The Chipotle Food Chain

Business processes take many forms. One common type of process is a supply chain that links suppliers to manufacturers and distributors. In the case of most restaurants, the supply chain runs from ranches and farms via central processing kitchens to restaurants where food items are combined and cooked. As with any major process problem, when something goes wrong, one starts with the problem and works one’s way back through the steps in the process until one finds the source of the problem.

In October of 2015 a popular US fast-food chain, Chipotle, experienced a rash of customer illnesses apparently linked to eating food from one of several restaurants that make up the chain. The illnesses, ultimately determined to have resulted from the bacteria, E.coli, and from Norovirus and were serious. Several individuals were hospitalized and in the worst cases, individuals took up to 6 weeks to recover. Incidences of food poisoning occurred in Oregon, Washington, California, Kansas, Oklahoma, North Dakota, and Massachusetts – eventually resulting in some 500 people becoming sick – suggesting that the problems wasn’t associated with a local store but with the entire food chain.

Chipotle is a Mexican fast-food chain that began in Denver in 1993. The owner, who initially studied art, and then trained as a chef at the Culinary Institute of America, wanted to create a new kind of fast food chain that would emphasize fresh ingredients cooked in front of customers. The chain grew from 489 restaurants in 2006 to 1,800 restaurants, today, with an income, in 2014, of $4.1 billion dollars.

A typical Chipotle restaurant uses 64 ingredients that come from 100 suppliers. Given the restaurant’s emphasis on organic, locally grown food, many of the suppliers are local growers that establish contracts with local restaurants. Most of the food, however, in spite of Chipotle marketing emphasis on “locally grown,” come from a series of processing kitchens that prepare specific ingredients and then ship them to the various Chipotle restaurants. Compared with a typical fast food chain, however, Chipotle was using a lot more local items.

People who think “organic” and “local” are important like what they used to hear about Chipotle. In point of fact, however, local and organic often translated into less standardization and less control than conventional fast food restaurants have. One man’s organic, apparently is sometimes another man’s unsanitary. More to the point, organic and local producers are less likely to divide output into lots and keep good records. Thus, while McDonald’s can quickly determine exactly where lettuce used at a particular restaurant on a specific day came from, Chipotle has had a lot of trouble pinning down the source of the contamination that has obviously gotten into their supply chain.

All this is not to complain about organic food, or about taking care in preparing fresh food – but personal handling costs money. When you go to an small restaurant where the chef personally goes to the market and selects the best produce, you should expect to pay a higher price for this type of service. The question is whether you can get that type of service at a fast food restaurant where you pay a comparatively modest amount.

At the moment Chipotle has shifted gears. They are no longer putting the spotlight on their fresh ingredients and local sourcing, but, instead, on their “comprehensive food safety plan.” (https://www.chipotle.com)

Given the size of the Chipotle operation, I assume, that in time, they will be able to manage their suppliers better and get both fresh, local produce that meet the highest food safety standards.   Meantime they are moving significantly closer to McDonalds, and using more central kitchens that have well established safety records and can tell you just where each head of lettuce comes from.

For those of us involved in process work, all this illustrates several dilemmas faced by any business process designer. You can’t maximize more than one thing at a time. Most real processes try to balance several concerns and getting the balance right is the key. Accountability is another key: You need to be able to trace problems to their roots, quickly. That means batches and numbers and all the rest of what many people think of as “paperwork.” Don’t let the Lean advocates push you too far. Just because customers might not want to pay for it doesn’t mean you don’t sometimes need it. When the CDC arrives and wants to know exactly where the lettuce you served last Monday came from, you’d better be able to tell them.

The whole Chipotle story is a kind of tragedy. An innovative company was pioneering offering a new and in some ways improved service to customers who flocked to get their product.   The company may survive, but its certainly going to go through a rough patch. What works for a small restaurant doesn’t necessarily scale up for a chain of almost 2000 restaurants. The standards demanded of their processes are different, for important reasons, and any manager forgets or ignores that at his or her peril.

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