Improving Processes: Chipotle Mexican Grill This report is to discuss the findings from observations made at the Chipotle restaurant on Orange Avenue in downtown Orlando. Observations were made on Monday August 9, 2010 with the first time frame from noon to 1 p. m. and the second time frame from 3 p. m. to 4 p. m. These observations are used to make recommendations on managing queues, process capability, and statistical process control.
Observations from the two time frames will provide information regarding the process design of customers placing orders, preparation, and payment, employee duties when not preparing orders, along with the number of customers served. A stop-watch and a note pad were used to collect information. According to Chase, Jacobs, & Aquilano (2005) a company must design the product or service to be produced or delivered at a reasonable cost. Chipotle has accomplished this task. Customers receive a made-to-order menu selections consisting of a burrito, burrito bowl, crispy or soft tacos, or a salad.
Selections include chicken, barbecue or free-range pork, and steak along with beans, rice, guacamole, four types of salsa, sour cream, cheese, and lettuce. Beverage items include beer choices. Customers can place orders online with payment on a secure, password protected site, faxing an order form, or using an I-Phone application. Queues A rope divider is used at all times that guides customers to the order point. I visit Chipotle on a regular basis during peak times and I find the system adequate in moving customers through the process. Employees appear well trained in preparing the selections quickly without error.
A sign should be placed to direct the pick-up of phone, fax, or I-Phone orders. Performance Metric and Process Capability The output of Chipotle is the customer purchase of menu items. To gather data for Chipotle’s service process, I collected information on the number of customers served in one hour with respect to the number of employees on the prep line. During the peak time of noon to 1 p. m. 63 customers were served with an average of 57 seconds to complete the order. During the slow time of 3 p. m. to 4 p. m. with 18 customers were served. During the slow time employees engaged in more pleasantries with customers and customers took ore time in choosing items so a little more time was used to prepare the order. Customers and employees likely feel some sense of pressure during peak times to place the order to keep the line moving. When employees were not preparing orders they were busy with other maintenance items such as refilling food items, cleaning, and stocking beverages, bags of chips, the condiment station, and bags for to-go orders. At Chipotle, the process is simple and streamlined as shown in the flow chart at the end of the paper. During my observations, three employees worked the assembly line in both periods.
The steps in building a burrito are: Employee #1: Order taking-the customer orders a burrito and then heats a flour tortilla in a press and places on a foiled wrapping paper and passes to Employee # 2. Employee #2: Employee starts building the burrito with customer choices. Employee scoops additional items from sectioned station bins containing options and layering each item in the burrito. Customer continues to makes selections until no selections remain; the burrito is then complete. If a side of guacamole is ordered then the employee scoops a portion and places it into a separate container and caps.
For dining in: burrito is placed on a tray and passed to the cashier. To-go: burrito is wrapped tightly in the foil paper and marked so the cashier knows what to charge. Employee #3: Dine-in: employee asks if customer wants a drink or chips. If yes, the employee pulls items and places on the tray and rings up the order. If no, employee rings up order. To-go: employee asks if customer wants a drink, chips; if yes, employee pulls items and places in the bag, and rings up the order. If no, employee rings up the order. Employee processes payment in the form of cash, credit, or debit card. For cash payments, cashier takes cash and makes change.
For credit or debit payments, cashier takes card, swipes in the card system where a receipt is automatically printed, hands receipt to customer and customer is on their way. No signature is required. Bottleneck During the peak collection period there was a bottleneck with employee #2 because of the number of items chosen for the order and again at employee #3 when processing payment. Employee # 3 handles the packaging, drinks, chips and payment which when added together equals more time than the two previous steps. Part of this time is because customers are deciding on a beverage and whether they want chips.
Of note, a bottleneck also occurred at employee #2 when adolescent’s were placing orders because they had difficulty making choices among items in part because they weren’t sure if they would like an item or because they were waiting for their friend to make a decision. Recommendations are needed for employee #2 and employee #3. Learning Curve The menu selection at Chipotle is a key factor in the service provided. Selections are in front of the preparer and customer so the learning curve for both is very low; items are placed in the line in the same sequence every day.
