Wednesday, August 24, 2011

In pursuit of the perfect chip

Russ Roberts recently interviewed Brendan O'Donohoe of Frito-Lay about the process of making potato chips. Just a few of the highlights:
  • Quality control in the potato chip production process is elaborate, with each individual chip is scanned by computer and those deemed not up to snuff removed with a puff of air, effectively condemning it to the potato chip equivalent of Siberia. 
  • Rather than place chips in a bag after they made, the bag is actually built around the chips in order to reduce the chances of the chips crumbling and breaking, and is then vacuum-sealed for freshness.
All this to produce something as relatively mundane as a potato chip. And Frito-Lay isn't alone -- take a look at the effort McDonald's devotes to a new product launch:
Take the snack wrap, which came about when restaurants started to see a plateau in sales volume of its Chicken Selects. McDonald's executive chef, suppliers, and franchisees got together at headquarters to figure out how to ramp up the turn of the crispy chicken strips. After chefs, food scientists, suppliers, and members of the menu-management team and advertising agency weighed in on how to define the product and pricing, the snack wrap had to pass muster with 150 to 200 consumers in focus groups.  
It then went into a four- to six-week operational test in a handful of restaurants to determine if changes needed to be made in crew positioning or equipment. McDonald's had mastered the bun, but with the snack wrap, the menu-development team had a lot of work to do operationally around tortillas: What was the right packaging? How do you get them at the right temperature for the customer? What's the right amount of flexibility in the tortilla?
Yes, you read that correctly, they are detail-oriented down to the level of the flexibility of the tortilla. Do McDonald's or Frito-Lay do any of this out of the goodness of their hearts? From a primal urging to provide tasty snacks to people? Doubtful. More likely the primary motivation is to generate profits (I sometimes wonder if people's views of capitalism/pursuing money would change if profit were to be renamed "reward for doing a good job money"), but in the process of pursuing this selfish goal they go to extraordinary lengths to serve their customers and provide them with the highest quality product possible. It's amazing.

This is the realm of the private sector. This is the sector that I want impacting my life as much as possible, not government. 

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