Fast food is supposed to be, well, fast. But is speed everything? If you think about how different chains advertise, they are often emphasizing price or some expansion of their offerings. Essentially no one ever says that they will get you on your way in two minutes. Speed is taken as a given but there has to be some interplay between the range of what a firm offers and how fast they can serve customers.
That gets us to QSR Magazine‘s annual survey of drive-thru lane performance (The Drive-Thru Performance Study, Oct 2013). Drive thrus matter since they can account for 60 – 70% of sales and QSR’s survey is something of an industry standard since they have been at it for 15 years. You can find information on their methodology here and a paper co-written by Gady that uses this data here. The most interesting insight from the survey comes from comparing data on service times (i.e., how long does it take from when you get to the order board until you have your bag of food) this year with last year.
As the data shows, service times are getting slower as a whole. The industry average went up about 5% from 172 seconds to 180. What’s driving the increase?
One issue is what I hinted at above: Firms have increased their offerings and in particular have introduced more complex items. That requires more work in assembling orders and puts a greater emphasis on getting the customer just what they want.
Similar to speed of service, the complexities involved with new menu items are affecting the way the benchmark brands approach accuracy in the drive thru. Lynch uses Wendy’s Berry Almond Chicken Salad as an example of a premium product that throws a wrench into the drive-thru process. The salad comes with dressings, almonds, and croutons in separate packages and can be customized based on how the customer designs the order. “Those things, the customer likes, but it makes it tougher in the drive thru to make sure you have all of the condiments and the extra ingredients that go with the whole meal,” Lynch says. “So order accuracy becomes a constant point of emphasis.”
Savage shares a similar story in regards to Taco Bell’s new Cantina Bell menu. The burritos and bowls have nearly 10 ingredients, he says, making it the most complex product line the chain serves. Taco Bell has rolled out special training procedures to ensure employees are able to consistently serve the right product. Another system that ensures accuracy at Taco Bell is a triple-check system, Savage says. At most restaurants, orders are confirmed through an OCB, the crewmember repeating the order to the customer over the speaker box, and then an employee repeating the order one final time at the pick-up window.
QSR reports that these chains have in fact improved their accuracy over time. At the time of their first survey, accuracy measures ranged from 61.8% to 83.9%. Now all firms are over 79.5% and the industry average is 87.2%.
So what is going on here? It seems to me that firms are making a very deliberate tradeoff between speed and other measures so their operations can support the marketing messages they are putting out. Competing purely on speed seems expensive and perilous. Drive thru customers are going to care more about the total time it takes get one’s food (i.e., time in line as well as service time) and no one can really guarantee those times since they are subject to too many things that the firm cannot control. For example, a firm cannot tell customers not get in line when it’s too long. If anyone offered a discount if you wait more than 7 minutes, a lot of people would pile into a long line to score the discount. Suppose that despite this, a firm were to try and separate themselves based on service times. That would likely mean carrying extra capacity and probably altering restaurant kitchens. That is all expensive and probably challenging to cram down franchisees’ throats.
Instead, the firms are settling for being fast enough. Sliding a bit on service times — as long as it doesn’t get crazy long — is acceptable because it let’s the firms distinguish themselves. A unique salad offering separates Wendy’s from McDonalds’ and potentially draws a premium price. The question is at what point would service times become a problem. That is, at what point does greater product variety stretch out service so long that a new salad or taco just ain’t worth it?
The Operations Room 
Marty – Insightful blog and a very interesting post. Modularization and postponement strategies have been effective in other industries as a means to manage complexity while being responsive to customer demand. Do you think there is an opportunity for fast food firms to be more modular in product offerings, thereby providing variety while not sacrificing speed?
I think fast food is already pretty modular. Taco Bell can throw the same meat like product in a taco, in a burrito, or on a salad. Similarly, a salad can come with any number of dressing. I think the challenge becomes assembling a varying stream of orders with an increasing number of options while minimizing the number of errors. Said another way, it is the modularity of the current system that is causing them problems by creating so many options for customers.
Thanks Marty for posting this extremely interesting article. The insights drawn are extremely interesting. I guess service times are no longer a point of competitive advantage, but getting reduced to a point of hygiene. Your findings are also in sync with what Roger Schmenner (2004) speculated some years ago. As per that paper, if one created a graph of relevant throughput time (HI,LO) and degree of variation in service(Hi,LO), everybody would want to get to the diagonal of the matrix ; but the top-left (LO,LO) is where maximum productivity lies. He added a caveat saying, profitability may not necessarily coincide with productivity and people can be highly profitable even in Q4 (Hi.HI). However firms should still strive to hit the diagonal. I guess what we are observing a manifestation of this. The QSRs that were on the diagonal were all continuously climbing towards the top-left corner. They see to have changed direction now. As a consequence of introducing newer varieties, they have got swept off their diagonal position. But once the full effect of greater modularity and quick assembling strategies kick-in, as a general trend we may see them hitting the diagonal; albeit at a much lower position with higher TPTs.
[…] is pretty much the reverse of what has happened in the US quick service sector. As we discussed earlier this month, service times at fast food drive thrus have been creeping up over the last several years as chains […]
[…] has been in a funk and their drive thru times have been climbing (along with the time of many in the industry). So this offers customers some assurance and maybe puts a little competitive pressure on some of […]