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Study Case

Case Study: (Group Work)

The Challenge of “Healthy” Fast-Food

Non-GMO, organic, locally sourced . . . these terms are now a common part of our food

vocabulary, although not typically associated with the fast-food industry. Chipotle entered

the fast-food scene in the early 1990s with a seemingly impossible goal of creating a healthy

fast-food alternative.88 Chipotle’s promise of “food with integrity” includes fresh, locally

sourced ingredients and naturally raised meats. They effectively met this promise for many

years, but as the popular fast-food chain has grown to more than 1,500 locations, the

restaurant’s ability to promise such quality while meeting food safety standards has become

a challenge. Attempting to deliver on this promise on a national scale has created a complex

and risky supply chain challenge for the company.

Chipotle’s food contamination problems started with an E. coli outbreak in July of 2015 in

Seattle. Next was a norovirus outbreak in California, followed by salmonellain Minnesota.

Other foodborne illnesses emerged among Chipotle customers in nine more states. Over the

course of a few months, more than 500 customers were sick from contaminated food in

Chipotle stores across the country. Sales dropped 30 percent during the outbreak, and

several stores closed for an extended period of time. The company’s stock value dropped,

and the company faced several lawsuits from customers who were sickened at one of the

stores.

Most national fast-food restaurant chains control food quality by using a central source for

ingredients, exposing the supply chain to fewer outside elements. Simply put, the more

basic the food chain, the easier it is to control. To keep their fresh food promise, Chipotle

sought to prepare as many foods as possible at the local stores. They also sourced

ingredients locally wherever possible, creating relationships with hundreds of vendors. The

complexity of their food sourcing, coupled with in-store food preparation, is most likely

what caused the food contamination problem. There were no known specific negligent acts

on the part of Chipotle; the problems occurred because offering fresh food on such a large

scale creates a situation where quality control is difficult.

In most cases Chipotle did not know which foods were contaminated, making the fix even

more challenging. In response to the crisis, they have implemented new controls to test for

meat contamination and also changed some food-handling and preparation procedures.

They’ve shifted much of their food preparation to centralized kitchens and started sourcing

ingredients from fewer vendors, much like their fast-food competitors have done for years.

To kick off their new standards, Chipotle closed all of their stores for an afternoon to train

employees consistently on the new food-handling standards. While it seems the company is

moving in the right direction, critics suggest that a company that claims to focus so much on

food quality should have done a better job focusing on food safety.

As a group of consultants in Management, answer the following Questions:

1) Why is it important for Chipotle to revise the company’s food-handling standards?

2) Which controls would be more important to Chipotle: feedforward, concurrent, or

feedback? Explain.

3) How can Chipotle make sure that employees are following the new foodhandling

standards?

4) What are some measures of organizational performance that Chipotle management

should use?

*Reference:

- Stephen P. Robbins, Mary A. Coulter (2018) Management, Global Edition, 14/E ISBN-10:

1292215836 • ISBN-13: 9781292215839, Pearson.

**Guidelines for the assignment:

1. This is a group work activity.

2. The submission deadline Monday 30 Nov. 2020 (at 08.00 Pm).

3. Submit your assignment on Word Document (600-1000 words max.).

4. Feel free to use graphs, tables or pictures to support your work.

5. Submission should be by Blackboard.

6. Make sure to write names, ID, section and your group number in the first Page.