An employee can be trained in a few hours because of the ease of use. The quality of the food is high. Chipotle employees are high performers so fewer employees are needed to operate a store. The day of my visit there were six employees: three worked the order line, one on the grill, one to keep the other ingredients ready for use and the store manager. Chipotle appears to be a lean operation. Process Design Chipotle has a basic design process where order taking, food assembly, and payment is in sync. Chipotle offers a self-serve condiment bar.
Chipotle accepts credit/debit cards but does not require a signature, which saves time and makes the process more efficient when it comes to time metric. Chipotle has a short lead time from order placement to order completion. Chipotle offers some food promotions that are also processed quickly. Statistical Process Control During my observations, I did not see any customers return a food item for replacement nor did I observe any food being destroyed because it was considered unusable. Chipotle appears to have controls in place for when to cook the meat to avoid waste. Chipotle can adapt quickly from a slow period to busy period quickly.
The backup system of having items available for replacement in the production line saves time. Chipotle takes pride in offering healthy, high quality food choices from sustainable resources. Chipotle contracts with certain farmers who agree to meet the requirements of Chipotle for the products they serve; products are rarely purchased for use outside the United States. Six Sigma Using the words of Edward Baker, former director of quality at Ford Motor Company, “Until you reach agreement on what constitutes a service defect, your Six Sigma effort will likely disappoint. According to Deming, “People don’t cause defects, systems do” (Harvard Business School, Working Knowledge for Business Leaders). Six Sigma is a beneficial tool to food service for increasing food safety. Six Sigma engages employees to provide problem-solving ideas. At the same time employees feel empowered when engaging in problem-solving solutions. Six Sigma increases service and delivery and measures output so that inputs can be available when needed further enhancing the process and customer satisfaction as well as profits. Recommendations Additional employee
During peak hours four employees can be incorporated into the line increasing station #2 to two employees. One employee can scoop the selections and the other can place the order on the tray, retrieve any chips and beverage for dining-in; for to-go orders, the same items can be retrieved to the counter and the cashier can complete the transaction while the order is bagged. This solution could accommodate more customers during the rush period reducing wait time. Of note, to-go orders using an additional employee could result in slowing the process if this employee and the cashier are not in sync.
During slower times the extra employee can prep food items, stock work and condiment stations, clean, drinks, bags, empty the trash, and allow time for breaks. Menu additions Chipotle should consider adding soup or chili to the menu, create a children’s menu, and smaller portions. Side orders of rice and beans could be offered for those who do not want rice and/or beans in their burrito or tacos. Additional items could cause bottlenecks because more choices would be available but additional items would increase profits and a broader customer base.
A slight learning curve would exist for a short amount of time because the station set-up would be altered slightly and additional tasks would have to be performed e. g. spoon soup into a bowl. Payment Process One recommendation would be to have the cashier only accept payments because multiple tasks for Employee #3 slows the process cycle time. A lower cycle time allows maximum output that increases revenues. Another recommendation would be to install change dispensing registers. These registers would save time and provide more accuracy in dispersing change. To-go Orders
Signage should be placed for customers picking up phone, fax, and I-Phone orders. This is not clearly marked when entering the store and could cause confusion and delays. During peak times, there should be an additional station for prepaid to-go orders so customers do not have to wait in line or cause a delay in the queues because the cashier has to stop and give the customer the order. Any order placed by phone, internet, or fax should be prepaid using a credit card to expedite service. Promotions Chipotle should increase the number and frequency of promotions.
With today’s economy, customers want the best quality for the least amount of money. Chipotle’s main menu items are well priced between $5. 75 and $6. 50 and the portions are large so there is value in the meals. In conclusion, the assembly line process used by Chipotle works well because of the limited number of items on the menu. The core functions of the three employees are on the assembly line with backup food items close by to allow easy retrieval to continue the process. Having to leave the line and go to a kitchen area for more items would significantly impact the process.
Chipotle maintains a strong customer base because a quality meal is sold for a low price with excellent service. Recommendations for prepaid orders and additional employee should be strongly considered.
Building a Burrito Peak Period Building a Burrito Slow Period References Chase, R. , Jacobs, R. , Aquilano, N. (2005). Operations Management for Competitive Advantage. (11th ed. ) McGraw-Hill/Irwin. Harvard Business School, Working Knowledge for Business Leaders. Six Sigma Meets the Service Economy – Six Sigma: It’s Not Just for Manufacturing. Retrieved August 9, 2010. http://hbswk. hbs. edu/archive/3278. html