Ch. 4 Case 3: Panera

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Slicing the Line Topic: Decision-making process, creative problem solving Panera Bread Company is an American chain of bakery-caf fast casual restaurants based out of St. Louis, Missouri. Founded more than 35 years ago, Panera is now an enterprise with more than 2,000 bakery-cafs, 100,000 associates, and annual systemwide sales of more than $5 billion.68 As an extremely popular destination for hungry customers, Panera had a problem: lines and lines of customers. A bottleneck at the registers for placing orders. Then, another bottleneck of customers waiting to pick up their food. Panera Bread's CEO, Ron Shaich, called it a "mosh pit of people waiting for their food."69 The average customer wait time...8 minutes. Shaich knew that something had to be done about their service mod- el. He knew that online ordering was the solution, but getting that process done right would take more than six years...and lots of decisions! Enter Panera 2.0. What is Panera 2.0? It's a technology-driven initiative that has been tested and retested be- fore being rolled out throughout the company. At a prototype store in Braintree, Mass- achusetts, Shaich and his team found, among other things, that they couldn't just "solve" the order-taking process, the system had to seamlessly flow through to the kitchen processes, as well. It had to address bottlenecks there and ensure that order errors were minimized. Blaine Hurst, Panera's president said, "It was literally hundreds of these little things that we did 70 Problem: A mosh pit! Solution: Technology done right! We know that no decision process is done until there's an evaluation of the decision effec- tiveness...that is, did the decision "fix" the problem? Here are some indicators Panera's man- agers can look at to evaluate the decision's effectiveness71: Same-store sales were up 4.2 percent, an amount well above the industry average. Digital orders now make up 26 percent of sales. Average wait time is 1 minute. More than $1 billion in sales is coming from digital platforms. Panera is not assuming that all its problems are "solved!" Not by a long shot! The company's new push is delivery. And it still has to address the issue of drive-thru traffic flow. But Panera has been widely described by analysts as "one of the most technologically savvy, best per- forming chains in the industry," and its managers have proven to be pretty good at solving problems!72 Discussion Questions 4-22 Which decisions in this story could be considered unstructured prob- lems? Structured problems? 4-23How did Panera Bread use the decision-making process (see Exhibit 4- 10) to tackle its "mosh pit" problem? 4-24Decision making starts with a problem and ends with a solution to solve the problem. Did that happen in this story? Explain your answer. 4-25 Creativity and design thinking are two contemporary decision-making is- sues that we introduced in the chapter. Were creativity and design thinking il- lustrated in this story? Discuss