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Source link: http://archive.mises.org/17177/fast-food-is-beautiful/

Fast Food Is Beautiful

June 2, 2011 by

An absolutely thrilling article appears in Bloomberg Businessweek: Taco Bell and the Golden Age of Drive Through

Those who put down this industry are completely uncomprehending about its significance in terms of technology, entrepreneurship, social service, and human well being. It is a microcosmic culmination of human progress from the beginnings of the industrial revolution to our time, an archetype of human cooperation and capitalist risk taking has brought joy to the most fundamental of all material impulses: the need to eat.

Every Taco Bell, McDonald’s (MCD), Wendy’s (WEN), and Burger King is a little factory, with a manager who oversees three dozen workers, devises schedules and shifts, keeps track of inventory and the supply chain, supervises an assembly line churning out a quality-controlled, high-volume product, and takes in revenue of $1 million to $3 million a year, all with customers who show up at the front end of the factory at all hours of the day to buy the product.

(Thanks Steve Horowitz)

{ 35 comments }

John Brock June 2, 2011 at 9:11 am

I think the “need to eat” is what made this industry a natural fit for micro-factorization (not a word/phrase, but it works). No other process fits so well. In fact, they are so closely related that one could not exist without the other. They are codependent.

Ned Netterville June 2, 2011 at 11:48 am

I’ve ridden my bicycle on the “blue highways” (http://en.wikipedia.org/wiki/Blue_Highways) from OH to NH and south to WV, which is a great way to more closely observe the goings on in small towns that dot the map in that part of America. In some places the McDonald’s restaurant often appears to be the highest-grossing business in town and the only place where the locals can meet and eat with their neighbors, particularly during the breakfast hours. In other small communities a gas station with fast food and seating available, some of which are often open all night on busier highways, is all there is. Some of these provide pretty good eats at reasonable prices and seem to do a good business.

Inspector Ketchup June 2, 2011 at 1:00 pm

It’s probably not like that in every McDonald’s restaurants in the world, but the one closest to my house and where I eat all the time seems to suffer from poor organization and have no concept of division of labor.

Customers get overcrowded around one or two cash registers and there is no definite line so it becomes a mess to figure out who’s waiting in-line to give his orders, where the line starts and who’s waiting outside the line to be served, a real chaos.

Then, the cashiers who take the orders frequently leave their cash register posts to prepare drinks, coffee and other parts of the order in no particular order. Sometimes it’s another employee which attends the cash register while the previous one attempts to complete previous orders in no particular order.

This generates confusion, unacceptably long waiting times both to order your food and to receive your food. Sometimes orders get lost. People are all crowded in the same corner, blocking other customers from ordering. You have to shout your orders at the cashier behind two or three customer’s shoulders because they’re all packed in front of you waiting for their food.

With a simple labor division and reorganization, they could easily solve this problem. The cashier should stay at the cash register, her job is to take the orders and payments, not to prepare the food. Then, there should be a worker for the drinks prepartion and distribution and a worker for the food distribution. Since they never ever open all the cash registers, they should remove two out of five cash registers to allow more space to toss aside the customers who are waiting for their food, this would leave more space for new customers to order and would provide for more orderly waiting lines.

The cashier would be a lot less stressed out and more efficient if she would only need to take the orders and not also prepare orders, this means should could process more sales in the same amount of time. The time the cashier takes to try and partly prepare an order is time she is not processing sales, this costs a lot to the company. If the restaurant owner thinks he is saving money on wages by forcing the cashier into multitasking, he is wrong. The $9/H he is saving by forcing the cashier into multitasking is costing him about $200/H in sales not processed because customers had to wait, very bad accounting. Multitasking does not work because everybody is doing anything in no particular order and there is a big waste of time.

I could easily reorganize this restaurant so that sales would be processed rapidly, orders would be processed and completed rapidly and customers would wait very little and in an orderly fashion.

I was impressed to see automation in the restaurant though, there is a drinks preparing machine that prepares the sodas as the orders are being entered in the system. But that’s reserved for the drive-through order, no wonder it’s faster to get your order when you drive by car than when you get inside. The entire drive-through process is automated and fully subdivided and people in their cars have no choice but to wait in an orderly fashion and nobody is overlapping on nobody and orders are processed as a first come first serve basis.

I am certain that the drive through, which is attended to by only five employees generates as much sales as the inefficient in-store process which is attended by 12 employees.

