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October 4, 2020

Another LTO Cut Short

Given the shelf life of unfrozen beef it's easy to excuse running out of quarter meat 
but nuggets  are a different story. Prematurely running out of product is not a sign of 
a good promotion. It's a management problem.

McDonald's is running out of its Spicy Chicken McNuggets | Restaurant Dive
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5 comments:

Anonymous said...

I totally agree. We have had numerous instances of under stocking or over stocking the past few years, yet no one in Chicago ever seems to lose their job. If one of my managers constantly had as many blunders as MCD, I would fire them!

Anonymous said...

Because we are extremely remote, the closest McDonald's restaurant is 90 miles away we kept what many would consider extremely high stock levels of critical products- fries, 10:1, 4:1, nuggets, etc. but the new process makes this impossible.

While the intent is certainly good- I would rather have my money in the bank than in my freezer etc. I'd MUCH rather rarely or never run out of critical products.

I have no idea how this stuff is managed and I know that our O/O leadership in supply chain has been some of the best O/O's I know, operationally excellent, exceptionally intelligent and knowledgeable advocates for us. I have no doubt that they see what we see and I can say with certainty that the two who I know best who serve in these roles have zero patience for these blunders- hindsight and Monday morning quarterbacking is of course easy but continued large-scale shortages have simply got to be fixed.

I was on purchasing for a time and it's a huge machine, I don't know who is figuring this stuff and while they probably get it right much more often than they get it wrong I have every reason to believe that this is being addressed and will be fixed to the degree possible right now.

It's a delicate balance but as Richard alluded we've got to do a better job of leaving room for adjustments as LTO's roll out according to popularity.

I once built a new restaurant that was projected at $2m for the first year. Three days in after opening I had our year 1 sales projected at 25% below what McDonald's told me so I immediately met with the regional finance boss about a month later- he was floored that I was able to project out that far with that little data and when I was done he too was convinced that we would significantly underperform and he made immediate and retroactive rent adjustments. My projection was within $10k of being right when we finished out our first 12 months.

It can be done, one only needs to have a little bit of experience, a grasp of statistics and this stuff can be modeled out with pretty good accuracy. I'll bet that it can be done here too, we need to be able to make real-time adjustments with a much wider margin up or down once these things roll out so we don't run out and we don't get stuck with the bill at the end when it underperforms too.

It's frustrating and embarrassing and the ones who are responsible only talk about it in online meetings or emails- they never have to stand in front of the customer who came in looking for whatever they saw on TV and have to explain that we are out. They should have to do this- they should be responsible enough to go out in the stores and physically work a register, deal with this themselves so they better understand what the effect of these things are on our customers, our employees and our business.

I'm really tired of McDonald's employees talking about what we do and using the term "business" in a detached and clinical way and the reason they do this is every year less of them have ever worked in a store. If we are going to grow we've got to have people in leadership positions that have DONE THE JOB. There is no way that they can personally relate by looking at spreadsheets and trends and numbers, dressing up in their executive suits and making decisions as they look at it from afar. It's why we don't have styrofoam cups anymore, it's why they support causes and ideas that are NOT important to our customers, it's why they continue to pander to groups who are not and never will be our customers. They live in a detached bubble, don't talk to our regular customers and cannot relate in any way to and have run off so many of our traditional and loyal customers.

There's a reason Ray and Fred and others were great leaders is because they were close to, understood and loved our customers. Most of this bunch does not.

Anonymous said...

^comment above. Amen. Well said.

One comment on your restaurant that was under projected. Fortunately, you had a generous finance director or Vp. Some would have said, like they did to me, let's see how this plays out. And once it played out exactly as you mentioned above -- the "norm" report gets thrown around.... they say "well, you could be making more money if you were more in line with the norm report" work on that first..... When in truth, there is no norm for a low volume freestanding restaurant. and the norm report cherry picks specific line items on the P&L. realistically, "while it's the norm report" there's very few people generating an entire P&L that resembles that report.

All that said, I enjoyed the comments above.

Richard Adams said...

There were still spicy McNuggets TV ads running on Sunday night. I was streaming Fox News so I'm sure it was OPNAD.
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Anonymous said...

I love the message we got from some corporate fool when 4:1 meat ran out. "Just inform customers you are out of 4:1 meat and offer them another product besides the Travis Scott meal. Uhm...most customers do not know if I told them we are out 4:1 meat what that means, and being out of 4:1 doesn't mean we are out of one product Travis Scott meal that is numerous menu items we are out of. How can they be so clueless....oh I remember they have never worked in a restaurant.

Spicy Nuggets and boxes controlled allocation within the first couple of days? Really how possibly can logistically we be out of boxes doesn't HAVI and McDonald's manufacture enough for the entire projected promotion? I can see running out at the end of the promotion maybe a week early; like the other poster said frozen nuggets run out within the first few days and the folks at HQ are patting themselves on the back what an overwhelmingly successful promotion.

There is just know accountability on the McD's end.