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Breakthrough at the Drive-Through 26 July 04 "This transforms my business. It's bigger than drive-through." Steve Bigari, McDonald’s franchisee, in The New York Times
Outsourcing continues to expand, often into unexpected areas. Consider this: when you pull up to the drive-through at a few innovative McDonald’s locations in the US and place your order, the person you talk to through the speakerphone is no longer in the restaurant where your order is being prepared. Instead, she is in a call center thousands of miles away, in Colorado Springs, Colorado. At the call center, the operator takes your order and takes a digital picture of you in your car. She then sends the information back to the people preparing your order at the restaurant. Here’s the basic idea:
This system is more productive than the traditional configuration, in which the order-taker is co-located with the food preparer. Steven T. Bigari, the McDonald’s franchisee who developed the system, reported to The New York Times that he was able to reduce order time in his Missouri drive-throughs by about 35 percent. Thanks to remote ordering, his drive-throughs can now handle almost 15 percent more cars an hour. They do so at less than half of the error rates of most drive-throughs. Bigari’s drive-throughs now make mistakes on fewer than 2 percent of all orders, down from about 4 percent before he started using the call centers. Thanks to the productivity gains, Bigari can reduce his costs even as he pays the call-center employees about ten percent more than his line employees at the restaurants. This is exactly the kind of initiative that a franchising system is designed to encourage. Franchisees own 85 percent of all McDonald’s restaurants. They are constantly looking for ways to make money within the operating system prescribed by McDonald’s corporate. In theory, franchise owners should be undertaking lots of innovative experiments and making money from the ones that are successful. This is called “bottoms-up” innovation, and it is what Steve Bigari is practicing in his drive-through innovations. While Bigari owns twelve McDonald’s restaurants in Colorado, other McDonald’s outlets also use Bigari’s system. These stores pay him a per-transaction fee to handle the order-taking from his call center in Colorado Springs. Bigari’s business enterprise now extends beyond the restaurant franchises that he owns to include a drive-through order-processing business. This kind of business didn’t exist until Bigari created it.
What does McDonald’s think?
Over the years, McDonald’s has tightened the control on its operating systems. While Bigari’s innovation is “bottoms-up,” most of the innovation at McDonald’s is “top-down.” New products and concepts, ranging from new products to new promotions to new kitchen layouts, come from headquarters in Illinois. Franchisees must adhere to the system specifications or risk losing their franchise. Consistent with this top-down approach, McDonald’s Corporation is testing the call-center concept in three company-owned stores in Illinois, using a software provider and process that are different from Bigari’s. As Jim Sappington, a McDonald's vice president for information technology, told The New York Times: “It’s ‘way, way too early’ to tell if the call center idea [will] work across the 13,000 McDonald's restaurants in the United States.” Extensions It’s not too early for Steve Bigari. He’s been perfecting this approach for six years, and is now developing extensions: Ř Call-centers for walk-ins. At many of his restaurants, the Colorado call-center handles walk-in traffic as well as drive-through. Walk-in customers have a choice. They can place their order with the person behind the counter, as in a conventional fast-food restaurant. Alternatively, they can sit at a table, pick up a phone, order with a call-center operator, and pay with a credit card. No more waiting in line – the counter staff will even deliver the food to the table.
Ř Call-centers for cell phones. This summer, Mr. Bigari plans to begin using his call-center to take orders via cell phone. The local restaurant becomes the pick-up point for a product that’s been ordered by phone.
Next stop – India? Bigari is able to make his call center work so well because of the speed and reliability of US voice and data networks. It turns out that the digital photo which matches the order with the person is a vital element in reducing errors in order processing. This business requires reliable broadband to rapidly send the digital photo back and forth across the country. As global communications systems become as cheap and reliable as those in the US, perhaps the next call center for McDonald’s drive-throughs will be offshore. In a couple of years, when you order at the drive-through window of a McDonald’s restaurant, the voice coming out of the loudspeaker might originate in Mumbai or Delhi rather than in Colorado Springs.
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