Food Safety Magazine

CASE STUDY | August/September 2007

Wendy’s International: The Beef is in the Audit

By Julile Larson Bricher

Wendy’s International: The Beef is in the Audit

Among Wendy’s International, Inc. founder Dave Thomas’ many quotable quotes, there is one that perhaps best captures both the personal and business philosophies of the quick-service restaurant (QSR) pioneer. “You earn your reputation by the things you do every day,” said Thomas, who opened the first Wendy’s Old Fashioned Hamburgers restaurant in Columbus, Ohio, in 1969. Thomas, who passed away in 2002, led by example: To fulfill his childhood dream of “running the best restaurant in the world,” he actively nurtured a corporate culture designed to ensure that Wendy’s reputation would always be synonymous with quality.

And certainly, the continued success of the Dublin, Ohio-based Wendy’s Old Fashioned Hamburgers chain—the third largest QSR chain in the world, with more than 6,700 restaurants in North American and international markets—is a testament to the realization of Thomas’ ideals. The company maintains a stellar reputation among consumers for consistently delivering high-quality products and outstanding customer service. In June, Wendy’s International, Inc. was rated as consumers’ favorite quick-service restaurant for the second straight year, based on consumer responses in QSR Magazine’s 2007 Consumer Survey. In addition, Zagat Survey, the world-leading provider of consumer survey-based leisure content, recently named Wendy’s as having the best hamburger in the QSR industry and ranked it first among quick-service “mega-chains” (i.e., those with at least 5,000 outlets) for food, facilities and popularity. Wendy’s also took the top spot for customer satisfaction in the “limited service restaurants” category in this year’s American Customer Satisfaction Index survey produced by the University of Michigan's Stephen M. Ross Business School.

High marks from consumers is one way that Wendy’s measures its success in upholding the phrase “Quality is our Recipe,” which was placed on the company’s logo by Thomas. “Here at Wendy’s International, there is a true recognition that food safety and quality assurance is absolutely imperative to the success of the company,” says Dennis Hecker, Wendy’s Senior Vice President, Quality Assurance. “It’s deeply ingrained at all levels of management, starting with our CEO, president and senior management, through to the entire management staff at every location.”

There can be no quality without a strong food safety component, adds Hecker. “Of course, we regard high food product quality and consistency as essential to the brand equity and to set us apart from our competitors,” he explains. “But at the forefront of our food safety philosophy is one directive: We absolutely will not compromise customer safety. We regard food safety as a moral obligation to our customers, to our employees and to our shareholders. Let’s face it, we are not only working in the foodservice business, we are also consumers ourselves, so food safety really is the most important mission that we need to fulfill as a company.”

A 27-year veteran of Wendy’s, Hecker heads up the company’s Quality Assurance Department, a comprehensive quality assurance and food safety program with three primary responsibilities: overseeing restaurant-level food safety and sanitation; ensuring supply chain product quality at the point of manufacture or distribution; and assisting the corporation in issues identification and management as it is related to food safety and quality. The QA department operates independently within the organization, reporting directly to Ed Choe, EVP Restaurant Operations. “This framework means that the department has the latitude and authority to conduct all food safety and quality audits without any outside influence to get the most objective measure of performance in these areas,” he says.

While the company’s operations manual dictates the exact protocols for operating the stores from open to close, including steps for specific food safety and quality assurance procedures, awareness and education are the foundation blocks of the Wendy’s commitment to food safety and the programs that ensure it, notes Hecker. All field multi-unit and individual restaurant managers are required to complete coursework and receive certification in the ServSafe food safety program. In addition, food safety is integrated into the educational arm of the company, the Wendy’s Management Institute (WMI) curriculum, for all restaurant managers.

“In the QA Department, our responsibilities range from front-line activities such as the supplier plant and in-store audits, to analyzing and providing expert recommendations to management on food safety and quality issues, to the education component,” Hecker says. “And in each of these areas, our management and staff must be truly committed to doing things right every day to ensure the food safety and quality of every item we serve. That is the reputation we are responsible to maintain.”

It’s Hip to be Square
Innovation is another hallmark of Wendy’s International, which began with Thomas’ groundbreaking decision to offer customers their choice of toppings on fresh, made-to-order hamburgers featuring the unique square-shaped beef patties that give the sandwiches a homemade feel popular with consumers. This was a novel concept in 1969, when QSRs typically pre-made hamburgers using frozen round-shaped patties and topped with little more than condiments and pickles. A decade later, Wendy’s earned the distinction as the first national restaurant chain to introduce the salad bar, and in the 1980s was the first QSR to add baked potatoes to the menu.

Since food safety and quality assurance is such an intrinsic part of the Wendy’s corporate culture, it isn’t surprising that this spirit of innovation has sparked another exceptional advance in continuous improvement to the benefit of the restaurant chain’s customers. In 2006, the Wendy’s Quality Assurance Department rolled out an enhanced in-store auditing and assessment program that ties data together to provide a view of the company’s operations performance that is unique to the industry. With this updated system, one might say that the company that introduced the square ground beef patty has created the well-rounded food safety and quality audit program.

