Revolutionizing the means of production, USA style
Source Louis Proyect
Date 11/05/09/07:28
Taco Bell and the Golden Age of Drive-Thru
Operational innovations at restaurants like Taco Bell rival those
at any factory in the world. A view from the drive-thru window at
how they do it

By Karl Taro Greenfeld

IT MUST ALWAYS be, "Hi, how are you today?" Never, "Hi, how are
you?" "Hi, how's it going?" or "Welcome to Taco Bell." Never,
"What will it be today?" or, even worse, "What do you want?" Every
Taco Bell Service Champion memorizes the order script before his
first shift. The folks who work the drive-thru windows at the Taco
Bell here in Tustin, Calif., about 35 miles south of Los Angeles,
and everywhere else, are called Service Champions. Those who work
the food production line are called Food Champions.

You think you know it—"Hi, how are you today?" It seems easy
enough. And you follow that with, "You can order when you're
ready," never "Can I take your order?" The latter puts pressure on
the driver, who might be a distracted teenager busy texting her
BFF or a soccer mom with a half-dozen kids in the van. "They don't
need the additional pressure of a disembodied voice demanding to
know their order," explains Mike Harkins. Harkins, 49, is
vice-president of One System Operations for Taco Bell (YUM), which
means he spends all day, every day, thinking about the kitchen and
the drive-thru.

He has been prepping me for my debut at the window. Getting ready,
I wash my hands, scrubbing for the mandated 20 seconds; slide on
rubber gloves; and don the three-channel headset that connects me
to the ordering station out in the lot, as well as to my fellow
Champions. I take my place at the window. I hear the ding
indicating a customer has pulled into the loop around the
restaurant, and I immediately ask, "Hi, how's it going?"

It gets worse from there. As a Service Champion, my job is to say
my lines, input the order into the proprietary point of sale (POS)
system, prepare and make drinks like Limeade Sparklers and
Frutista Freezes, collect bills or credit cards, and make change.
I input Beefy Crunch Burritos, Volcano Burritos, Chalupas, and
Gorditas. My biggest worry is that someone will order a Crunchwrap
Supreme, a fast-food marvel made up of two kinds of tortillas,
beef, cheese, lettuce, tomatoes, and sauces, all scooped, folded,
and assembled into a hand-held, multiple-food-group package, which
then gets grilled for 27 seconds. An order for a Crunchwrap
Supreme, the most complex item on the menu, sometimes requires the
Service Champion to take up position on the food production line
to complete it in anything like the 164 seconds that Taco Bell
averages for each customer, from driving up to the ordering
station to pulling away from the pick-up window.

Drive-thru is the operational heart of the fast-food industry, as
central to a brand like Taco Bell as the kitchen itself, maybe
more so. According to the National Restaurant Assn., the fast-food
industry will do $168 billion in sales for 2011, and about 70
percent of that will come in through drive-thru windows. The
technology deployed at order stations and pick-up windows has
evolved to meet that demand. Every step is measured, every
movement calculated, every word scripted. Taco Bell, with more
than 5,600 locations in the U.S., currently operates some of the
fastest and most accurate drive-thru windows in the industry, at
least according to QSR magazine's last survey, in 2009, though for
years they lagged. The system is the result of a 15-year-plus
focus on the window as the core of the business. Taco Bell's pride
in moving from the bottom of the pack to near the top is also part
of the reason it allowed a journalist, unsupervised by public
relations staff, to work the line.

Above me on the wall, a flat-screen display shows the average time
of the last five cars at either the order station or the pick-up
window, depending on which is slowest. If the number is red, as it
is now, that means one, or both, of the waits is exceeding 50
seconds, the target during peak periods. It now shows 53 seconds,
on its way to 60, 70 ... and then I stop looking. The high-pitched
ding that announces each new customer becomes steady, unrelenting,
and dispiriting—85 cars will roll through over the peak lunch
rush. And I keep blowing the order script.

I fall behind so quickly and completely that restaurant manager
Amanda Mihal, a veteran of 12 years in the QSR business (Quick
Serve Restaurant, the acronym for an industry that makes acronyms
for everything), has to step in. "You'll get it," Amanda says as
she fixes an order that I have managed to screw up. "Eventually."

