Reengineering the Corporation - Taco Bell

REENGINEERING THE CORPORATION - TACO BELL

Reengineering focuses on rethinking work from the ground up. Eliminating work that is not necessary and finding a better, more effective way to do business. It's about creating value for the costumer at a lower cost and a higher quality. It's a radical redesign of a business process and related operations to achieve dramatic improvements in performance.

BMW needed to consider a radical change of their business process and needed more aggressive improvements because the company was in trouble. The company was behind to their competitors in the Development Cycle Product. BMW didn't have any choice but to increase their productivity. They launched a new car every 7-8 years, which was a really long process. Costumers were demanding more choices while wanting to pay less. They needed to improve customer satisfaction and quality, as well as speed up their development cycle and decrease their operating costs to be able to compete in the market. To reach the companies objectives, BMW decided to change radically and redesign their business process.

To compare the reengineering process to the one in BMW I chose the fast food restaurant TACO BELL. In 1983 Taco Bell was in a similar situation that BMW was in. They were going backwards fast. A big reason was because the company's operating costs were too high. It dedicated 70% of its floor space to kitchen and only 30% to the customer area. The company was very inefficient because it took such a long time to cook and prepare the food.

Both companies decided for reengineering because they needed to reduce the costs dramatically. They wanted to reinvent the basic rules of the business. Taco Bell needed to reduce the amount of time for making the food and BMW needed to speed up its Development Cycle Product. The main objective of both companies were to guarantee customer satisfaction and focus on what they really wanted. Other objectives of the companies were to improve the employee quality of life and to change the management system. They needed to set a process of logically related tasks to achieve a defined business outcome.

Thousands of companies are driven by a vision of making customer needs the central point of reference. The key is to find ways of making the vision realistic and actionable. Taco Bell needed to be more focused on what customers really wanted. So they took action to achieve automating, changing the organizational structure and management system, reduce the kitchen space and increase customer space. What customers really wanted was good fast food in a clean environment at an affordable price. Taco Bell wanted to meet customer's expectations through the transformation. They launched the project K-MINUS to take the kitchen out of the restaurant. The company was cooking all the food outside the restaurant so that the food only needed to be heated at the restaurant when served. One of the main benefits was eliminating 15 hours of work per day for the associates in the restaurants. It enabled Taco Bell to save $7 million dollars a year and this savings results in the improved quality, morale, decreased injuries and increased focus on the costumers. After the transformation the average Taco Bell restaurant