulted in faster processes and better communication. VIDEOjtm4
The new process is a smooth customized assembly process that has evolved from what used to be a mass production focus of building hamburgers before they were ordered, and holding them until they were consumed. VIDEOjtm6

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