Bans on Drive-Thrus Continue

Bans on Drive-Thrus Continue

October 27, 2019

Some cities in the US and Canada have banned new drive-thru restaurants in an effort to combat societal and health issues such as curb pollution, obesity, and traffic.

One Canadian study of bans in 27 cities showed improved health results but a similar study in southern Los Angeles found increased obesity rates after the ban was implemented.

For additional information, see our previous OM in the News post on the ban Minneapolis placed on new drive-thrus.


Video Spotlight: Why Some US Cities Are Banning Drive-Thrus | TODAY


This post is based on the CBS News article, Cities ban new drive-thrus to fight climate change, by Kate Gibson, October 14, 2019, and the YouTube video, Why Some US Cities Are Banning Drive-Thrus | TODAY, by Today, October 11, 2019. Image source: Glow Images

Discussion Questions:

1. What can fast-food restaurants do to work around this new limitation to their core service process?

Guidance: Students will likely struggle to envision a new set of processes to replace the traditional drive-thru process.  Suggestions to stimulate idea generation: Consider the use of technology to order ahead and allow delivery by the store, the “old” drive-in model Sonic continues to Continue reading

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GM Parts Start Stocking Out

GM Parts Start Stocking Out

October 25, 2019

As the UAW strike continues, GM faces stockouts on repair parts. Dealer lots are getting low on some models as well.

Before the looming strike, GM built up to an average of 77 days of supply of cars on dealer lots.  The typical days of supply is 60-65 days of inventory on dealer lots.


Video Spotlight: In tentative UAW deal, GM trades cash bonuses for future flexibility


This post is based on the NBC News article, Bad luck if your GM car needs spare parts or a repair, as UAW strike continues into its fifth week, by Paul Eisenstein, October 14, 2019, and the YouTube video, In tentative UAW deal, GM trades cash bonuses for future flexibility, by PBS News Hour, October 17, 2019. Image source: Shutterstock / Syda Productions

Discussion Questions:

1. Today’s vehicle manufacturing is based on lean/JIT systems.  How much leverage does UAW have in negotiations today compared to yesteryear?

Guidance: Remind students that vehicle manufacturing in the 1970s did not embrace quality management, lean/JIT, or many other common practices of today’s operations.  This is a good opportunity to review the development of modern operations.  Given that lean/JIT is Continue reading

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CostCo Vertically Integrates to Manage Rotisserie Chicken

CostCo Vertically Integrates to Manage Rotisserie Chicken

October 24, 2019

Costco is planning to vertically integrate by owning production of 40% of its rotisserie chicken supply chain.

Vertical integration is an effort to keep the price at $4.99 to attract customers.  The issue is that the main chicken suppliers are producing fewer whole birds, down from 50% of the supply in the 1980s to just around 15% of the supply today.

Bird size has also increased as the demand for chicken has increased.  Most whole chickens today are too big to fit on the Costco rotisserie production equipment.  Costco needs 6 pound birds and the typical whole chicken is now 7-8 pounds from suppliers.

Costco can control the size of the bird and plans to cut costs per bird by 35 cents by developing their own poultry complex.


Video Spotlight: This Is Why Costco Only Charges $5 For A Rotisserie Chicken


This post is based on the CNN article, Five things to know about Costco’s $4.99 rotisserie chickens, by Nathaniel Meyersohn, October 14, 2019, and the YouTube video, This Is Why Costco Only Charges $5 For A Rotisserie Chicken, by Mashed, February 5, 2019. Image source: Uwe Starke/Image Source

Discussion Questions:

1. After reading Continue reading

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