Outsourcing

McDonald's, the world's largest restaurant chain, is trying out remote call cent
ers to handle drive-thru orders in to efficiently improve service. Officials fro
m the company say that the idea of testing this method is aimed at reducing the
number of mistakes at the drive-thru window. The way there are reports from this
strategy is based on the theory that mistakes come from the order-taker, not th
e cook line. Sending orders directly to a call center and back to the grill coul
d also allow McDonald's employees to focus on delivering better customer service
. The job is a professional order taker with strong communications skills whose
job is to do nothing but take down orders. A "heavy percentage" of complaints th
e company receives are from drive-thru customers who got the wrong order. Even i
f 95% of the time it is right, those 5% are very upset. McDonald's says it s too e
arly to say whether the outsourcing strategy would be implemented system wide. I
mproving its drive-thru is one of the latest initiatives in McDonald's more than
two-year-long effort to revitalize sales. The company's flagship U.S. business
has benefited in the last year from the introduction of healthier menu items lik
e entree-size salads and apple slices, later hours and cashless payments. McDona
ld's European business, however, has lagged behind the United States in part due
to economic weakness in places like Germany. Representatives say the company is
making the right moves in Europe by introducing new menu items and focusing on
lower-priced offerings, but warned that a turnaround would not be as strong as t
he company has experienced in the United States.
With the trial project that serves 40 McDonald's in the US, including Hawaii, it
is being displayed within the public. When a customer rolls up to the order boa
rd, their conversation is actually routed across the Internet to someone working
to a call center. Call center employees are specifically trained to be fast, po
lite, and to up sell or, advising the customer on getting more out of the product.
The employee then enters the order into a computer, which routes it back over t
he Internet to the local McDonald's, which assembles the requested items.

Cost and Efficency

Efficiency is the watchword at Bronco Communications, the company that runs the
centers. In order to keep its employees taking up to ninety-five orders per hour
, the company tracks their performance. Software tracks employee s productivity an
d speed, and every so often a red box pops up on their screen to test whether he
/she is paying attention. They are expected to click on it within 1.75 seconds.
In the break room, a computer screen lets employees know just how many minutes h
ave elapsed since they left their workstations. While the call-center idea has r
eceived attention since a scattered sampling of McDonald's franchises began test
ing, most customers are still in the dark. For consumers still getting their foo
d came with a small helping of the surreal. When customers get their order said
back to them from a call center more than two hundred miles away, they find the
concept bizarre."And the order-taking is not always seamless. Often customers' vo
ices are faint, forcing the workers to ask for things to be repeated. During rec
ent weather situations, it was particularly hard to hear orders from over the di
n.
With obstacles to the spread of the system that drive-through restaurants use, t
he software works only with one company's point-of-sale system, and only seven o
f McDonald's roughly 1,400 franchisees use that system. Because such systems typ
ically cost $25,000 to $50,000 a restaurant, it may prove cheaper, though slower
, for McDonald's or other big chains to develop their own systems.Franchisees of
two other McDonald's restaurants have outsourced their drive-through ordering.
Central to the system's success, it pairs customers' photos with their orders. W
ith this increasing accuracy, the system decreases the number of complaints and
therefore makes the service faster. In the fast-food business, time is truly mon
ey. Shaving even five seconds off the processing time of an order is significant
. These tests with outsourcing McDonald s drive-thru centers will make the world a
fast an evolution of how we view fast food.
Downside
Although technology has changed for drive-thru, the outsourcing revolution has c
ome to an unlikely place: the local McDonald's quick-service restaurant. No long
er just a way for companies to cut costs on their helpline or offer inexpensive
tutoring on the web, outsourcing is now seen as way to make the drive-through ex
perience more efficient, which translates into more cheeseburgers sold. Taking a
look inside the world of minimum-wage order takers and the picture isn't pretty
for the order takers, but for the company it seems to work great. Basically, th
e experience of working as a long-distance listener is a lot like working in a c
all center anywhere. The factors are low pay, electronic monitoring, and row aft
er row of cubicles. The upside is that you don't need to empty the grease traps
at the end of your shift, a job that will make you grateful for your current emp
loyment, whatever it is.

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Questions
1.) Discuss the advantages and disadvantages of McDonald's outsourcing drive-thr
u's.
2.) Explain what the main drivers of outsourcing are for this case and how these
factors help McDonalds take the right approach.
3.) What would be a good model to use in this technology, Full or Selective? Why
?

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References
1.) Anderson, Nate. "Outsourcing the Drive-Through." ARS. 11 Apr. 2006. 29 Mar.
2008 http://arstechnica.com/news.ars/post/20060411-6574.html.
2.) Fitzgerland, Micheal. "A Drive-Through Lane to the Next Time Zone." The New
York Times. 14 July-Aug. 2006. 29 Mar. 2008 http://query.nytimes.com/gst/fullpag
e.html?res=9C0DE2D9153AF93BA25754C0A9629C8B63.
3.) Ritchell, Matt. "The Long-Distance Journey of a Fast-Food Order." The New Yo
rk Times. 11 Apr. 2006. 29 Mar. 2008 http://www.nytimes.com/2006/04/11/technolog
y/11fast.html.

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Answers
1.)
Advantages:
Employees can focus more on customer service within the restaurant.
Call centers can provide more accuracy in the order taking.
Call centers can speed up the ordering process and generate more revenue for the
restaurant.
Disadvantages:
System crashes could create big problems for the restaurants.
Weather has the ability to impair the order takers which could result in inaccur
acy.
Call center workers have a great deal of responsibilities.
2.)
The main drivers involved are to reduce time, increase accuracy, and maximize pr
ofits.
The outsourcing helps with this because having a call center will free up in-hou
se employees to perform other tasks. It will also increase accuracy because usua
lly in-house order takers have other tasks besides taking customers' orders. In
conclusion, it will speed up processes which will decrease the amount of time fr
om order to order, resulting in more revenue.
3.)
The model that is mentioned in the article is the use of selective technology. T
his is because certain specialists that are experts in the order taking process
are used. It is also considered selective because the order taking process is al
l that is outsourced. Everything else is done in-house and is taken care of by t
he employees within the building.