Thursday, August 10, 2006

Kitchen synching?

Less than a decade after retrofitting its kitchens in the costliest capital-improvement program ever undertaken in foodservice, McDonald’s is overhauling its back-of-the-counter set-up again. Twice, in fact.

Management told a handful of analysts last week that it plans to supplant its ballyhooed Made for You prep system with a more adaptable ordering and cooking “platform,” tech-ese for “design.” Until that new set of equipment and procedures is fully developed, the chain is outfitting units in troubled overseas markets with a temporary configuration known internally as the Bridge. It combines elements of Made for You with aspects of the chain’s traditional grill set-up, which dates from Ray Kroc’s days.

Executives say the two-phase update is necessary because the business varies so widely today on a global basis, with different sorts of restaurants serving far-different products to diverse groups following their own peculiar schedules. “We’ve learned that one size does not fit all,” said CEO Jim Skinner. “So we’re working on a next-generation operating system,” with “flexible components that can be plugged in, depending on the restaurant’s needs.”

Ironically, customization and flexibility were the two main rationales for the switch to Made for You, a highly computerized set-up that holds burgers in special heat-and-moisture-controlled cabinets. Introduced with considerable fanfare, the system was expected to end the chain’s reliance on batch-cooking, whereby a few dozen hamburger patties were grilled at one time. Because the sandwiches were wrapped and held until someone ordered them, they often cooled considerably before being consumed, leaving customers dissatisfied with the taste.

With Made for You, each sandwich would be prepared to the customer’s specifications at the time an order was placed. It was expected to improve perceptions of McDonald’s food without an increase in serving times.

Made for You was also seen as more versatile, in that it could be used for a broader array of menu choices than McDonald’s offered at the time.

But the system failed to meet the hopes of investors and franchisees, who, according to McDonald’s per-unit cost estimates, collectively paid several hundred million dollars to install Made for You.

McDonald’s didn’t offer a cost estimate for either the Bridge or the Phase Two platform, tentatively dubbed the Flexible Operating System. But Skinner did tout the payback, including a capability to handle new types of menu items. He also said the Flexible configuration would “enhance the work environment of the crew,” but did not provide an explanation.

The Bridge is already being tested in “countries that need help with their operations now,” said Skinner, citing the examples of the United Kingdom, France and Germany. He added that 1,500 more outlets, franchised and company-run, will be retrofitted with a Bridge system during the next year.

No timeframe was given for the development of the Flexible Operating System, nor how many units might be ultimately retrofitted. “This is not something that we’ll be doing in every market,” Skinner said.

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