Thursday, July 22, 2004

innovation at mcdick's

marginal revolution points to a nyt's piece about one mcdonald's franchiser's experience with outsourcing order taking:

PULL off Interstate 55 near Cape Girardeau, Mo., and into the drive-through lane of a McDonald's next to the highway and you'll get fast, friendly service, even though the person taking your order is not in the restaurant - or even in Missouri.

The order taker is in a call center in Colorado Springs, more than 900 miles away, connected to the customer and to the workers preparing the food by high-speed data lines. Even some restaurant jobs, it seems, are not immune to outsourcing.

The man who owns the Cape Girardeau restaurant, Shannon Y. Davis, has linked it and 3 other of his 12 McDonald's franchises to the Colorado call center, which is run by another McDonald's franchisee, Steven T. Bigari. And he did it for the same reasons that other business owners have embraced call centers: lower costs, greater speed and fewer mistakes.
In the fast-food business, time is truly money: shaving even five seconds off the processing time of an order is significant. Mr. Bigari said he had cut order time in his dual-lane drive-throughs by slightly more than 30 seconds, to about 1 minute, 5 seconds, on average. That's less than half the average of 2 minutes, 36 seconds, for all McDonald's, and among the fastest of any franchise in the country, according to, which tracks such things. His drive-throughs now handle 260 cars an hour, Mr. Bigari said, 30 more than they did before he started the call center.
Though his operators earn, on average, 40 cents an hour more than his line employees, he has cut his overall labor costs by a percentage point, even as drive-through sales have increased. He said the call center saved enough in six months to cover the cost of setting it up, in part because he no longer had to employ as many people on the overnight shift.
Tests conducted by outside companies found that his drive-throughs now make mistakes on fewer than 2 percent of all orders, down from about 4 percent before he started using the call centers...
Mr. Bigari is so enthusiastic about the call-center idea that he has expanded it beyond the drive-through window at his seven restaurants that use the system. While he still offers counter service at those restaurants, most customers now order through the call center, using phones with credit card readers on tables in the seating area. Play areas at the restaurants have them, too, so a parent can place an order over the phone, pay with a credit card and have the food delivered.

marginal revolution goes on to call this "an interesting illustration of why a decentralized, capitalist system furthers innovation." while i have nothing against decentralization or capitalism, i don't see how a franchise-based restaurant group (internally sharing many aspects of a command-driven economy) can be truly considered decentralized, nor do i see how this would be impossible under a socialist construct. indeed, much of our nation's most innovative work is being done by the scientific community in a socialist manner, e.g., taxpayer money goes to nih, nih gives money to researchers, researchers produce innovations, innovations are used to further scientific research.

of course, patents have kind of corrupted this system, but it remains socialist in all the important aspects. for an interesting take on the distribution of risk and concentration of wealth going on in our scientific communities, take a look at this lecture by chomsky.


At 9:33 PM, Anonymous Anonymous said...

most medication research is advanced through privatized industry sluts.

At 10:10 PM, Blogger Jesus Henry Christos said...

who said anything about medication? i was talking about basic science research you cunt.

but you are right, the majority (60%) of pharmaceutical r&d money is private. also, see the work done by dean baker on pharm protectionism.

At 3:54 PM, Anonymous Anonymous said...

being an oblivious slave of a corporation disguised in sheeps clothing, i merely assumed that the only basic science relevant to life was pharmaceuticals. mea culpa. perhaps i should blow my brains out as the outcome is long overdue.

fuck it, i'll just go jerk off and be depressed instead.

At 6:29 PM, Blogger Jesus Henry Christos said...

dearest anonymous,

you make some valid points, and i quite enjoy your charming nihilism. perhaps you would care to meet me at mexico city in amsterdam for more lies and storytelling.

best regards,


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