Wall Street Journal - May 18, 2000
An Efficiency Drive: Fast-Food Lanes, Equipped With Timers, Get Even Faster
By JENNIFER ORDONEZ Staff Reporter of THE WALL STREET JOURNAL
DARIEN, Ill. -- "HimayItakeyourorderplease?" says the drive-through greeter at Wendy's Old-Fashioned Hamburgers.
This greeting takes only one second -- a triumphant two seconds faster than is suggested in Wendy's guidelines -- and the speed of it was clocked by a high-tech timer installed this January. In just three months, the timer -- which measures nearly every aspect of drive-through performance -- helped knock eight seconds off the average takeout delivery time at this restaurant. But manager Ryan Tomney wants more. "Every second," he says, "is business lost."
At 25 fast-food restaurant chains ranked in a recent study, cars spent an average of 203.6 seconds from arrival at the menu board to departure from the pickup window. At Wendy's, the nation's third-largest hamburger chain, that time was significantly shorter -- at 150.3 seconds. This made Wendy's 16.7 seconds faster than McDonald's, 21 seconds faster than Burger King, and second to none.
"Most chains would sell their first born to get that speed," says Jack Sparagowski, whose independent market-research firm, Sparagowski & Associates, conducted the study on behalf of industry trade magazine QSR.
Yet far from gloating, Wendy's is scrambling to improve its drive-through speed, and for good reason. Not long ago, drive-through was a hole punched through the wall to supplement dining-room sales. But today, almost 65% of fast-food revenue is coming through that hole. Between 1997 and 2007, sales of meals to be eaten off premises are expected to grow three times faster than on-premise sales, according to Franchise Finance Corp. of America.
Now that most of the best locations have been nabbed -- new restaurant growth among the 100 largest chains slowed last year to its lowest level in recent history -- drive-through may be the final battleground for fast-food market share in the U.S. It is "critical because it's over half of our business," and is the part of McDonald's "most susceptible to growing," says McDonald's Corp. Chief Executive Jack Greenberg. For every six seconds saved at the drive-through, he says, sales increase by 1%.
Indeed, Wendy's competition isn't far behind. Using product development, employee retraining and new technology, McDonald's, Burger King, Arby's, Taco Bell and others are all gunning for the drive-through market. The latest menu addition at McDonald's is aimed expressly at the drive-through customer -- salad in a container that fits in car cup holders. Arby's is working on what its president calls a "high viscosity" version of its special sauce that is less likely to spill. Burger King is testing see-through bags that allow customers to quickly check that all items are included.
The Hard Drive
Even chains that never have put much stock in drive-through operations, such as Starbucks and Dunkin Donuts, have begun building them. The drive-through window "is now driving disproportionately large growth in dollars," says Wendy's Chief Executive Jack Schuessler.
The chain that most consistently offers the fastest service will attract more customers. Regular drive-through customers know that a six-car line at one chain is likely to move faster than a three-car line at another. By some estimates, increasing drive-through efficiency by 10% bolsters sales at the average fast-food restaurant by $54,000 per year. Last year, the average fast-food restaurant did about $560,000 in sales.
-------------------------------------------------------- Who's the Fastest?
Top-five 1999 average drive-through times --
From menu board to departure:
COMPANY TIME Wendy's 2 minutes, 30 seconds McDonald's 2 minutes, 47 seconds Checkers 2 minutes, 49 seconds Burger King 2 minutes, 51 seconds Long John Silver's 2 minutes, 52 seconds
Source: Sparagowski & Associates
--------------------------------------------------------
To boost speed, some restaurants are remodeling. Burger King, the second-largest chain, plans to fit company-owned restaurants with separate kitchens for drive-through customers -- something Wendy's International Inc., Dublin, Ohio, instituted years ago. Burger King says its drive-through improvement plan will facilitate employees "beating the car to the window with the food." In lobbying its franchisees to add drive-through kitchens, Burger King says it "could further increase average restaurant sales by hundreds of thousands of dollars per restaurant."
Other chains are hoping technology will rev up speed. McDonald's last month began testing technology that allows drivers to bypass the cash window entirely with the same windshield transponders that automatically pay highway tolls. The gadgets are scanned when the driver passes the menu board, with purchases billed to their monthly toll-road accounts. The system, which is being tested for three months in California, is estimated to shave 15 seconds off drive-through time and boost sales by at least 2%. McDonald's plans to test the technology in other regions.
The timer is fast becoming one of the most popular speed-enhancing devices. Using underground sensors placed at various points on the drive-through lane, the device measures to the second how long it takes cars to progress from the menu board to the cash window to the pickup window -- then how long it takes to complete an order. Managers can print detailed summaries of drive-through times including the average wait at each interval and even how many cars pulled out midway through the process after having placed an order.
Although drive-through timers have existed for many years, they typically were used to measure only the number of seconds a car waited at the pickup window. Recent refinements have enabled them to measure drive-through stages in far more detail, however, sounding alarms -- beeps, sirens and even voices congratulating or admonishing crews -- depending on the length of orders. At about $2,000 each, timer sales on average have doubled each year since 1994, says San Diego-based HM Electronics Inc., which makes and sells the devices. Taco Bell, a unit of Tricon International Inc., recently mandated timers at all company-owned stores and is testing other technology designed to improve accuracy, like order-confirmation boards that show customers summaries of their orders on a display screen.
The attempt to turn drive-through into a science inevitably encounters two wild cards: employees and customers. Management at big chains insist that employees like the timer because it turns their work into a game -- can I make 300 consecutive sandwiches in less than seven seconds each? But working in the new world of sensors and alarms isn't always fun.
