Monday, September 17, 2012

Starbucks - Brewing coffee the lean way

Lean techniques are intended to reduce time to deliver products to the customer, decrease costs, reduce waste while ensuring that the value and customer experience is not compromised. Restaurants are challenged to deliver hot and fresh food to customers, reduce wastes, manage costs by controlling the purchase of raw material, etc. For example, Subway implements lean techniques to produce the perfect sandwich for customers based on their requirements. They do this by ensuring that all the bread is kept ready to go in a baking case, vegetables are cut beforehand, the dressings are kept together towards the end of the line near the cashier, thus ensuring sandwiches are made in a fast, efficient manner. The value proposition Subway offers to customers is fast and fresh sandwiches based on customers needs, thus perfecting lean in the fast food chain.

In this post, I have decided to explore the lean techniques that Starbucks is trying to implement. Wall Street Journal covered an article on the same topic in 2009[1]. The challenges for Starbucks with handling lean are different from that of a fast food chain. Lean processes are known to make process robotic in nature. However, getting coffee at Starbucks is an experience that needs to be handled with care. Starbucks employees are encouraged to engage in conversations with customers while taking their order, while at the same time ensuring that customers don't have to wait in lines for very long. The idea was to increase the number of drinks each Starbucks employees can make in an efficient manner, thus reducing the number of store employees leading to cost savings for the company. The article highlights how 24% of the annual revenue for the company is in store labor and there was room for improvement to lower that number. Scott Hayden, the VP of lean thinking said "Motion and work are two different things. Thirty percent of the partners' time is motion; the walking, reaching, bending". The following techniques were employed at a Starbucks location resulting in the reducing the time to make coffee from more than a minute to 16 seconds. 

1. Moving items closer reduced the movements behind the counter
2. Altering the order of assembly of the coffee also helped.
3. Commonly used syrups were stacked away in an easily reachable location
4. Whipped cream, chocolate, caramel drizzle where moved closer to the delivery area since it was the last step before serving up the coffee

Starbucks apparently offers over 80,000 different combinations of drinks[2]. I would think it is impossible to remember every unique combination for the Starbucks employee while making multiple drinks at the same time. Starbucks, however, has a universal code to keep track of the drink specifications. The coffee cups are designed in such a way that allows the cashier to understand and communicate every minute detail of your drink to the Starbucks employee preparing your coffee. As highlighted in the picture below, acronyms help Starbucks employees prepare the right drink and even announce the kind of drink while serving it up to the customer. This helps in making the customer feel special because Starbucks has not only managed to concoct your favorite drink, but is also able to repeat your highly customized order. This is a significant process improvement as opposed to writing down orders in a paper and having to check back regularly to ensure it is the right combination being asked for.

The next time you walk into a Starbucks, be mindful of the process being followed by the employees to prepare your coffee. The value proposition of Starbucks is to ensure that customers get their order in a timely manner while being polite and serving up a hot cup of coffee as and when they ask for it. Take some time to think about how Starbucks can further improve its process.

[1]: Latest Starbucks Buzzword: 'Lean' Japanese Techniques.
[2]: Starbucks Stays Mum on Drink Math 

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