Operational Differences: McDonald's Vs. Burger King

1. What are the operational differences between the burger process at Burger King and McDonalds?

Be specific. What are the implications?

The manufacturing strategy that these companies have is different. McDonald's has a Make to Stock strategy products are made and put into inventory before an order is receive from the customer. Sale and delivery of goods are made from finish goods inventory "The Bin".

Burger King "Have it your way" suggest that they have an Assemble to Order strategy where several product options exist. Burger King produces and stock standard components "the steam table", when they receive an order they assemble the burger according to the order.

Delivery Lead Time on a Make to Stock environment is shorter because is equal to the amount of time it takes to deliver the order with very little to no customer involvement in the product assembly. On an Assemble to Order environment delivery lead time equals the assemble time plus the delivery time, there is customer involvement but is limited to selecting the component needed. Please see Exhibit 1 Delivery lead time on a Make to Stock and an Assemble to Order environments.

Burger King stocks inventory during the assembly as a semi finished good on the "steam table" which is less costly if discarded because the total value of the product is not added already. McDonald's if product is discarded you are discarding from "The Bin" which is a finish good inventory so the total value is already added to the product Labor plus Material. This could be a reason why McDonald's cost of food is 1.9% higher than Burger Kings.

The other major difference is the operation to make burgers, McDonalds's cook the hamburgers on grills batching 12 patties per grill with human intervention to turn, sear, and pull. This batching process favors the make to stock environment. Burger King has a machine called the Continuous Chain Broiler with a capacity of 8 burgers per chain with no human intervention where patties are placed at one end and after 80 seconds they

come out the other end one by one.

The customization of Burger King's product is centered on the dressing of the burger. Burger King by not having a portion control of the condiments can affect the quality and they can take a hit on waste. McDonald's on the other hand has an advantage with automatic dispensers that control the dispensed portion. By having this system they control quality & supply.

At McDonald's, paying occurs when the food is ordered and delivered, at Burger King, the order must be prepared before it can be delivered to the customer, with payment in between. Orders must be assembled, instead of simply being filled. At the counter Burger King's employees use microphones