'It Keeps Counting'
After nine months at a Taco Bell franchise in Lawrence, Kan., night manager Tiffany Swan Holloway vows never again to work in fast food. Her small night crew had a hard time keeping up with the chain's 60-second window-service goals and a constant stream of cars that usually numbered in the hundreds, says Ms. Holloway, who recently quit the $7.75-an-hour job. And then there was the timer.
"It beeps and it keeps counting," Ms. Holloway recalls. "Nobody liked to be on drive-through."
Customers are another problem. Wendy's trains cashiers to hold their arms out the window, offering change to the dollar, thereby pre-empting customers from rooting around for coins and wasting valuable seconds. But "they're looking anyway," laments cashier Pastor Tequimila on a recent day here at the Darien Wendy's. His station today is blowing its budget by 25 seconds per car.
Big orders can gum the works, too. At the very instant that some McDonald's executives -- eager to show off their speedy new toll-transponder technology -- arrive with visitors at a southern California franchise, plans are foiled by the driver of the minivan just ahead, who wants a dozen Happy Meals. "It might take a little longer," a store manager informs the executives.
'Quality Is Our Speed Limit'
The biggest price of speed, however, is accuracy. The same study that showed Wendy's on top in speed ranked it 11th in accuracy, something Wendy's would like to improve. "Quality is our speed limit," Mr. Tomney, the Wendy's manager, likes to say.
A customer who arrives home only to find something missing or wrong with his order is unlikely to take much comfort in how quickly he zipped through the line. University of Kansas student Clint Toland and his girlfriend recently drove through a Taco Bell to get a late-night meal of nachos with meat but no beans. Back at home, a discovery: beans and no meat. "My girlfriend was in a bad mood because she was starving," Mr. Toland says. "I'm never coming back again."
To address this problem, Burger King is testing an intercom at the end of the drive-through lane. Customers can press it if after leaving the window they discover too few napkins or ketchup packets, or something missing from their order.
As long ago as the 1930s, some enterprising hamburger stands installed crude intercoms and introduced drive-through. But it wasn't until the late 1970s that drive-through became an institution -- when Wendy's founder Dave Thomas made them a staple of his then fast-growing chain. Mr. Thomas's thinking wasn't rocket science: drive-through windows bolstered sales without using up dining-room space or extra labor. When it became clear that Wendy's enjoyed higher profit margins and lower labor costs than its competitors, the idea began to spread, according to "Fast Food," a recently published history of the industry.
Kitchen Choreography
Wendy's remained a leader, pioneering the chainwide use of separate kitchens that allowed made-to-order sandwiches to be churned out quickly. With competitors now copying those advantages, Wendy's recently launched its new efficiency program. The effort involves a combination of new timers, kitchen choreography designed to eliminate unnecessary movement, and wireless headsets that let all workers hear customer orders as they come in.
Wendy's says the first region to implement the program saw sales increases of 3% to 4% above Wendy's units in the rest of the country. Market-research firm Technomic Information Services confirms that Wendy's takeout sales last year increased by 12%, vs. 8.3% at McDonald's and 3.1% at Burger King.
A visit to the Wendy's here in Darien shows how ambitious the program is. The store, which already had an average drive-through time of less than two minutes -- far beneath the chainwide average and even further below the industry average -- has been designated a model for other managers. Still, there is room for improvement.
"I know we can attain 90," says Mac Shimmon, division vice president for all Wendy's Chicago-area stores, who is visiting the Darien store this day. By that, he means a 90-second average. To Mr. Shimmon, time reduction is almost a religion: "When times are down to 130 seconds," he says, "that's when customers believe" that the drive-through is fast. "At 100 seconds -- now you've got an emotional attachment."
But 90 seconds? Mr. Tomney, 29, says he will try. The new timer will help. It emits a series of loud beeps every time an order isn't filled within 125 seconds. "If there's a problem," Mr. Tomney says, "the timer tells me where it is." But the problem is almost always an employee, and demanding improvements is tricky in an industry that at some chains averages as much as 200% turnover annually. Wendy's managers have been trained to give peppier pep talks. Like some of its competitors, Wendy's rewards good service with gifts such as special pins and skid-resistant shoes. Wendy's says its turnover rate fell from 200% in 1998 to 181% last year.
Certainly, the seven drive-through employees demonstrate incredible concentration and effort during a recent lunch hour. The griller keeps 25 square burgers sizzling on the grill ("Not enough," Mr. Tomney says) and, within five seconds of a customer's order, places one on a bun. Once the meat hits the bun, the griller hands off to the sandwich makers, who have no more than seven seconds to complete each customized creation.
Watching the operation, Mr. Tomney looks for ways to save time. The bun grabber retrieves buns from the warmer the instant she hears a customer order through her headset. But watching her wait for customer orders, Mr. Tomney sees a second that could be saved. Her hands aren't positioned.
"Two hands on the bun-warmer door as the order is being placed, just like you're taking the frisk position," her manager demonstrates, hands against the wall, legs slightly spread.
Also watching is Mr. Shimmon, the division manager, who cries foul when a drink filler, recruited momentarily to the sandwich-making line, fails to take the spot closest to the drink station. Mr. Shimmon instructs Mr. Tomney to tell her to do so, "so when she's done helping she can just slide back into position. Those are the small things that in a three-hour lunch can make a difference," Mr. Shimmon says.
The little things are adding up. One recent week, the drive-through average at this restaurant was 109 seconds. On one day that week, a store record was clocked: a 94-second average, just four hard seconds away from the boss's goal.