Go into the kitchen of a Taco Bell today, and you'll find a strong
counterargument to any notion that the U.S. has lost its
manufacturing edge. Every Taco Bell, McDonald's (MCD), Wendy's
(WEN), and Burger King is a little factory, with a manager who
oversees three dozen workers, devises schedules and shifts, keeps
track of inventory and the supply chain, supervises an assembly
line churning out a quality-controlled, high-volume product, and
takes in revenue of $1 million to $3 million a year, all with
customers who show up at the front end of the factory at all hours
of the day to buy the product. Taco Bell Chief Executive Officer
Greg Creed, a veteran of the detergents and personal products
division of Unilever (UL), puts it this way: "I think at Unilever,
we had five factories. Well, at Taco Bell today I've got 6,000
factories, many of them running 24 hours a day."

It's as if the great advances of human civilization, in everything
from animal husbandry to mathematics to architecture to
manufacturing to information technology, have all crescendoed with
the Crunchwrap Supreme, delivered via the pick-up window.

"The most advanced operational thinking in the world is going on
in the back of a QSR," says Mike Watson, a former senior
vice-president for operations at Wendy's and currently executive
director of operations engineering at WD Partners, a consulting
firm that works with QSR brands. "If you have it laid out where it
doesn't flow right, that means less order flow, less product,
lower sales."

The big brands spend hundreds of millions and devote as much time
to finding ways to shave seconds in the kitchen and drive-thru as
they do coming up with new menu items. "The majority of the
business now happens around the back of the building," says Blair
Chancey, editor of QSR magazine. "So much money and R&D go into
perfecting the production system because there is so much money to
be had."

The development of new menu items has become subservient to the
need to get food to drivers as quickly as possible. At Taco Bell,
for example, a 2006 decision to add a new grill to the
line—forcing thousands of franchisees to upgrade their kitchens,
retrain staff, and modify the food preparation process—was far
more momentous than decisions about switching the marketing
campaign from, say, "Make a run for the Border" to "Think Outside
the Bun."

The food was designed for mass production almost from the start.
Glen Bell, Taco Bell's founder, began experimenting in 1950 with
what he called a tay-co, trying to devise a crispy tortilla shell
that wouldn't shatter when stuffed with ground beef, lettuce, and
cheese. He had watched customers in Mexican restaurants eating
their soft tay-cos with their fingers, folding the end with one
finger to keep sauce from dripping. Bell felt a hard shell would
lend itself to the assembly-line style of food preparation
pioneered by McDonald's. He invented a wire basket with six slots
for corn tortillas that could be dunked in boiling oil and then
removed. To facilitate the assembly process, he designed a rack
that allowed workers to slide the shells past the trays of beef,
lettuce, and cheese, the tacos taking shape the same way a car
does as it rolls through the factory. Both those implements exist
in every Taco Bell today. The assembly line would increasingly
determine the texture, shape, and taste of the food as big brands
made menu decisions based as much on what was operationally
possible as on what tasted good.

Bell opened and closed several fast-food operations before
launching Taco Bell in 1962. Spurred by the success of those
hard-shell tacos, he would franchise and eventually take Taco Bell
public in 1969, before resigning from the board in 1975. Taco Bell
was acquired by PepsiCo (PEP) in 1978, then spun off with Pizza
Hut and KFC to form Tricon Global Restaurants in 1997, which
became Yum! Brands (YUM) in 2002. None of that would have been
possible without coming up with a faster, easier way to deep-fry
tortilla shells.

Mike Harkins started working at 7-Elevens when he was 15 and spent
11 years at Southland Corp., putting himself through Grossmont
College, where he earned a degree in accounting. Taco Bell
recruited him in 1996 to be a market manager overseeing the San
Diego area. (Even his oldest son worked as a drive-thru Service
Champion for a year and half.) Harkins managed restaurants as
well—it has become almost a requirement that Taco Bell senior
management put in some time running an actual restaurant—and as he
shows me around the Tustin Taco Bell, it's obvious he knows where
everything is without bothering to look. "I've spent my whole life
living in 7-Elevens and Taco Bells and I've thought a lot about
what makes these kinds of operations go," he says, pulling on
rubber gloves and pointing to the food production line. "You have
to have consistency. You walk into any Taco Bell, and you see,
roughly, this."