If McDonald’s could figure out how to make it’s in-store process as orderly as it’s drive-through process, it could easily double or triple it’s profitability. What’s costing this particular restaurant the most is the waiting time, the more you keep your customers waiting, the less sales you can process during that time and the less profitable your whole operation is.

augusto June 2, 2011 at 1:29 pm

I’d be willing to bet McDonalds has already tried the system you suggest, with worse results…

Inspector Ketchup June 2, 2011 at 4:37 pm

You are right, it is already using the system I am suggesting … for it’s drive-through part and it works wonders. It only needs to do in-store what it does for the drive-through and things will process a lot faster.

Anyways, I’ve learned to be patient and to take the whole issue with a grain of humor. I understand the stress the cashiers go through and therefore I don’t rough them out if my order takes time or is botched up, it’s not their fault that the restaurant manager is doing a poor job.

Also, as I get away from the crowd to wait for my food, sometimes I see that my order has been prepared in due time by the employees of the kitchen, so it’s absolutely not the production part that is the problem. Those who cook and prepare the food are doing a very good job at preparing the food as the orders come in.

It’s the distribution part which is faulty, prepared food is being piled up at the distribution plate while customers are piling up in the corner with their empty trays. You get finished and ready food piled up and angry waiting customers with empty trays piled up.

Just for fun, I said nothing and waited how long it would take them to figure out my order was ready and to put it on my plate.

The stranglehold is really because management is insisting that cashiers should both take orders and distribute the finished food.

The libertarian way of thinking would add an extra layer of division of labor where one would be affected at distributing the food while another would be affected at taking the orders.

That way, the orders would be distributed as they are prepared to the waiting customers and the process would work a lot faster.

I guess the reason they do this is because of the sporadic and unpredictable nature of customers affluence. I spend so much time at McDonald’s that I notice that customer attendance is happening in an unpredictable and chaotic manner. You can have long periods of quiet and short unpredictable bursts of customer rush. Of course, you can always predict there will be a lot of customers during rush hours like noon and 5PM and in the morning for breakfast.

So during predictable rush hours, they should switch to a division of labor type of orders taking and distribution and during quiet times, they can switch back to cashier multitasking where it’s okay to take the order and distribute the food since there is not much business during that time. But even during normally quiet periods, there can come a flock of teenagers or a club of elderly and this generates a lot of activity.

So the real problem that I observed is that during rush periods, there must be a division of labor where there are employees strictly affected to taking orders and others strictly affected to distributing the prepared food to the waiting customers.

It’s as if management has decided that cashiers will multitask no matter what happens, quiet or rush. This is what creates the problem.

For some strange reason, the drive-through activity seems to be a constant flow all day long, quiet or rush, it doesn’t matter so maybe that’s why it’s easier to automate and make efficient.

Mel mcilroy August 26, 2011 at 6:57 pm

What the he’ll would you know you hypocrite. I work at a macca’s that trades 24/7 365 in newcastle Australia. We chained our front counter to a 4 register counter similar to drive thru and it works very well over the 12 noon to 2pm lockdown period.

So unless you work at a restaurant you have no idea what’s going on. So keep your opinions to yourself or go to Mcdonald’s in Newcastle and see what it’s like.

J. Murray June 2, 2011 at 1:46 pm

What you’re seeing is potentially an issue with minimum wage laws. It’s common that older fast food restaurants designed with four or five registers to leave only one or two open at a time. When the register worker is costing you $7.25/hour, it becomes harder to justify opening up more since the rush period usually only lasts a half-hour or so. Bringing in five people to work the registers when most of the day they’ll be idle at that price isn’t good business sense. No one is going to show up for a job that’s only going to pay for 30 minutes of effort, nor will companies engage in the expense of hiring those individuals just for a 30 minute shift, so the registers stay empty while the rush is on. One may be dedicated to just the drive through while the other handles walk-ins. The drive-through needs a dedicated person despite being a lower volume point of purchase (it takes longer to funnel cars through a line than people indoors in most locations). This also explains why some stores are starting to see touch-screen ordering and credit card swipes, no cashier necessary.

The cross-job functionality is also that minimum wage bleeding effect. This is why we no longer see a dedicated bagger or fry cook. The cashier now handles the fry station and bagging, one person handling the grill, and two assembling the product. The assembly line process of days past is dead because it’s just become too expensive to have someone whose sole job is putting food in a bag or dipping fries into hot grease.

