| | |[pic] | |Taco Bell- A Reengineering Success Story | |A Reengineering Success Story | | | | | | |
1. About Taco Bell
2. The Problem Starts
3. Reengineering to the Rescue
4. The After Effects
About Taco Bell
The franchise, Taco Bell is an eatery that needs no introduction. Taco Bell Corp. based in Irvine, California is a subsidiary of Yum! Brands, Inc. , and the United States’ leading Mexican style quick-service restaurant. Taco Bell serves tacos, burritos signature Quesadillas, grilled stuft burritos, nachos, and other specialty items such as the Crunchwrap Supreme, in addition to a wide variety of Big Bell Value Menu items.
Taco Bell serves more than 2 billion consumers each year in the more than 5,800 restaurants in the US. In 2005, Taco Bell generated sales of $1.8 billion in company restaurants and $4.4 billion in franchise restaurants. More than 80% of their restaurants are owned and operated by independent franchisees. There are currently more than 278 restaurants operating in Canada, Guam, Aruba, Dominican Republic, Chile, Costa Rica, Guatemala, Puerto Rico, Ecuador, Asia, Europe and the Philippines.
The Problem Starts
In 1983, analysis showed that the Taco Bell’s total cumulative growth since 1978 was a shocking negative 16% compared to a positive 6% of the total industry. This prompted the management to pinpoint immediately what was going wrong and where. This led them to identify the following factors:
• Lack of business vision for the company
• Reliance on obsolete management and operational practices, which focused more upon the processes rather than the customers themselves
• Top-down structure with multiple levels of management
• Following traditional approaches, which assumed what customers wanted without even asking them
All the above factors were resulting in slower and costlier service.
Having identified some of the key areas that needed improvement, Taco Bell started reengineering itself out of troubled waters. The more they listened, the more they found out that what customers wanted was very simple- good food, served fast and hot, in a clean environment and at a price they could afford.
Reengineering to the Rescue
The old system of operations at Taco Bell was based upon traditional operational practices, which were grossly insufficient for the economic and business climate of the 21st Century. This entire set-up was based upon certain assumptions, which include the following:
• Assuming that the restaurant knew what the customer wanted without even asking them. This led them to falsely believe that the customer wanted fancier décor, broader menus, outdoor playground etc., instead of quality food at affordable prices.
• Investing in large kitchen areas, which in some instances covered over 70% of the total area in the mistaken belief that it would improve customer satisfaction
• Operating the restaurant along the lines of a manufacturing company rather than a retail outlet. Doing away with this...
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