Tag: Taco Bell

OM in the News: A False Positive on Taylor Farms Lettuce

The U.S. Food and Drug Administration just announced that lettuce from a key supplier linked to the ongoing cyclosporiasis outbreak has not tested positive for the parasite, reversing an earlier finding by the agency.  The FDA previously identified contamination in a sample of lettuce from Taylor Farms de Mexico, but after retesting, said the finding was inaccurate.

“Due to the complexity in detection of Cyclospora, FDA laboratory experts re-reviewed the sample results and have concluded that the finding does not represent true amplification and should be considered a false positive,” the agency said.

Despite the update, Taylor Farms de Mexico, part of the larger Taylor Farms brand, continues to be at the center of the FDA’s investigation into the outbreak after the agency last week linked iceberg lettuce from a single supplier in Mexico to more than 1,600 cases of cyclosporiasis across Indiana, Kentucky, Michigan, Ohio, and West Virginia. That subset of cases in the larger outbreak occurred among people who reported eating at Taco Bell before becoming ill. Taco Bell said it had removed all Taylor Farms lettuce from its U.S. restaurants and supply chain, reports Supply Chain Dive (July 21, 2026). 

Taylor Farms, meanwhile, has voluntarily recalled all iceberg lettuce grown in central Mexico and will no longer source from the region for the remainder of the growing season. The recalled items included private-label shredded lettuce and iceberg salad packs sold at Walmart, but no Taylor Farms-branded products were involved, according to the company.

Classroom discussion questions:

  1. Supplement 6 in your Heizer/Render/Munson text is on the topic of Statistical Process Control. What tools could be used to manage this issue?
  2. What other famous outbreaks have been caused by lettuce?

OM in the News: Taco Bell Uses OM to Know What You Want to Eat at 2 a.m.

Taco Bell is considered the GOAT of new product ideas, testing hundreds to develop viral hits like Doritos Locos Tacos and Baja Blast, writes The Wall Street Journal (Nov.22-23, 2025). Its product development team (see Figure 5.3 in your Heizer/Render/Munson text) systematically generates, tests, and implements new menu items, focusing on limited-time offerings (LTOs) that keep the brand relevant and appealing. And as we point out in Figure 5.1, the higher the percentage of sales from new products, the more successful the firm.

Inside Taco Bell’s test kitchen

Here is how it works at Taco Bell’s New Product Development Team:

  1.  New products are engineered to use ingredients and equipment already available in restaurants, minimizing the need for additional resources and reducing training time for staff. This approach ensures that operational changes are minimal and that new items can be introduced without disrupting established workflows.

2. Using rapid testing, hundreds of concepts are evaluated annually, but only those that meet operational standards and customer demand advance to market testing. This ensures that only efficient, scalable items reach the menu.

3.  Most new items are offered for 4-6 weeks, allowing for frequent menu refreshes without overburdening operations or inventory management. This strategy keeps the menu dynamic and enables the company to respond quickly to changing consumer preferences.

4. LTOs are crafted for quick and consistent assembly, supporting high throughput and maintaining quality across all locations. Operational teams are trained to execute new items efficiently, ensuring that service standards are upheld even during periods of high demand.

5. New menu innovations are developed with profitability in mind, leveraging cost-effective ingredients. This focus supports growth and helps Taco Bell remain competitive in its sector.

6. The company tracks same-store sales and operational metrics, enabling it to identify opportunities for improvement and maintain operational excellence.

7.  The product development team operates in a collaborative environment. Leadership encourages experimentation.

8. Operational decisions are informed by market research and consumer feedback, ensuring that new products align with customer preferences and operational capabilities.

Taco Bell’s operational strategy enables efficient product innovation, rapid deployment, and consistent execution, supporting both profitability and sustained market leadership in the fast-food industry.

Classroom discussion questions:

  1. What items at McDonald’s and Starbucks are LTOs?
  2. Why is Figure 5.1 so important?

OM in the News: AI Will Soon Take Your Order at Taco Bell

operations management blog artificial intelligenceYum Brands, owner of Taco Bell, Pizza Hut, and KFC is partnering with Nvidia to build a range of new AI-driven services in its restaurants. The first—AI-powered voice-ordering at the drive-through lane and on the phone—was built using tools from Nvidia, and will begin rolling out at 500 Yum Brand restaurants this year.

The ultimate goal is to move all orders through digital channels instead of human order-takers, an effort Yum says will boost sales. Yum will also use AI to enhance a number of the company’s internal operations.