Inspector Ketchup June 2, 2011 at 4:47 pm

Very good analysis and explanations.

But they could make the process a bit more efficient if during rush, the cashier would only take the orders and the service employees would distribute and bag the orders.

The problem is that during rush, everybody does just about anything, there is no coordination and it is done in no particular order so it generates situations where there is a lot of food piled up at the distribution plate and a lot of waiting and complaining customers piled up in a corner with their empty trays.

Plus, this situation generates loss of revenues for the restaurant because the more you keep your customers waiting the less sales you generate because the less orders are being cleared before reaching to a new customer. This reduces the amount of customers and orders that can be processed during an amount of time.

But still, great food, great prices and I’ve learned to avoid rush periods.

My favorite food at McDonald’s is pancakes with syrup in the morning with a nice coffee. I do this almost every morning. Right after the rush hour.

Grant June 2, 2011 at 1:09 pm

Funny you mention Taco Bell. Their “beef” isn’t really beef at all. It’s about 20% meat and 80% filler. Talk about false advertisement and fraud!

Fritz June 2, 2011 at 1:48 pm

Pretty close, I think the numbers are 35 or 36%. But it does illustrate a much more important point aside from this praising of poison dealers. All you have to do is lobby the FDA/USDA/EPA/??? for a new definition or acceptable limit, and just like that you’re no longer serving rat killer and you’re off the hook. The actual required number to call it ‘beef’? 40%, and they couldn’t even get that high. Oh, but that’s not Taco Bell’s fault. They’re just playing the game. BS. Every restaurant operates the same way, and with much less waste, despite fewer immunities and they serve food. Why is fast “food” the pinnacle of free enterprise? Sorry, it’s hard enough defending sound economics to the knuckleheads pulling the “Corporations would kill us all” routine without praising the current crop of gangsters actually doing just that.

Inquisitor June 2, 2011 at 2:51 pm

I suppose Tucker does tend to speak before he thinks at times, however interesting his contributions tend to be.

Concerned Friend June 2, 2011 at 3:37 pm

My friends and I have this theory: We are all avid taco bell fans, yet we have noticed a discernable difference in quality from our high school days up to the present (admittedly only a few years), and we came up with the idea that they have been slowly replacing “real” beef with more filler…why? we asked ourselves, and we speculated that it was a clever way to hide the effects of inflation. What do you guys think?

Marissa June 2, 2011 at 6:16 pm

It could also be a sign of beef getting more expensive due to regulations on the cattle industry. Some states have mandatory animal ID programs and the USDA was trying to make it national. The worst part about these programs is that larger cattle producers (think factory farms) would be allowed to tag by the herd while smaller producers would be forced to tag by the head.

Walt D. June 2, 2011 at 7:50 pm

Marissa:
The beef is getting more expensive because the price of the corn to feed the cattle has gone through the roof. This is because corn is now being used to make ethanol gasoline additives. This would normally be uneconomic. However, the Federal Government subsidizes ethanol production.

Marissa June 2, 2011 at 8:20 pm

I didn’t even think of that–great reminder of the many ways government distorts markets in a very destructive fashion. The federal government also owns nearly 30% of U.S. land: http://www.nationalatlas.gov/printable/fedlands.html. It owns more than half the land in five states (84.5% in Nevada and 69.1% in Alaska!). This artificial shortage of land doesn’t help the price of pastured cattle either.

Inspector Ketchup June 3, 2011 at 12:06 pm

Isn’t it silly to feed to cattle only to feed off the cattle afterwards ?

Wouldn’t it be more efficient in an economic sense to simply feed ourselves directly with the corn ? I wonder what Corn Burgers would taste like. There is a chef that invented taste sprays to spray different tastes on different foods so a banana could taste like a hot dog.

I bet there is a way to make corn burgers taste like ham burgers and to give the corn the same consistence as meat. And to do so more efficiently than with real meat.

Plus, it would reduce animal suffering.

Marissa June 3, 2011 at 1:42 pm

Corn is a grain and unfit for human consumption. Even if you could get it to taste like meat it would have none of the healthy saturated fats and nutrients that meat naturally provides.

Many small farmers reduce animal suffering by feeding their animals the appropriate foods and allowing them to graze in the pasture. As for “economic sense”, if it benefits the farmer more to buy feed (or a large plot of land to pasture their livestock) because he will make a bigger profit selling the meat, then he has found a more efficient way to make a living.

