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OM in the News: New Product Design is Choking McDonald’s

December 10, 2014

mcdonalds2“McDonald’s menu may have grown too big to succeed,” writes The Wall Street Journal (Dec.4, 2014). The fast-food giant has added oatmeal, snack wraps and lattes to its offerings in recent years to appeal to a wider swath of customers. But swelling menus have made the company’s kitchen operations increasingly complex. Its McCafé drinks, for example, require a separate station behind the counter equipped with coffee grinders and blenders, causing longer waits. The menu has expanded from 85 items seven years ago to 121 today.

McDonald’s isn’t alone in struggling with the temptation to add too many new products. General Motors expanded its offerings for decades only to kill off its Saturn and Pontiac brands in 2009. The typical U.S. grocery store now stocks up to 50,000 products, up from 15,000 in 1991.

Some products can stall the food-assembly line. The Premium McWrap, —a 10-inch flour tortilla is referred to as a “showstopper” behind the counter. “Our kitchen comes to a halt when we get an order for a McWrap,” says one franchisee. It’s supposed to take 60 seconds or less to assemble the ingredients, fold them in the tortilla and squeeze the McWrap into a box. But it usually takes some 85 seconds–too long given McDonald’s goal of getting customers through its drive-throughs in 90 seconds or less. Last year McDonald’s clocked its slowest average speed of service in the past 15-years: 189.49 seconds, more than twice the chain’s goal.

“The totality of the products we’re serving is what’s challenging us,” says another manager. “We’ve recognized that we’ve overtaxed our restaurants and need to take a step back on that.”

Classroom discussion questions:
1. Why does McDonald’s continue to add menu items?

2. Where do you think McDonald’s falls in figure 5.1 on page 156 of the text?

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