Knowledge Center: Publication
The case of the missing french friesSubscribe to Consumer Markets 9/21/2017 Brian Klapper
The following case study, drawn from a real-world example, illustrates the critical role a frontline team played in solving a long-standing operational riddle.
Executives at a North American quick-service restaurant chain calculated that their company was losing millions of dollars a year because of cost overruns on french fries. The issue was what’s known as the “french fry efficiency rate.”
If you get paid by customers for every french fry you buy from a supplier, that’s 100% efficiency. But this company had an efficiency rate of just 91%. That sounds good, but given the amount of french fries the company buys, a 9% loss adds up to a lot of money. Even getting to 95% efficiency would add tremendously to the bottom line.
Management spent several years trying to figure out what was happening. Among the possibilities raised were vendors shortchanging restaurants on the weight of the frozen french fries being delivered or sloppy fry cooks spilling a lot of product onto the floor.
One thing the company didn’t try in those years was to assemble in one place the employees responsible for procuring, packaging, and serving the fries. Until that happened, the source of the efficiency gap remained a mystery.
The company decided to take a frontline approach. It convened a team that included a cashier, fry cook, restaurant manager, purchasing manager, and business analyst. All were invited because of their insights into day-to-day restaurant operations. Recognizing that it would be necessary to break free from entrenched thinking, the team launched the initiative with an intensive, two-day working session. (To learn more about how The Corporate Lab works, click here.)
The team then visited restaurants to monitor their operations. It tested ideas and prototyped solutions. In the field, the team saw that the employees were dropping nothing on the floor and threw out little at the end of the day. The team sampled hundreds of bags of fries, concluding that the vendors weren’t cheating on the amount of fries they supplied.
Then a light bulb went off. After a few weeks of observation, the team realized that employees were serving more french fries than their paper containers were meant to hold; sometimes, the fries would spill out onto a customer’s tray. The servers were supposed to give customers 3.5 ounces of fries, but the bags could hold up to 4.2 ounces so the employees filled up the bags. Who could blame them? No one wanted to give customers an unfilled bag of fries.
The team quickly ruled out the idea of training staff not to overportion, as it raised two issues. First, how could managers monitor an employee’s behavior without resorting to a Big Brother approach? Second, the industry suffers from 200% annual turnover in the field, so the problem would never quite go away.
Instead, the team landed on a straightforward solution, one that now seems obvious but had eluded everyone until then. The simple answer was that the bags were too big and so should be made smaller. In a test kitchen, team members cut bags to prevent them from accepting more than 3.5 ounces of fries. In addition to the new, smaller fries bag, they also introduced a different fry scooper. And, notably, this new setup would not require any additional training. In a pilot, the fry efficiency rate rose from 91% to 96% in just a few weeks, opening the way to savings of millions of dollars.
Before creating the cross-functional team, the company had worked for years unsuccessfully to find an answer. It took insight from the front line to cut through the organizational fog that had obscured what turned out to be a simple solution.
About the author
This article is adapted from his book, The Q-Loop: The Art and Science of Lasting Corporate Change (Routledge, 2014).