Every Taco Bell has two food production lines, one dedicated to
the drive-thru and the other to servicing the walk-up counter.
Working those lines is no easier than wearing the headset. The
back of the restaurant has been engineered so that the Steamers,
Stuffers, and Expeditors, the names given to the Food Champions
who work the pans, take as few footsteps as possible during a
shift. There are three prep areas: the hot holding area, the cold
holding area, and the wrapping expediting area. The Stuffer in the
hot holding area stuffs the meat into the tortillas, ladling beef
with Taco Bell's proprietary tool, the BPT, or beef portioning
tool. The steps for scooping the beef have been broken down into
another acronym, SST, for stir, scoop, and tap. Flour tortillas
must be cooked on one side for 15 seconds and the other for five.

When I take my place on the line and start to prepare burritos,
tacos, and chalupas—they won't let me near a Crunchwrap Supreme—it
is immediately clear that this has been engineered to make the
process as simple as possible. The real challenge is the wrapping.
Taco Bell once had 13 different wrappers for its products. That
has been cut to six by labeling the corners of each wrapper
differently. The paper, designed to slide off a stack in single
sheets, has to be angled with the name of the item being made at
the upper corner. The tortilla is placed in the middle of the
paper and the item assembled from there until you fold the whole
thing up in the wrapping expediting area next to the grill. "We
had so many wrappers before, half a dozen stickers; it was all
costing us seconds," says Harkins. In repeated attempts, I never
get the proper item name into the proper place. And my burritos
just do not hold together.

With me on the line are Carmen Franco, 60, and Ricardo Alvarez,
36. The best Food Champions can prepare about 100 burritos, tacos,
chalupas, and gorditas in less than half an hour, and they have
the 78-item menu memorized. Franco and Alvarez are a precise and
frighteningly fast team. Ten orders at a time are displayed on a
screen above the line, five drive-thrus and five walk-ins. Franco
is a blur of motion as she slips out wrapping paper and tortillas,
stirs, scoops, and taps, then slides the items down the line while
looking up at the screen. The top Food Champions have an ability
to scan through the next five orders and identify those that
require more preparation steps, such as Grilled Stuffed Burritos
and Crunchwrap Supremes, and set those up before returning to
simpler tacos and burritos. When Alvarez is bogged down, Franco
slips around him and slides Crunchwrap Supremes into their boxes.
For this adroit time management and manual dexterity, Taco Bell
starts its workers at $8.50 an hour, $1.25 more than minimum wage.

Chief Operating Officer Rob Savage's office at Taco Bell's
headquarters, or, as they call it, the Restaurant Support Center,
in Irvine, Calif., looks out over Interstate 405 toward the
coastal mountains along the Pacific. Savage and Harkins are
explaining how Glen Bell never envisioned a drive-thru when he
created his first Mission-style Taco Bells. As the brand grew to
more than 6,000 locations by the 1990s, the company found itself
struggling to deliver on both speed and accuracy, coming in close
to the bottom of QSR magazine surveys. "We were getting slammed,"
says Savage. "We realized we didn't have good systems. We didn't
have good processes, training."

In the early 1990s each Taco Bell location was coming up with its
own responses to a drive-thru business already delivering more
than 50 percent of the brand's revenue. There was no order script.
Service Champions were constantly running back into the kitchen to
grab missing items. "We were getting the speed part, but
sacrificing accuracy," says Harkins. The response, of course, was
to create an acronym, TRED, which, after much discussion among the
operations team seated in Savage's office, is determined to stand
for Target, Rush Readiness, Equipment Functionality, and
Deployment. What it meant was that operations throughout the brand
were standardized, bottlenecks were identified, and staffing was
optimized to deploy enough bodies to handle the peak traffic
periods. One of their discoveries was that at some locations, 70
percent of the business was coming through the drive-thru, and 80
percent of that was coming in about 90 minutes of peak time around
lunch. That meant that 56 percent of the total business was being
conducted at one window in one and a half hours.

Through the mid and late '90s, Taco Bell designed and implemented
the kitchen and drive-thru operation it still uses today. It
eventually got its speed and accuracy to where it consistently
beat the 3-minute, 30-second target per order, even during peak.
Taco Bell does this while serving a wider range of menu items, and
more complicated food, than the hamburger chains.

The program was so successful that in 2009 the brand was the first
to finish in the top five in QSR magazine's Drive-Thru Performance
Study in both speed and accuracy, averaging 164 seconds per
vehicle with an accuracy rate of 93.1 percent. Wendy's was fastest
with an astonishing 134 seconds per vehicle, but it didn't crack
the top five in accuracy. Citing a need to protect "key secrets"
central to its business, Wendy's declined to provide access to its

There is no secret formula for Wendy's success, says former
Vice-President Watson, other than "a consistent operating system
and training, and measures to reinforce positive behaviors."
Pretty similar, in other words, to Taco Bell's TRED system, though
likely with a different acronym.