In-Store Audit Innovation
The Wendy’s menu is highly varied, featuring fresh beef hamburgers, chicken sandwiches, fries, Frosty dairy desserts, soft drinks, and a variety of fresh, healthful foods including garden salads, baked potatoes and chili. With this many items offered in more than 6,000 domestic and 348 international stores, the scope of the company’s supply chain is substantial. In North America alone, Wendy’s works with approximately 330 suppliers, including eight ground beef suppliers that produce about 1 million pounds of product a day and 13 poultry suppliers, producing about 5.8 million pounds of product each week. Wendy’s is also supplied by 26 bakeries and 13 processing plants that produce more than 600 million french fries annually. Products are handled by 28 distribution centers located in the U.S. and Canada. In the 19 countries outside of North America in which Wendy’s operates, another 55 suppliers lengthen the company’s supply chain.

“From a food safety and quality standpoint, anything that you can consume at a Wendy’s falls under the auspices of the QA department,” Hecker says. “We are responsible for product quality at the point of manufacture, which we evaluate through plant production audits, and we oversee and manage food safety evaluations conducted at the restaurants.”

In April 2006, Hecker’s department was charged with redesigning and streamlining the store-level programs to gain efficiencies and improve the objectivity of food safety and quality evaluations. “Our established restaurant food safety audit and assessment programs have always included the Quality Service and Cleanliness (QSC) program, which is the store-level food safety and quality auditing by which evaluators look specifically at operational procedures that have food safety implications. The QSC audits had for years been conducted or managed by district managers or franchise operators in addition to various company department auditors. This approach meant that several different auditors were doing several different audits, and that in some cases, the findings were variable.

“We wanted to reengineer the QSC program to gain efficiencies,” he continues. “First, we wanted to scale down from five auditors in the store doing five different audits. Second, by taking away the audit responsibility from district managers or operators, we could increase the span of control—a manager now might have seven stores instead of five because he doesn’t have to do all those audits—and he can focus more efficiently on developing his people, running the restaurants and improving the business. Finally, we wanted to develop a program that would give these managers an objective assessment of their stores’ food safety and quality performance to assist them in identifying both the operations’ strengths and the opportunities for improvement.”

Wendy’s went electronic with its auditing systems seven years previous, using Steton data collection and audit management software, which helped make the redesign less difficult to accomplish, adds Hecker. “We had the electronic auditing capabilities in place, so when senior management came to us and said, ‘We want your department to audit all 6,000-plus restaurants, tell us how you are going to do it,’ we were able to take our QA systems and use that as the foundation to develop a new, wholly independent group focused on in-store audits.”

Following the appointment of Frank Leary, a 25-year veteran of operating Wendy’s restaurants, as national director of the new QSC Restaurant Evaluation Program, the QA team began in earnest to create an ongoing, multidisciplined restaurant assessment program designed to raise the operational, safety, security and human resources level of Wendy’s restaurants, which would be accomplished by providing objective assessment and feedback to company and franchise restaurants. Four regional directors—Dan Vought, Keith Begley, Jeff Schilt and Joe Davis (“Between the four, there’s 100 years of experience at Wendy’s,” notes Hecker)—were appointed to oversee the program. Then, Wendy’s pulled top performers from throughout the company to create the front-line QSC auditing team. “We cherry-picked some of the best people out of the organization. The 31 QSC program audit managers are all long-time Wendy’s restaurant managers or operators, who have tremendous experience in running our restaurants.”

The QSC audit team currently audits every company store twice per year and every franchise restaurant once per year, spending two to three hours on site to take a detailed and comprehensive look at operations, sanitation, structure and systems. In 2008, the team will audit all restaurants, company and franchise, twice per year. Following the unannounced audit, the QSC evaluator re-caps with the manager at each restaurant and the audit is automatically e-mailed to each of the multi-unit operators at the end of each audit.

Wendy’s worked with Steton, the St. George, UT-based mobile data collection and reporting software company, to enhance the audit software and develop new hardware and a server system that the QSC auditors and managers would use to achieve the program objectives. The audit criteria and checklist were developed from various department forms and entered into a central database connected to individual hand-held personal computer (PC) tablets. The technology allows auditors to provide immediate and consistent feedback to field operators, as well as instant trend analysis. The data is also available in real-time to senior management, store audit reports generated from the tablet data are e-mail accessible, and the wireless communication capability of the system enables auditors to instantly escalate potential food safety and brand issues.

By pre-populating the PC tablets with a large set of common criteria and comments, Wendy’s QSC auditors are all working on the same page, which is a big change, Hecker notes. “Before, audits were calibrated once a year, but the auditor in Miami and the auditor in Seattle were each conducting individual audits that might place emphasis on different criteria, which meant variable findings. The pre-populated audit comments in the tablet PCs are all same for all QSC auditors, which ensures consistent application of Wendy’s food safety and quality standards in both company and franchise stores.”

In addition, the enhanced electronic audit system database provides a central repository for all of the data, which means that Wendy’s can harness it to make it meaningful. “It certainly is a tool that, for the first time in the history of the company, enables us to bring operating metrics together into one spot. A lot of people collect great amounts of data that will collapse a warehouse floor and they do nothing with it. This has given us the ability to actually take proactive action using the data we collect because our ability to do trend analysis tells us, systematically, what trends are emerging so that we can correct or modify processes to ensure quality.”

