There’s a McDonald’s around the corner from our offices on the edge of Liberty Village. It’s not the nicest McDonald’s, mostly because it’s in Parkdale, but it’s fine if you want to get a quick bite and get out.
They have the new touch screen ordering system in place where you order on a screen, get a numbered receipt and you wait ten minutes with a dozen other people for some employee to get your food together. Eventually your order is prepared, someone yells out your number and you are on your way. It’s terrible customer service, but it works.
No ice cream for you!
For about two months now, at this McDonald’s, when you try to order a cone or sundaes on the touch screen kiosk, it says “Sorry, this item not available”. We all assumed that meant that ice cream wasn’t available because the machine was broken. Once or twice over the last couple of months, we noted that the ice cream machine was torn apart during the day and not working.
Today I walked over to see if I could get a hot fudge sundae. The kiosk said it wasn’t available so I figured I would ask the manager if they were ever going to have ice cream again.
She told me that there was nothing wrong with the ice cream machine.
When I noted that the kiosk wouldn’t let me buy any ice cream products, she informed me that “too many people were buying ice cream from the kiosk and the machine would get overwhelmed so they had to stop selling from the kiosk.”
In other words, demand for ice cream was greater than their ability to supply it so they stopped selling it entirely.
Valid problem solved badly
That’s admittedly a problem. It’s no good if you sell ice cream and the machine is overwhelmed and breaks down. The principle of supply and demand is fairly simple and my local McDonald’s has a few options. They can increase supply to accommodate demand, or they can limit demand to keep it below what they can safely supply.
Now, I’m no expert on economics or supply chain management, but I have to imagine that there is someone at McDonald’s who could do the math and determine whether it’s worth it to invest in an increase in their ice cream supply. And maybe they did that (but I doubt it).
I’m willing to bet you a McDonald’s ice cream sundae that the solution that they ended up going with – limiting demand by simply removing the items from the ordering system that the vast majority of customers use – was done without any analysis of whether adding capacity would have made more sense.
No data leads to shortcuts and bad bets
The temptation to take the quick and easy solution is always there for product managers just as it was for this restaurant manager. Maybe the quick solution is the best way to go, but without proper data and analysis, there’s no chance to fully understand the issue and come up with the right solution.
Since it’s now literally impossible to order ice cream from the kiosk, and since few (if any) customers know you can still order from the counter, how does McDonald’s know whether the demand at any given time still exceeds the supply?
Perhaps the demand for ice cream today would be lower than the threshold at which the machine would breakdown. It’s not very hot outside, and I bet that ice cream demand really matches up with the weather. But how would anyone at that store know? They can’t and they don’t.
Even worse, maybe eventually someone will maybe try to make the case to add a second machine, or switch to a higher capacity machine, and they won’t have any justification to do it. They’ll look at sales of ice cream and wonder why they would have to add more capacity when customer demand seems so low.
Apply it to your business or product
The same might apply in any business. An independent coffee shop with a single till might be losing customers who walk in during the morning rush, see a long line and continue to the Starbucks down the street instead (hello Louie…are you listening???). But if they asked staff how the mornings were, they’d say, “Fairly busy, but the lines never got too long.”
For the coffee shop, maybe a camera on the front door that revealed when people looked in and then walked by would provide the data required to make the decision to add staff, or capacity. But without the data being collected and analyzed, there’s no way to make that call.
The takeaway is this: collect the data, analyze it, and don’t opt for the easy solutions. Otherwise you risk turning good paying customers away and leaving money on the table.