Inspector Ketchup June 4, 2011 at 11:20 am

I eat corn in beef, soup, as pop corn, in tortilla chips, directly with butter and salt.

It’s tasty and you have sweet corn which is even tastier.

What are you talking about, corn is absolutely fit for human consumption and it would make more economic sense to consume it directly instead of feeding it to bovines only to eat their meat.

Marissa June 6, 2011 at 4:05 pm

Unfit for human consumption does not mean inedible. Corn has the worst nutritional profile of all the grains and replacing foods which have great nutritional profiles (meats) with corn is a death wish. Or a diabetes/obesity wish, at least. It definitely doesn’t make economic sense to eat it, especially when you factor in medical costs associated with grain consumption.

Most importantly, it shouldn’t be fed to bovines either as it is not fit for consumption by them either.

Walt D. June 3, 2011 at 1:59 pm

Soylent Green is the answer – the ultimate (inevitable) socialist solution.

Jeffrey Tucker June 2, 2011 at 5:07 pm

oh for goodness sake. Taco Bell’s beef content is available for anyone to see. It has water plus oats plus soy and plus it is REALLY REALLY DELICIOUS!!! It’s also one reason they can keep prices down. if you don’t like it, don’t go there.

Fritz June 2, 2011 at 5:21 pm

Is that a concession, then?

Grant June 2, 2011 at 7:09 pm

It’s available for anyone to see who buys the “beef” and has it analyzed. False advertisement is fraud. Period.

This is how anarcho-capitalists, such as myself, resolve issues of fraud: the courts; “Law firm Beasley Allen, based in Montgomery, Ala., said that it withdrew the lawsuit after Taco Bell made changes to its marketing and product disclosure.In response to the lawsuit, Taco Bell took out full-page ads in at least nine major newspapers, aired television spots and launched a YouTube campaign to proclaim its taco filling is 88 percent beef.”

As a former customer of Taco Bell, I actually thought I was eating beef. No where could there be found a list of ingredients. I was duped into believing the product I purchased was indeed beef when it was a mixture of beef (which was as mentioned above, tested at less than 40% beef) and fillers.

And also to echo Fritz on fast food in general. It’s hardly a free market enterprise as it lobbies the government for special treatment.

Here’s one example (taken from “Government’s End: Why Washington Stopped Working” by Jonathan Rauch) of many instances of corporatism in the fast food industry:

“Through the Poultry and Egg Council, McDonald’s got $465,000 from the taxpayers in fiscal year 1991 to promote Chicken McNuggets.”

Fast food is predicated on subsidies; those 99-cent tacos would cost more without them. Whatever beef is in there is fed subsidized corn or grazed on subsidized federal land. The shell IS subsidized corn. There’s probably some milk product in the cheese, and the dairy industry received a $1.1 BILLION in subsidies last year. (Plus milk is marketed free of charge to 50 million public school students each year in 100,000 state compulsory schools. That’s the marketing power of force!)

Face it: fast food in its present state would not dominate if it had to compete in a truly free market. Cheap fast food is predicated on government subsidies and government intervention.

Anthony June 2, 2011 at 9:24 pm

And of course sit down restaurants don’t use subsidized beef, or corn, or milk, or cheese… that is why fast food is so evil!

Face it: you use subsidized products every day of your life, as does everyone else. You have no choice in the matter.

The use of subsidized products is not sufficient to condemn an organization. If they actually committed fraud regarding the content of their tacos then by all means they should be forced to compensate their customers… nobody here disagrees with that.

Maybe in a true free market there would be less fast food, maybe more. It is impossible to say in advance so I am not sure what all the fuss is about.

Fritz June 3, 2011 at 12:12 am

Quite simply, you pay more than I make in a lifetime this year to starve the competition using government coercion, you suck. Why is it so hard to comprehend?

nate-m June 4, 2011 at 6:40 pm

Don’t hate the player, hate the game.

Try to live your life by avoiding industries not tainted by government coercion and you’ll spend the rest of your life dressing in leaves and eating pine cones.

