For years, McDonald’s and Burger King (BK) have been the world’s two largest and most successful fast food chains. Both have battled out all these years over their operational differences which form the core of their corporate culture. The “Doing It All For You” (McDonald’s) vs. “Having It Your Way” (BK’s) stems from their respective production methods. McDonald’s “Made to Stock” vs. BK’s “Made to Order” also originate from the differences in their respective processes. Exhibits 1 and 2 show the Process Flow Diagrams (PFDs) of McDonald’s and BK respectively.
Exhibit 3 provides a detailed comparative analysis of the PFDs of these two fast food chains. The main operational difference between McDonald’s and BK is that McDonald’s cooks their hamburgers on grills using a “batch process” (a batch of upto 12 patties/grill) with human intervention to turn, sear, and pull. BK uses the machine based – Continuous Chain Broiler assembly process (8 burgers/meat chain) for the production of their burgers – similar to an assembly line in a manufacturing process thus, requiring no human intervention. For a “made to stock” process, it requires burgers in bulk and hence the batch process in McDonald’s.
Whereas, for a “made to order” process, it requires an assembly chain process where meat patties are placed at one end and after 80 seconds they come out the other end, cooked – one by one. Also, since BK harps on “make to order” process, it requires a semi-finished inventory – Steam Table in which mated buns and patties sit for 10 minutes and then discarded. In McDonald’s “continuous process” there is no such inventory and all the buns and patties are mated during the assembly process following the dressing. It should be noted that mating of the buns and patties before the assembly process in BK is a result of BK’s variety of menu.
Whoppers and Burgers both are of different sizes and hence the mating before assembly process. McDonald’s menu “Less product more often” offers standardized burgers. This cost of complexity is a huge cost driver for BK. The “dressing process” of McDonald’s is standardized with lever based dispensers and portion controlled condiments. In BK, dressing is done by humans using plastic squeezed bottles without pre-measured quantity. This is where McDonald’s is ahead of BK as can be seen from the statements – BK spends 1. 1% of their sales in condiments (wastage). Exhibit 4 provides a comparative analysis of the operating results of both chains.
Also, absence of pre-determined quantity of sauces/condiments causes variation and can affect taste and quality. Due to their “made to order” philosophy, BK uses microwave ovens to produce warm and fresh burgers. The high costs incurred by BK in “utilities” (2% more than McDonald’s) is a direct result of both a machine based cooking process and use of microwave ovens.
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