Analysis

Total Quality Management (TQM)

• Customer Satisfaction – This is the key component to Chipotle’s success.  Each order is made specifically for each customer.
• Customer Involvement – Customers could not be any more involved in the process.  The orders are built directly in front of the customer and tailored to their specific specifications
• Continuous Improvement in Performance – Chipotle is always looking for ways to improve serving speed and get better products.

Employee Involvement

• Internal customers - employees who rely on the output of other employees
• Chipotle’s internal customers are the employees who work in the front preparing the food.  They depend upon the workers in the back to keep their meat and produce products stocked
• External customers - people who buy a service or product
• These are the people who go in to order food

Customer Satisfaction

• Conformance to Specifications – each order tailored to each customer
• Value – Chipotle offers high quality meat and produce at an affordable price
• Fitness For Use – The order and preparation process and time management is highly effective and time

Teamwork

• Teamwork is a key component to Chipotle’s success
• The front team is responsible for taking and preparing the orders
• The back team is responsible for preparing the food and keeping the front stocked

Prime Cost Factors

• Incorrect orders – orders that are not properly prepared or do not meet the customers specifications are disposed of. Each order that is thrown away costs Chipotle approximately $7. Each day approximately 3-5 orders are thrown away. This equates to about $196 per week in mistakes.
• Spoiled products – occasionally shipments of unsatisfactory good are received. These meat and vegetable products are disposed of immediately.  The food authority is notified and store credit received. Chipotle has a food inspector come in once a week to ensure the restaurant is clean and food products are up to standards.
• Employees – hourly employees are a major cost for the store. There are 15-20 employees scheduled each day.  There are always four employees in the front and four in the back.  Employee wages vary starting from $8 per hour.