Supply Chain Case Study: Chipotle

Abstract

Chipotle is facing the consequences of failing to monitor its quality system effectively. In a damage control stunt, the restaurant chain is using heavy and mighty words to win the trust of its clientele. Though the company is huge, with a sizeable number of suppliers supplying multiple items, checking them all for compliance has been the challenge. In fact, its strong point of sourcing locally has been its weakest link. Previously, Chipotle exercised stringent measures, but with the current outbreak, it seems the strategy might not be working or the strategy has significant gaps. Using flowcharts, we review the current situation at Chipotle and identify gaps that need fixing using another flowchart. Notably, we will consider another restaurant with no quality issues for reference.

Chipotle Supply Chain before the Outbreak

Small, but Numerous Suppliers

Commentary for the Chipotle Supply Chain before the Outbreak

The article has provided a preview of the sourcing methodology of Chipotle and summed up in the above flowchart. The article outlines that the company has stringent sourcing requirements on the part of its vendors. Some of the vendors have demonstrated to lack the capacity to install quality parameters. Chipotle on its end did not use its expertise and capital possessions to assist its minor suppliers in meeting the quality demands, which exposed the first gap.

Chipotle’s food products require the interaction of machine and man to process. Human touch is necessary to finish off the products before they get to its clients. In light of this, the health of the workers is reflective of how clean the food is as it lands on customers’ plates. The element, though supported with paid sick leaves since July 1, 2015, not all employees heeded to the demands of an effective health system. According to the CDC (2014), close to three-quarters of all norovirus outbreaks result from employee virus infection when working. Chipotle had not effectively closed this gap in its supply chain. Ideally, as evaluated by Derigne (2016), although workers are granted sick leave, they should be compensated even on days they missed work to prevent them from coming to work when sick and avoid worrying about their income.

It has proved to be an uphill task for Chipotle to determine the sources of its contamination given the number of suppliers it has. The approach to source from multiple suppliers was necessitated by two factors. First, to appeal to the market that it sources quality organic food free from contamination by industrial chemicals used to produce industrial food. Second, sourcing from local producers is an immeasurable public relations stunt that shows the concern of the company of the local economy. The aspect of having multiple producers has left the quality gap devastatingly open. To make it worse, Chipotle does not emphasize on the need for traceability, an aspect that cannot be overruled in food quality and safety as examined by (Aung & Chang, 2014). To ensure that quality aspects are integrated into its food quality and safety programs, Chipotle should adopt the following flowchart.

All Suppliers   Ordering   Service to Consumer   Recommended Chipotle’s Supply Flow Chart

Commentary on Recommended Chipotle’s Supply Flow Chart

The flow chart above indicates that Chipotle should not segregate its suppliers as big or small. Instead, they should be treated equally and have their products subjected to sufficient quality checks. One way of ensuring that products meet quality standards is by sourcing the products from a small pool of suppliers. Reducing the number of suppliers will make quality monitoring easy and cost-effective. By doing this, Chipotle will have the opportunity to support its suppliers in ensuring quality measures are met. Though maintaining a high number of local vendors has its own advantages such as supporting local economies, it also exerts immense pressure in its bid to control quality. Unfortunately, the problem with this strategy is that it outweighs the good prompting the strategy to be abandoned altogether. Alternatively, Chipotle can look for ways that will make its small local producers have substantial products that will warrant the installation of quality assessment facilities and infrastructure.

The flow chart above has provided for a centralized procurement system. Adopting this system will make it easy to support local producers, as their product will be aggregated in a central location. With this strategy, there should be a traceability mechanism that can help Chipotle work backward with a high degree of confidence to nab a specific element that is contravening quality measures. Additionally, Chipotle should work to develop production guidelines that will ensure that its producers prevent the occurrence of an undesirable outcome early enough. Inspections to farms and processing centers should take center stage to prevent catastrophes early enough. The method is cost-effective if considered in the long-term as discussed by (Drew & Clydesdale, 2015). Chipotle should also consider evaluating the quality of products before receiving them in their central holding areas, to exonerate suppliers. Consequently, to vindicate the cooks and other staff handling the food, Chipotle should institute quality measures before the finished product gets to the hands of the consumers. Doing this will help the company contain a catastrophe before it escalates.

KFC Chicken Supply Chain

The following chain indicates the flow chain of chicken from farmers in KFC all the way down to consumers.

The flow chart above indicates that KFC is serious about its quality metrics. The fast-food franchise provides for the control of quality right at the farm level. The producers are checked for their consistency and compliance using quality metrics provided by KFC. If the metrics are met, the farmers’ flock is curled and processed ready for the kitchen. To reduce the cost of quality control, the produce is sourced from a few producers who have the capacity to mass-produce. This ensures that quality control is quick, cost-effective, and easy to trace back.

Conclusion

It is evident that there is a considerable emphasis on Total Quality Management (TQM) in the recommendations offered in this paper. With TQM, there is the need for Chipotle to ensure that all its supply-side factors, processing and culinary factors, and human resource aspects are considered for quality, and appropriate actions are taken to ensure that quality is not compromised. The company, in efforts to ensure that there is an efficient and reliable supply side, especially considering the numerous suppliers it has, must engage a traceability mechanism. The strategy/system will ensure that problems with quality if discovered, are worked on backward for a more precise response. 

References

Aung, M. M., & Chang, Y. S. (2014). Traceability in a food supply chain: Safety and quality perspectives. Food control, 39, 172-184.

Centers for Disease Control and Prevention. (2014). Preventing Norovirus Outbreaks. Retrieved from: http://www.cdc.gov/vitalsigns/norovirus/index.html.

Drew, C. A., & Clydesdale, F. M. (2015). New food safety law: effectiveness on the ground. Critical reviews in food science and nutrition, 55(5), 689-700.

DeRigne, L., Stoddard-Dare, P., & Quinn, L. (2016). Workers without paid sick leave less likely to take time off for illness or injury compared to those with paid sick leave. Health Affairs, 35(3), 520-527.