Chipotle’s Recipe for Digital Transformation: Cloud and AI

Chipotle CTO Curt Garner has bolstered the fast-food chain’s digital aspirations by leveraging multicloud, which provides a foundation for innovations to improve customer experience and restaurant operations.

When Curt Garner joined Chipotle in 2015, it was as CIO and the fast-food chain’s first chief information officer. At the time, the only technology used for online restaurant orders was, “believe it or not,” a fax machine, he says. Seven years later, the Newport Beach, Calif.-based company has developed a system featuring a robotic arm dubbed “Chippy” that prepares the chain’s famous savory, lime-flavored French fries in an artisanal way every day without human work, with the aim of adapting production to the daily needs of each restaurant. “We use robotic technology to perform all the manipulations that a human would do in this process,” says Curt Garner, noting that Chippy is currently only used in one of Chipotle Mexican Grill’s 3,000 stores, but that its use will expand. “We spent several months in our lab refining the recipes and processes to make this possible.”

The former Starbucks CIO wasted no time in launching the restaurant chain’s digital transformation in 2016, applying and evolving his “learnings” at the coffee specialist to pilot a digital ordering system. . The idea was to offer Chipotle customers the ability to order ahead online and pick up their food from a drive-thru storefront — without resorting to the typical fast-food restaurant speaker boxes or menu boards with drive in. Removing the physical on-site speaker box for controls was a simple concept, but a key part of a larger digital transformation that Chipotle launched in 2018 that led to an explosion in business, in largely because the digital ordering system required less human labor during the pandemic. In 2022, Chipotle’s digital business is expected to be $3.5 billion, well above the annual average of $100-200 million before implementing digital ordering processes in the company. .

Chipotle’s Secret IT Sauce

Curt Garner credits Chipotle’s business model for allowing him to deploy advanced technologies such as cloud, analytics, data lake, and AI uniformly across all restaurants because they’re all built on the same backbone. digital. Many restaurant chains, on the other hand, are individually owned and operated as franchises. “We are not 3,100 different businesses but a single restaurant 3,100 times, while each of these sites is impacted differently by its commercial area, its commuting and its weather conditions,” explains Mr. Garner, who has been promoted to CTO in September 2018 after having proven himself as CIO and then CDIO.

“Part of the strategy and policy that we put in place in early 2016 around the cloud was that the closer we were to the consumer experience, the more we could abstract from that experience and take advantage of the cloud and the services basic “. And the cloud is at the center of it all. Chipotle’s digital commerce platform is built on Microsoft Azure, and its internal business processes, such as ERP, have migrated from on-premises Oracle to OCI. Because the company started so early, 98% of Chipotle’s workloads now run on the cloud, says this CTO, which has allowed the chain to retire its Denver data center and begin implementing a series of cloud-native applications to develop its activities in the United States and Europe.

A basis for moving towards AI and ML

According to Sandeep Unni, senior analyst director at Gartner, this foundation has allowed Chipotle to not only survive but also thrive during the pandemic. “In an industry that has historically been resistant to change and operates with margins on the razor’s edge, the importance of investing in digital, data and customer experience cannot be overemphasized,” says Sandeep Unni. “I look to Chipotle as a perfect example where the strategic digital transformation bets made long before the pandemic paid off.” Currently, Chipotle operates various cloud services that are part of the Microsoft Azure platform, such as its AI and ML modeling services.

Hosted on Azure, the restaurant’s data platform for online customer orders uses built-in AI that performs tasks without human intervention, but Curt Garner also heavily leverages another AI application built on the startup’s technology. up H20, which Chipotle has been using for two years. “We really like their cloud-based AI program,” says Curt Garner. “It allows us to build models and applications very quickly and seamlessly. They have a management plane on top of that, which allows us to dynamically change and monitor performance across the platform and its powerful toolset.”

Building on the foundations

Curt Garner also recently implemented RFID in 100 restaurants to make it easier to track his food supply from local farms to distribution centers and then to each restaurant. The system is linked to Chipotle’s Oracle system, providing traceability, points of origin and real-time insight into the location of supply, especially if suppliers are having issues. But Curt Garner sees additional potential for the system. “I see a future where we combine a technology called ‘real food print’ that we’ve implemented that allows the customer to understand the environmental impact of that order, like the local farm where their food comes from,” continues -he.

He says the company sources more than 14 million tons of local produce, which is becoming increasingly important for customers, especially students. Curt Garner’s flexible cloud infrastructure, which includes a data lake built on Snowflake, also made it easier for the chain to implement PreciTaste, a SaaS and AI system that allows each store to properly forecast its supply needs. The system provides “demand-based cooking and ingredient preparation forecasts to optimize throughput and freshness while minimizing food waste,” according to the company. “Leveraging AI and machine learning, the system monitors ingredient levels in real time and notifies the team of how much to prep, how much to cook and when to start cooking, all while automatically feeding real-time production planning for each restaurant,” the company recently announced.

Flexibility, a competitive advantage

Despite Chipotle’s heavy reliance on technology, Garner maintains that fully automating stores with robots would hurt the business because customers still want to interact with human servers and be understood by them. While this longtime CIO and his team are keen to use the most modern tools of the trade to serve the freshest food possible, Curt Garner also clarifies that he is not married to a single cloud or a single technological infrastructure. .

“Technology is always changing, and one of the things I like about the cloud as a growing business is the flexibility we have to quickly scale up or down and provision more, but also the ability to move to other platforms over time without the cost of legacy that is typically involved with on-premises solutions,” explains the CTO. “I never view our architecture as static,” he adds, before concluding: “I think flexibility and agility will continue to be a competitive advantage for us for some time to come.”

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