Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Tuesday, April 11, 2006

Outsourcing

Matt Richtel writes:

The Long-Distance Journey of a Fast-Food Order - New York Times: SANTA MARIA, Calif. -- Like many American teenagers, Julissa Vargas, 17, has a minimum-wage job in the fast-food industry -- but hers has an unusual geographic reach. "Would you like your Coke and orange juice medium or large?" Ms. Vargas said into her headset to an unseen woman who was ordering breakfast from a drive-through line.... What made the $12.08 transaction remarkable was that the customer was not just outside Ms. Vargas's workplace here on California's central coast. She was at a McDonald's in Honolulu. And within a two-minute span Ms. Vargas had also taken orders from drive-through windows in Gulfport, Miss., and Gillette, Wyo.

Ms. Vargas works not in a restaurant but in a busy call center in this town, 150 miles from Los Angeles. She and as many as 35 others take orders remotely from 40 McDonald's outlets around the country. The orders are then sent back to the restaurants by Internet, to be filled a few yards from where they were placed.

The people behind this setup expect it to save just a few seconds on each order. But that can add up to extra sales over the course of a busy day at the drive-through.

While the call-center idea has received some attention since a scattered sampling of McDonald's franchises began testing it 18 months ago, most customers are still in the dark. For Meredith Mejia, a regular at a McDonald's in Pleasant Hill, Calif., near San Francisco, it meant that her lunch came with a small helping of the surreal. When told that she had just ordered her double cheeseburger and small fries from a call center 250 miles away, she said the concept was "bizarre."...

Ms. Vargas seems unfazed by her job, even though it involves being subjected to constant electronic scrutiny. Software tracks her productivity and speed, and every so often a red box pops up on her screen to test whether she is paying attention. She is expected to click on it within 1.75 seconds. In the break room, a computer screen lets employees know just how many minutes have elapsed since they left their workstations.

The pay may be the same, but this is a long way from flipping burgers.

"Their job is to be fast on the mouse -- that's their job," said Douglas King, chief executive of Bronco Communications, which operates the call center.

The center in Santa Maria has been in operation for 18 months; a print-out tacked to a wall declares, "Over 2,540,000 served." McDonald's says it is still experimental, but it puts an unusual twist on an idea that is gaining traction: taking advantage of ever-cheaper communications technology, companies are creating centralized staffs of specially trained order-takers, even for situations where old-fashioned physical proximity has been the norm....

Jon Anton, a founder of Bronco, says that the goal is "saving seconds to make millions," because more efficient service can lead to more sales and lower labor costs. With a wireless system in a Home Depot, for example, a call-center operator might tell a customer, "You're at Aisle D6. Let me walk you over to where you can find the 16-penny nails," Mr. Anton said....

When the customer pulls away from the menu to pay for the food and pick it up, it takes around 10 seconds for another car to pull forward. During that time, Mr. King said, his order-takers can be answering a call from a different McDonald's where someone has already pulled up.

The remote order-takers at Bronco earn the minimum wage ($6.75 an hour in California), do not get health benefits and do not wear uniforms. Ms. Vargas, who recently finished high school, wore jeans and a baggy white sweatshirt as she took orders last week.

The call-center system allows employees to be monitored and tracked much more closely than would be possible if they were in restaurants. Mr. King's computer screen gives him constant updates as to which workers are not meeting standards. "You've got to measure everything," he said. "When fractions of seconds count, the environment needs to be controlled."...

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