Case Study ofTaco Bell

What we will doIn the below présentation we will:• Review the performance of Taco

Bell• Examine reasons for reduced

productivity•Review overall effects after

reengineering

What is Taco Bell• Taco Bell is an American chain of fast-food

restaurants based in Irvine, California.• A subsidiary of Yum Brands, Inc., which

serves American-adapted Mexican food.• Taco Bell serves tacos, burritos,

quesadillas, nachos, other specialty items, and a variety of "Value Menu” items.

Company HistoryTimeLine Discovery

1946 Glen Bell-opened a hot dog stand called Bell’s Drive-In in San Bernardino, California in 1946 when he was 23 years old

1952-1961 Started selling Taco under the name of Taco-Tia and El Tacos

1962 Bell sold the El Tacos to his partner and built the first Taco Bell in Downey

Company HistoryTime Line Discovery

1964 Kermit Becky, a former Los Angeles police officer, bought the first Taco Bell franchise from Glen Bell in 1964

1967 100th restaurant opened at 400 South Brookhurst in Anaheim

1970 Taco Bell went public with 325 restaurants

1978 PepsiCo purchased Taco Bell from Glen Bell

Taco Bell outside United States

Australia India

Canada Mexico

China Philippines

Cyprus Poland

Greece Singapore

Iceland Spain

South Korea United Kingdom

Problem Recognition• Time Frame 1: Early 1980’2• Production process was Labour intensive as

Labour availability was abundant.• It was a low-risk business as low level of

technology was used.

Time frame 1- Early 1980’s• It was a Assembled to order process.• Wait time was 105 seconds.• Inconsistances in raw materials and quantity

of cooking and preparation work required, So it resulted in time wastage.

Time Frame 1- Early 1980’s

Time Frame 1: Early 1980’s• No drive –through windows• Assembly portion of the kitchen consisted of

one “line” containing prepared food at which crew members and management stood, assembling menu items and orders

• Hence, we can say operational practices were focusing on processes rather then customers

Time Frame 1: Early 1980’s• No business Vision of the company.• They were following traditional measures of

assuming what customers want• No stress were given on locations, advertising

and product innovations.• No clarity whether they are in fast food

business or Mexican food business

Time Frame 1:Early 1980’s

Reengineering: Time Frame 2-(1983-1988)

Time Frame 2-(1983-1988)• Growth to an average of 249 stores per year which

were earlier 100 units per year.• New Menu items were created

Time Frame 2-(1983-1988)

Problem Recognition during Time Frame 2-(1983-1988)

Drawbacks of Taco Bell during second time Frame:Management Information system were non

existence.Computers were pretty much just for executives

Reengineering- Time Frame 3(1989-1991)

• Focus from process oriented changed to customer oriented Organization

Time Frame-3(1989-1991)• Company standard for customer service was

identified as FACT

Time Frame-3(1989-1991)• Introduction of Value Menu• Origin of New Taco Bell

Time Frame-3(1989-1991)

Time Frame-3(1989-1991)

Time Frame-3(1989-1991)• In 1990, Taco Bell Introduced Speed of service

to put the fast back in fast food • Speed of service program reduced waiting

time for customers in restaurants.• Reformulating certain recipes and developing

a heated holding area.

Benefits of Speed of Service1.Taco Bell was able to 60% of its menu items ready for immediate sale

2. Increase in Peak hour transaction capacity by 54%

3.Decrease Customer Waiting time by 71%-to 30 seconds

Taco• Taco, Total Automation of Company operations , was an MIS

project to place a computer, networked to headquarters, in every store.

TacoWith the help of TACO, RM can do:1.Better labor Scheduling2.Better product production planning

Automation of POS• POS is Taco Bell vision to have network at every store

The new Taco BellWith the removal of layers of management and

frequent supervisor of restaurants , new control were require to ensure adherence to standards. They adopted three things:

A 1800 toll free number where people can complain Mystery shoppers Marketing surveys

Results• Significant increase in profitability and sales• Turnover declined marginally from 1989 to

1991

Results• First food chain to focus on value for the

customer.

Recommendations• They can improve on: Product planning Location planning Capacity planning Job design Supply chain management Maintenance Quality management

Made by:

Amit Bharara- PGDM 11 02 B40 Devina Misra-PGDM 11 02 B48 Gaurav Rampall-PGDM 11 02 B50 Gurjot Singh-PGDM 11 02 B52 Kamal Syal- PGDM 11 02 B54 Ramandeep Singh-PGDM 11 02 B64