Fritz June 4, 2011 at 8:29 pm

That’s not true. Not even close.Aside from the strawman, which I don’t feel the need to again correct, I never eat fast food, take pharmaceuticals or use toxic byproduct on my body. It’s actually real simple and I save money by avoiding these things, in the long and short runs. It has nothing to do with government involvement, but just basic ethics and standards. I don’t sing praise to those opposed to my ideals, and instead choose to patronize those that do as much as possible. It’s the people defending TB et all are the ones being intolerant and making up fantasies about seclusion and such. I interact with my community and frequent more businesses with better people and enjoy better nutrition and directly help people I like. I guess I’m Satan?

nate-m June 4, 2011 at 9:56 pm

That’s not true. Not even close.Aside from the strawman, which I don’t feel the need to again correct,

It’s not a strawman to simply state the truth.And if this is your ‘correction’:

Quite simply, you pay more than I make in a lifetime this year to starve the competition using government coercion, you suck.

It’s not only wrong (since it is a misrepresentation of the situation), but borderline nonsensical.

or use toxic byproduct on my body.

Which just means that you don’t understand the makeup of the food you do consume. Simply heating food creates chemical changes, some of which is potentially toxic.

I interact with my community and frequent more businesses with better people and enjoy better nutrition and directly help people I like. I guess I’m Satan?

Nothing you said makes you a bad person. But pointing out fallacies online is not evil either.

Fritz June 5, 2011 at 1:58 am

You’re reaching, and not doing a very good job. Misrepresentation would be a conservative description.

Grant June 2, 2011 at 10:02 pm

The tone of the post is one that holds the fast food industry as a beacon of “capitalist risk taking” when it lobbies the government for special treatment and receives DIRECT subsidies. It is not to be championed no matter what may or may not exist in a truly free market. Judging fast food (and its owners, including Coke and Pepsi) on the merits alone, the industry fails because of its cozy relationship with government:

“The American Beverage Association’s lobbying efforts have recently skyrocketed, largely to finance the industry’s opposition to legislators’ considering increased taxes on soft drinks given their impact on Americans’ health when consumed in excess.” Interesting that the government wants to tax soda because of the “epidemic” it caused by subsidizing soda consumption by allowing it to be purchased with food stamps.

The whole system is entangled and is not free. We get mad when people blame laissez faire for causing problems; our number one defense is that there is no laissez faire, that it’s the government that’s to blame because it killed the free market. If the free market is dead, and what we’re left with is corporatism, let’s not celebrate that, especially when fast food and beverage companies collude with the government to obtain their success.

Inspector Ketchup June 3, 2011 at 12:42 pm

Physicists say that lightning and electricity takes the path of least resistance. They say that everything in the universe is ruled by the laws of conservation of energy and everything has a price, freedom like tyrany.

Could it therefore be that the current world in which we live is the most efficient one that could ever be at the present moment, even with it’s government tyranny, wars, diseases, natural catastrophes, tragic human mistakes etc. ?

This whole idea is shaking my own preconceptions about efficiency and freedom. It’s as if I lost all my guidelines and orientations.

I was raised as a christian and I studied science and technology. I earlier thought there was right and wrong, holiness and sin, crime and justice and that all was inscribed inside the efficient and inexorable laws of thermodynamics and conservation.

Yet, as I progressed through time, all I see around me is chaos, inefficiencies, stupidity, nonsense etc. I can’t make sense of it all nor put all the pieces together.

Therefore, to say that in a libertarian world, things would be different, more efficient and more abundant etc.

Given that we live in the universe which is a “logical” machine ruled by unbendable “laws” of physics, could it be that the current state of things is the most efficient one at the moment ?

Instead of always keep things in balance and in the most efficient arrangement, nature, the universe and mankind always seem to skew things where there is a concentration of wealth, knowledge, sense, meaning and efficiency somewhere and poverty, crap, nonsense, stupidity, inefficiencies everywhere else.

If there is one thing that this universe seems to hate it’s for things to be even, it seems to crave variations up to the point where it becomes nonsense. Therefore I fail to see how a libertarian society would be more even, more abundant, freer than things are now because there will always be this law of variations, fluctuations and uncertainty.

Could it be that the present is the most efficient and logic and meaningful one that could ever be ? If that so then I don’t know what to think or say because it looks like complete nonsense and chaos to me.

Walt D. June 3, 2011 at 10:19 pm
Inspector Ketchup June 4, 2011 at 11:21 am

I don’t want a job, I want money. 8)

Matt K. June 4, 2011 at 5:04 pm

Joel Salatin and his food /agriculture based business, would be a far better example of libertarian /free market principles put into action. http://www.polyfacefarms.com/

Vanmind June 6, 2011 at 12:01 pm

Hardly a story of genius. If it’s “the most fundamental of all material impulses” then not being able to bring loads of people into your store is a sign of serious incompetence.

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