Case Study:
Statistical Data Collection @ McDonald’s Think of any well-known, successful business in your community. What do you think has been its secret? Competitive products or services? Talented managers with vision? Dedicated employees with great skills? There’s no question these all play an important part in its success. But there’s more, lots more. It’s “data.” That’s right, data. The data collected by a business in the course of running its daily operations form the foundation of every decision made. Those data are analyzed using a variety of statistical techniques to provide decision makers with a succinct and clear picture of the company’s activities. The resulting statistical information then plays a key role in decision making, whether those decisions are made by an accountant, marketing manager, or operations specialist. To better understand just what types of business statistics organizations employ, let’s take a look at one of the world’s most well-respected companies: McDonald’s. McDonald’s operates more than 30,000 restaurants in more than 118 countries around the world. Total annual revenues recently surpassed the $20 billion mark. Wade Thomas, vice president of U.S. Menu Management for McDonalds, helps drive those sales but couldn’t do it without statistics. “When you’re as large as we are, we can’t run the business on simple gut instinct. We rely heavily on all kinds of statistical data to help us determine whether our products are meeting customer expectations, when products need to be updated, and much more,” says Wade. “The cost of making an educated guess is simply too great a risk.” McDonald’s restaurant owner/operators and managers also know the competitiveness of their individual restaurants depends on the data they collect and the statistical techniques used to analyze the data into meaningful information. Each restaurant has a sophisticated cash register system that collects data such as individual customer orders, service times, and methods of payment, to name a few. Periodically, each U.S.–based restaurant undergoes a restaurant operations improvement process, or ROIP, study. A special team of reviewers monitors restaurant activity over a period of several days, collecting data about everything from front-counter service and kitchen efficiency to drive-thru service times. The data are analyzed by McDonald’s U.S. Consumer and Business Insights group at McDonald’s headquarters near Chicago to help the restaurant owner/operator and managers better understand what they’re doing well and where they have opportunities to grow. Steve Levigne, vice president of Consumer and Business Insights, manages the team that supports the company’s decision-making efforts. Both qualitative and quantitative data are collected and analyzed all the way down to the individual store level. “Depending on the audience, the results may be rolled up to an aggregate picture of operations,” says Steve. Software packages such as Microsoft Excel, SAS, and SPSS do most of the number crunching and are useful for preparing the graphical representations of the information so decision makers can quickly see the results. Not all companies have an entire department staffed with specialists in statistical analysis, however. That’s where you come in. The more you know about the procedures for collecting and analyzing data, and how to use them, the better decision maker you’ll be, regardless of your career aspirations. So it would seem there’s a strong relationship here—knowledge of statistics and your success.
Q1. You will recall that McDonald’s vice president of U.S. Menu Management, Wade Thomas, indicated that McDonald’s relied heavily on statistical data to determine, in part, if its products were meeting customer expectations. The narrative indicated that two important sources of data were the sophisticated register system and the restaurant operations improvement process, ROIP. Describe the types of data that could be generated by these two methods and discuss how these data could be used to determine if McDonald’s products were meeting customer expectations.
Q2. One of McDonald’s uses of statistical data is to determine when products need to be updated. Discuss the kinds of data McDonald’s would require to make this determination. Also provide how these types of data would be used to determine when a product needed to be updated.
Q3. This video case presents the types of data collected and used by McDonald’s in the course of running its daily operations. For a moment, imagine that McDonald’s did not collect these data. Attempt to describe how it might make a decision concerning, for instance, how much its annual advertising budget would be.
Q4. Visit a McDonald’s in your area. While there, take note of the different types of data that could be collected using observation only. For each variable you identify, determine the level of data measurement. Select three different variables from your list and outline the specific steps you would use to collect the data. Discuss how each of the variables could be used to help McDonald’s manage the restaurant.
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.