The big idea: Pal’s Sudden Service was a Tennessee-based, burgers-and-fries, drive-thru-only fast-food chain, founded in 1956 and currently with 26 locations. The operation was focused with laser-like intensity on one thing — the customer. The restaurants, down to the tiniest detail, were built around providing consistent, quick service food. And provide they did: Cars and trucks pulled away from Pal’s during peak flow, bag in hand, every 14 seconds.
Pal’s financial returns were many times the industry fast-food average. Notably, Pal’s operating income was 16.3 percent of sales while the average was only 3.1 percent; Pal’s inventory turned over 143 times a year — a testament to the freshness of its ingredients — while the average was 27. But what was their secret sauce for productivity?
The scenario: Founder Pal Barger and CEO Thom Crosby were obsessed with using Lean techniques to eliminate waste, reduce human error and simplify processes. They kept the menu simple. Simplifying the offerings, for instance, limited the raw materials, suppliers and training modules required to support them.
A customer pulled up to the window. A “real person” took the order and then translated it directly to the crew. Electronics were not used, to eliminate mistakes. Money was collected when the food was delivered, again to speed up the process. Coins for change were made ready before payment was received, and payment in coins was assumed to be correct, to be counted later in the day. Time was not wasted by the customer checking the accuracy of their order — the order was almost always correct, and the customers knew this.
Inside the restaurants, the production area was designed efficiently. All condiment containers were stored upside down to ease dispensing. All component pieces that went in a sandwich had the shortest possible hand movement. People did not bump into one another.
While many processes were streamlined to the highest degree possible, certain things were never automated. For example, comments entered online were routed directly to Crosby — and Barger often answered the phones at the main office. Personal contact with customers and suppliers was essential.
The resolution: By streamlining almost every activity required to deliver a perfect Pal’s order, from supplier sourcing and inventory management to taking orders and building sandwiches, waste was eliminated and value created.
The lesson: Beginning with the customer in mind, and then using Lean techniques to streamline operations is a great design principle.
Goldberg is a management consultant at Goldberg Strategic, and Weiss is a business professor at the University of Virginia Darden School of Business. They are the authors of “The Lean Anthology.”