Visit any kitchen in the QSR industry, and you will see certain
similarities. The food production line will be in a T-pattern,
with the dine-in counter and the pick-up window at each end of the
top of the "T." There have been headsets since the 1970s, and a
strict division of labor has been in place since the 1960s, albeit
with tweaks and modifications that have made it possible for a
McDonald's employee to assemble a Big Mac in 15 seconds. Screens
throughout the kitchen displaying orders and order times have made
the kitchen faster.

Drive-thru accuracy has improved immensely. Much of the credit for
that goes to the verification board, first used by McDonald's in
the '90s, which let customers see their orders rather than just
hear them read back. This eliminated the large percentage of order
mistakes that were actually customer errors and not the result of
a drive-thru worker putting the wrong thing into the POS or a food
worker preparing the wrong item. "That meant I knew if you
understood me and I understood you," says Dennis Lombardi of WD
Partners. "That was huge for customer satisfaction."

The operations are now so fast and so efficient that there may not
be many more seconds to be wrung out of the current system. A
human being can only order so fast, drive so fast, and hand over
his currency or credit card so fast. "They have gotten to a place
where it is probably as fast and accurate as it is going to be,"
says Blair Chauncey, of QSR magazine, adding that this is one of
the reasons her magazine stopped doing the Performance Study after
2009. "We got to the point where they were separated by a few
seconds and everyone's accuracy was above 90 percent. Everyone has
gotten so good."

We are all of us, right now, living in the golden age of
drive-thru. That doesn't mean the industry doesn't want to go
faster. The two most highly touted innovations of the past
decade—side-by-side ordering, where two order stations funnel to
one pickup lane; and call centers, which take orders from a remote
location—have both been tested with varying degrees of success.
While McDonald's rolled out the first side-by-side ordering in
2005, the concept has been limited by the cost and complexity of
retrofitting existing locations with multiple lanes. "The
perception is that you are faster," says John Miologos, a former
corporate vice-president for architecture and design at McDonald's
and currently a consultant with WD Partners. "It speaks to
fairness, so you won't get stuck in a line behind a soccer mom
ordering 14 meals for the team." Still, to make the concept
significantly faster, Miologos believes you also have to add a
second window, one for the transaction and another to pick up the
food. "I could see this gaining traction, but the economics of
this have to be dealt with," says Miologos.

The call center was yesterday's big idea in the QSR space. It was
tempting for companies to imagine the customer pulling up to the
speaker box and placing her order with someone in a country where
the minimum wage is lower than it is in the U.S. Wendy's tried the
idea in Lexington, Ky., with the help of Exit41, an Andover
(Mass.) technology consulting firm that specializes in the QSR
industry. WD Partners' Watson, who was a Wendy's senior
vice-president at the time of the testing, says the economics work
well when you are able to pool five or six stores. "But you are
still depending on kitchen production," he says, "so even if it
looks faster, if you don't ramp up kitchen production you don't
improve sales."

This year, Pollo Tropical and Taco Cabana, fast casual restaurants
with 275 locations, will be testing a platform that allows
customers to order via the web. If this works, Chief Marketing
Officer Jason Abelkop believes the brands can explore expanding
into more crowded retail spaces, i.e., those without surrounding
parking lots, which would change the business completely. "Look,
the drive-thru exists in and of itself not because people
intrinsically love the drive-thru experience, but because they
love the convenience of it," says Abelkop. "In some ways, this
exceeds that."

At the drive-thru window in Tustin, I would have shaken off the
headset many orders ago had it not been for manager Mihal's
support, but I'm hanging in there. After a while, I do begin to
detect a pleasing, steady rhythm to the system, the transaction,
the delivery of the food. Each is a discrete, predictable,
scripted interaction. When the order is input correctly, the
customer drives up to the window, the money is paid, the Frutista
Freeze or Atomic Bacon Bombers (a test item specific to this Taco
Bell) handed over, and you send people on their way with a smile
and a "Thank you for coming to Taco Bell," you feel a moment of
accomplishment. And so does Harkins, for it has all gone exactly
as he has planned.

Then a ding in my headset.

"Um, hello?"

Idiot, I think to myself, I've blown the script again.

Greenfeld is a Bloomberg Businessweek contributor.

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