Taco Bell and the Golden Age of Drive-Thru

In, what is ostensibly, an article about efficiency in the fast food industry, comes a thread of information that made me sit up a take notice. Lost amongst the anecdotes of the history of Taco Bell, and how the Drive-Thru has converted restaurants into little factories, BusinessWeek seems to stumble upon a theme that sums up the food industry quite nicely. I’m taking these quotes here out of order presented in the article.

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.”

As much as we talk about food in regard to Fast Food Restaurants, what they really sell, what they really thrive at is process. The quality of the food is secondary. The priority of these places is to squeeze as much profit out of every minute of being open as they possibly can. The food? All the food has to do is meet some minimum threshold of acceptability of the marketplace.

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

Emphasis is my own. the “90 percent” statistic marker sounds impressive, but the fact is that there’s a huge chasm between 90% and 95% efficiency. 90% means that one out of every ten orders are processed incorrectly. At 95%, that translates into one out of every twenty orders is incorrect. My inference here is that, as good as the process may be, one out of every ten to fifteen orders still ends up being incorrect. As any manufacturing manager will tell you, a five to ten percent error rate is massively inefficient, not the golden pinnacle of fast food production that the article wishes to instill upon the industry. But to them, as this is the golden age of the Drive-Thru, this is likely as good as it’s going to get.

Except one thing. There is one variable that they haven’t addressed that could increase their order accuracy – Labor.

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.

$8.50 an hour translates into an annual salary of $17,680 per year, if they work 40 hours a week, every week of the year. This, as anyone in the fast food industry will tell you, is unlikely to happen. Additionally, the health and retirement benefits are either a pittance, or non-existent, depending upon which company or franchisee you work for, and your job title. For a point of reference, in 2011 the Department of Health and Human Services has set the poverty level for a family of three living in the contiguous United States at $18,530 per year.

If the industry wanted to see their accuracy improve, make the job have some value. There are enough studies out there that show that they better they pay, on average, the better performance of the workers. If the companies were to make the job worth going to, then quality workers should follow.

For an industry whose entire modus operandi is based on the premise of squeezing every penny of profit they can out of each establishment, an idea such as “paying a living wage” is problematic. As such, if this article is to be believed, the golden age of the drive thru, where one out of every ten or so orders is incorrectly fufilled, is as good as it’s going to get.