The new in-store audit approach also allows Wendy’s to conduct more than just food safety, sanitation and quality assessments. The Sparkle Evaluators Operation (SOE) audit, based on how a restaurant should operate, including measuring performance in service times, product quality, crew appearance and courtesy, and the Food Safety Evaluation (FSE) audit are conducted at company restaurants twice a year. These two scores inform each store how they are doing operationally in managing the restaurant as well as how well their food safety practices are carried out. The big innovation in data management, says Hecker, is that the new enhanced audit program provides the capability to merge these assessment data with other operational audit data into one all-encompassing evaluation for insight into company performance.

Hecker explains, “We can take the SOE and FSE audit data, and with other audit data—employee file audit, human resource audits, security audits and cash audits, for example—produce a ‘merged evaluation.’ The pre-populated questions intertwine all of these audits. The first question on the audit might be on operations, the second on food safety, the third on safety and security—all separate questions affiliated with a separate audit. The questions are aligned so the auditor can walk through the store without having to revisit any area to conduct different audits. At the end of the day, the information can be sorted and printed out as separate audit reports, or viewed as a whole to provide a big picture of the level of the store’s overall performance.”

This holistic approach, Hecker says, translates into more usable information. “You can slice and dice the audit data any way you want on the manufacturing or store sides—by region, by product, by a single performance criterium—the sky’s the limit. This helps us give store managers the immediate performance picture they need and the district and senior-level managers the big-picture on performance that they require.”

On the Supply Side
The electronic food safety and quality auditing system enhancement has also improved efficiencies and communication with Wendy’s product suppliers. Wendy’s conducts more than 600 plant production audits in the processing plants of its 330 North American-based suppliers, utilizing both in-house evaluators and third-party auditing firms, to ensure that all products delivered to the stores are in compliance with the company’s specifications for product safety, quality and consistency, as well as to evaluate plant systems for regulatory compliance and sanitation.

The audit system innovations on the in-store side have given the plant side a progressive tweak. In particular, the improved consistency of audit reports provides many advantages to this side of the QA function, says Bob McQuattie, Wendy’s Director of Quality Assurance, who oversees manufacturer and animal welfare audits. “Like the QSC in-store audits, we are now able to pre-populate the portable PC tablet with a set list of evaluation criteria, specifications and measurements so that everyone is looking at the same things,” he explains. “This eliminates guessing or the inadvertent omission of important audit criteria that might impact the final results.”

The updated electronic data management system is also having a positive impact on continuous improvement at the supplier level, a core goal for all of Wendy’s auditors, adds McQuattie. Similar to the QSC in-store audit’s instant trend analysis feature, the data collected during the plant assessment can be analyzed and discussed with the supplier on site, enabling the development of action plans to address lower-than-expected performance, compliance issues or opportunities for risk factor management before the auditor departs.

McQuattie notes that enhanced audit data management has also improved his auditing team’s ability to pull more usable information out of the audits for improved statistical analysis. The Wendy’s QA Department schedules mid- and year-end supplier reviews by product category and shares the extracted audit data, presenting it as an overview in terms of overall plant performance and specifications compliance. The electronic data management system allows Wendy’s to view the statistics in various ways to see how well facilities comply, collectively and individually, as well as standard deviations in performance specifications. He relates how Wendy’s achieved a process improvement in one category from its supplier base as a direct result of the QA team’s ability to do better trend analyses with the electronic audit system.

“At a recent mid-year meeting with all eight North American ground beef suppliers, the trend analyses we were able to provide showed that a percentage of the operations were supplying beef patties that weighed more than our specifications allow,” says McQuattie. “We focused the discussion on Wendy’s specific patty weight requirements and worked with suppliers to identify and solve a process control problem.

“We concluded that the problem was tied to the preventive maintenance on the patty forming machine, which if not maintained will perform inconsistently,” he continues. “If the supplier is forming patties that are too heavy, they are losing money and hurting us both financially and on the control side of our business. If the patties are too light, our customers aren’t getting what they are paying for and this causes another issue.

“In this case, the audit trend analysis data illustrated to the suppliers that it is very important to keep a good preventive maintenance program on these machines to ensure the proper weight control, which may cost the supplier a little more to implement but will also save them money in improvements to their own process efficiencies. It also allowed us to bring the standard deviation down in a lot of instances.”

Here’s the Beef
Today, Wendy’s International’s most memorable marketing campaign slogan, the iconic 1980s-era query “Where’s the Beef?”, might just prompt the company’s stakeholders to respond, “It’s in the audits.” The response to the new audit program from corporate store managers, franchise operators, product suppliers and distributors has been overwhelmingly positive since the program fully launched in January 2007, reports Hecker. So positive, in fact, that Wendy’s will roll out the program in all of its international stores in 2008.

Julie Larson Bricher is editorial director of Food Safety Magazine.

Categories: Food Types: Meat/Poultry; Management: Case Studies; Supply Chain: Foodservice/Retail