Taco Bell Case Study Essay

1131 Words Dec 10th, 2012 5 Pages
Workshop Case Study – Taco Bell

Design, Layout & Process Choice “Design for Transformation”

In 1999, three out of every four Mexican fast-food meals purchased in the United States were made from one company – Taco Bell. However, this market dominance may never have come about unless the company had not transformed its operations throughout the 1980’s.

In the early 1980’s, Taco Bell was typical of this kind. It was essentially a job shop operation. Nearly all food production was carried out on site: -

– foodstuffs were prepared from their raw state;
– food items such as ground beef for tacos were cooked for a period of several hours in vats;
– guacamole and other sauces were made-up;
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At that time, Taco Bell did not have a drive-through window, even though 50 per cent of competitors’ sales were from this source.

Beginning in 1983, the CEO of Taco Bell, John Martin, made a number of major changes to the physical layout. The food assembly line was reconfigured to have two shorter lines at right angles to the service counter. This improved product flow and improved customers’ perception of the operation. The introduction of electronic point-of-sale not only improved order taking and cash handling, but also provided improved data on which food forecasting could be made. Other changes included: -

– adding new menu items;
– increasing the average size of new units from 1600 up to 2000 square feet;
– adding drive-through windows;
– the upgrading the décor and uniforms of staff.

However, external pressures meant that Martin also had to adopt a new operations process. By the mid-1980’s, the US fast-food market had matured and competition was fierce. Previously performance was judged on growth, which could be achieved by opening new units. In the mature market-place, market share became much more significant. Labour shortages also meant an increase in labour costs, up by 18 per cent for the industry, but by 50 per cent for Taco Bell due to its relatively larger, skilled workforce. Whereas chains with burger or chicken concepts could offset this

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