commissioner.org
| Source | Louis Proyect |
| Date | 11/05/09/07:28 |
| www.businessweek.com
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 restaurants. 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. |
Copyright (c) 1998, Joongpil Cho