1. Internal Correspondence Team 8
Date: 1 December 2014
To: Dr. P. Rosenkrantz
Director, Research and Development
From: Adrian Gonzalez
Chadi Najjar
Christopher Kassawat
Evan Atmadja
RE: EXECUTIVE SUMMARY: IN-N-OUT VS. MCDONALD’S
Introduction- In-N-Out has always been known for its quality in the product they sell.
The freshness of their meats and vegetables is what drives customers to continually buy
their product. McDonald’s on the other hand is a restaurant that is not known for
freshness, however it is known for its affordability. Its “dollar menu” exemplifies the
affordability compared to any other hamburger restaurant out there. These are facts
have lied with these companies for years. We decided to put these two different
restaurants to the test. An analysis not on the facts that already exist but analyzing
more deep into the process in which each restaurant goes through to output their
product. An analysis contains such things as there process times and wages for both
restaurants McDonald’s and In-N-Out
Purpose- Both restaurants are different in many ways. One way is that In-N-Out has a
simple menu containing three hamburgers. While McDonald’s has a menu significantly
larger than that not only contains meats but also chicken hamburgers. This is why we
chose to put them to the test on which could be faster to process order from start to
finish. Our first perspective on this fact was that McDonald’s would have to have a much
slower processing time than In-N-Out, since the difference in orders would make it more
complex than just a simple either double or single hamburger.
Both restaurants have not only different ordering menus but in addition their wages are
significantly different. In-N-Out is known to have higher wages than McDonald’s, but
what will higher wages do to an employee. We decided to do an analysis and compare
wages of both these restaurants to get exact values on how different these wages could
be. Hoping that maybe we can see a reflection of pay on differences from the
employees such as their mood at work or their quickness to process orders. We as a
team believe that a high paid worker will have different attributes than one whom is paid
less.
Analysis and Results: We conducted Time studies on two locations. One In-N-Out
restaurant and one McDonald’s restaurant. We took times from when a person orders
2. Internal Correspondence Team 8
his meal till when he receives it. After analyzing our data and plotting it on a bar graph
(attached in the back) and computing an average we saw that McDonald’s was
significantly faster. We then analyzed the process flow of the product and saw the
differences from the restaurants. Our observation showed that In-N-Out would start their
products fresh every time someone would order. The process the hamburger would go
through every time was the same but the material was raw and had to be prepared. This
meant that In N Out would work in a push system. While McDonald’s was much
different as they run on a pull system, there product was already pre-cooked all they
would do is heat up what they already had frozen. (Please reference our value stream
map on back). This fact brought us back to realizing that the difference of freshness
affects process time significantly. In fact according to our times the process time of the
In-N-Out is almost double of the time at McDonald’s.
Next, after researching various sites to compare wages from both restaurants we came
to a conclusion that the employees starting at In-N-Out have a significant difference in
pay than those at McDonald’s. So we decided to analysis the employees and see how
this difference in wages would affect them. After asking various employees questions
about the restaurant for whom they worked for we saw that there was a huge difference
in mood towards the job. Most of the McDonald’s employees were shallow and seemed
to be frustrated to be at work. The employees at In-N-Out were more approachable to
ask questions of their product. Next we analyzed how well trained these employees are
at what they do to see if wages would also affect this. However we saw that at both
restaurants the tasks that were given to the workers were not to complex for them. Both
restaurants employees knew what they were doing to give the customer his finished
product.
Recommendations: Through our observations we concluded that certain
recommendations may be given to both Mcdonalds and In-N-Out in order to improve
efficiency and flow. For one the non-handicapped accessible drive through of
Mcdonalds proves to be a very obvious design flaw. The ordering window was placed
on the wrong side. It will be more time efficient if it’s placed on the correct side.
Secondly, both restaurants may want to start implementing more drive thru lanes since
most of their sales come from drive-thru. McDonald’s may also want to start increasing
the worker’s wages, since it’s been proven that happier worker leads to better service
and product quality.
Conclusion: After our research was conducted on both organizations, we were able to
see the difference in process flow. We witnessed the difference in the push system
which Mcdonald's would run and the Pull System that In-N-Out would run. The flow
process is the reason why our time studies gave us our results and Mcdonald's was
much faster than In-N-Out. In addition, we realized that the difference in wages from In-
3. Internal Correspondence Team 8
N-Out and Mcdonald's reflected on the employees mood towards customers. In-N-Out
staff was much friendlier to us then the staff at McDonald’s.
