McDonald's Technology Interference Blocks Restaurant Operations

JAKARTA - When McDonald's first opened in the 1940s, its workers stood at the physical cashier table, the burgers and fries were registered on the paper menu, and its customers paid cash to a human cashier. However, current technology greatly affects every aspect of McDonald's's business so that it can almost be called a technology company that happens to sell burgers.

The McDonald's mobile app, a manless ordering kiosk, a digital menu that changes based on its trends, weather, and others, as well as its generative AI, all allow McDonald's to increase sales and efficiency worth billions of dollars for the company, which has 40,000 locations in about 100 countries.

However, the same technology could also make McDonald's fall. On Friday, March 15, system disruptions hit McDonald's sites in some of its largest global markets, including Japan, Australia, and the UK. This forced many shops to temporarily accept only cash payments or completely close outlets.

McDonald's has not disclosed how extensive the disruption was, but on Friday afternoon, 12 hours after the disruption was first reported, a franchise in San Antonio, Texas did not accept orders on its app and could neither receive cash.

McDonald's said in a statement that the disturbance was caused by an unnamed third-party provider making a "configuration change". When asked for comment, McDonald's referred to the statement. McDonald's Japan on Saturday 16 March apologized for the inconvenience, saying all its restaurants and delivery services were operating normally.

However, widespread disruptions on Friday will likely not shake McDonald's's long-term strategy to increase its dependence on technology. McDonald's wants more customers to order through digital channels such as its apps and kiosks, which already includes a third of its sales in the main market by 2022.

In December, McDonald's announced a partnership with Google to move the restaurant's computer system to the cloud, where the global data scale will allow McDonald's's generative AI systems to understand various patterns and nuances, which resulted in what McDonald's said at that time would be a hoter and fresher food. Generative AIs already drive a lot of restaurant operations and personal offerings made from subscriber internal profiles.

Not just McDonald's. Technology is a du jour strategy of almost every major fast food chain. Starbucks in 2019 announced its own internal AI platform, called Deep Brew," which CEO Kevin Johnson said would further drive personal offerings, store assignments, and inventory management.

"For the next 10 years, we want to be as good as tech giants," Johnson said at a retail conference in 2020, according to Retail Dive, a trade publication. Starbucks in 2022 hired former McDonald's executives to oversee the use of its technology.

The risk of this new technology doesn't just come from system disruptions. Wendy's got a public reaction after her CEO said during a mid-February earnings call that the chain would soon use dynamic pricing' on its digital signature - another technology that would not have been possible before the information era.

The chain then explains that it has no intention of using digital signs to implement a stressing of spikes'' that could allow them to charge higher prices during peak time. In contrast, Wendy's said the CEO's comments referred to his plan to offer customers discounts during the slow section of the day.