Other planned changes include the use of computer vision to spot fumbled orders and AI that filters internet chatter on the restaurants for useful feedback for their managers. “Yum and other quick-service-restaurant chains, like McDonald’s, have been leaning into more digital experiments for efficiency gains and improved customer satisfaction as inflation squeezes low-income diners,” writes The Wall Street Journal (March 19, 2025). 

Voice-ordering has been a priority for Yum for some time as it works to receive 100% of its orders through digital channels rather than through humans. Currently it is above 50% including orders that come through its app or online, up from 19% in 2019. Consumers end up spending more when they buy via digital channels because the restaurant can upsell, personalize and entice eaters through notifications.

Yum is currently evaluating whether existing CCTV cameras can provide images sharp enough for computer vision to determine whether the food received is what was ordered or whether it’s missing any ingredients. “Order accuracy is a big problem that a lot of quick-service restaurant companies face,” says the Chief Technology Officer.

In-restaurant workers won’t disappear. Instead, they will focus more on customer service, for instance, helping people with orders.

Classroom discussion questions:

  1. How else can AI be used in this industry?
  2. What are some disadvantages of depending on AI?

OM in the News: Designing New Products at Taco Bell

Taco Bell's new Waffle Taco
Taco Bell’s new Waffle Taco

Chains such as Chipotle and In-N-Out Burger may rely on a stable menu of popular items, but Taco Bell engineers a constant rotation of products in hopes of not only keeping consumers coming back but also uncovering the Next Big Thing. Explains the firm’s chief marketing officer: “We want to be the leader in food innovation and believe there is no finish line when it comes to being first and staying relevant.” Crafting a breakfast hit, like the new Waffle Taco, is lucrative. In recent years breakfast has been the fastest-growing day part for the industry.

Taco Bell’s innovation team looks at 4,000 to 4,500 ideas every year, of which 300 to 500 are tested with consumers reports BusinessWeek (June 2-9, 2014).  Only about 8 to 10 new products make the Taco Bell menu nationally each year. Including products in testing and all permutations, Taco Bell launches dozens of items each year. This keeps the 40-person innovation team busy and well-fed. “We eat all day long,” says the chief food and beverage innovation officer.

In search of ideas, the product developers mine social media, consider new ingredients, and track rivals. Some Fridays, the team does what they’ve dubbed a “grocery store hustle” to see what’s new in retail. But the basic pillars of anything they develop remain taste, value, and speed. The less a restaurant has to change its kitchen operations, ingredients, or equipment, the better.

The developers come up with a prototype, then start testing it with consumers in the lab and in test restaurants. The typical product goes through about 100 iterations by the time it is launched. The Waffle Taco, for instance, was changed 80 times through various characteristics such as shape, weight, thickness, intensity of vanilla flavor in the shell, and fillings.

Classroom discussion questions:
1. Where does Taco Bell fall in innovation ranking, based on Figure 5.1 (see p. 156)?

2. Which product strategy best describes Taco Bell: differentiation, low-cost, or rapid response (see Chapter 5)?

 

 

Good OM Reading: Taco Bell and the Golden Age of Drive-Thru

If there was one article you could ask your students to read at the beginning of the OM semester, it would be this lead piece in Businessweek (May 9,2011). The theme is that OM innovations at fast food restaurants like Taco Bell rival those at any factory in the world. Written from the view of the drive-thru window (which generates about 70% of fast food sales), the article lets you overview your course with issues of productivity (Ch.1), technology and process design in services (Ch.7), layout (Ch.9), and time & motion studies (Ch.10). The story also comes with a 1-1/2 minute video which the students will enjoy as well.

Here is a quote from the 5-page reading: “Go into the kitchen of a Taco Bell today, and you’ll find a strong counter argument to any notion that the US has lost its manufacturing edge. Every Taco Bell, McDonald’s, Wendy’s, and Burger King is a little factory, with a manager who overseas 3 dozen workers, devices 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”.

 The firm’s  CEO concludes, “At Taco Bell today I’ve got 6,000 factories, many of them running 24 hours a day”.
Adds a former Wendy’s VP for OM, “The most advanced operational thinking in the world is going on in the back” of a fast food restaurant. Wendy’s is rated as the fastest brand (an amazing 134 seconds per drive-thru vehicle), but Taco Bell comes out 1st ranked overall with an average time of 164 seconds and a 93.1% accuracy rate.

This article describes the restaurant layout (the topic of our Global Company Profile in Ch.9), new technologies in the industry, bottlenecks, staffing issues, and much more.  It is a perfect lead-in to the exciting topic we teach.