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Raissa Carey

Six Sigma

Starbucks’ Lean Ruins the Experience

I want a caffeine rush, not to be in a rush.

Published: Sunday, August 9, 2009 - 15:30

I

f you’ve been to Starbucks lately, you probably noticed the fast-paced employees working their java magic as they take orders from customers in line, not at the register, so that baristas can start the order, and sometimes finish it, before the customer even pays for it.

Yes, I’m all for fast and good service, but lately, the Starbucks Experience hasn’t been good. You see, for me Starbucks is a special treat, it’s the place I go to get away from my two cute boys when I need a 20-minute break from motherhood; it’s the place I go to because it smells like intelligence when I need a shot of creativity during the day.

So I go to Starbucks to enjoy the atmosphere, the great background music, and the coffee paraphernalia, among other things. But when I recently entered Starbucks and stared at its mouthwatering menu, not able to decide which of the mochas, or lattes, or scones I was going to buy, a guy behind the counter asked me in a rush that you usually see in fast-food joints, “Can I get you started with anything ma’am?”

“Uh, ok, I’ll have a tall mocha and… uh, a croissant and… uh, no… ok. Yeah, that’s fine.” My turn at the cashier was up and the mocha was already ready for me on the pick up counter.

That day I left Starbucks bothered, but didn’t know why. 

A couple of days later, I came across Larry Dignan’s piece at SmartPlanet.com, “Starbucks eyes lean manufacturing techniques,” where the author poses the question, “Can Starbucks employ lean manufacturing techniques used by fast-food rivals without becoming a fast-food joint itself?” Fast-food service—that’s how I felt the other day. 

Starbucks started implementing lean manufacturing principles to its processes earlier this year, CEO Howard Schultz said during a press conference on the company’s quarter results. “The majority of cost reductions we’ve achieved come from a new way of operating and serving our customers. Over the quarter, we began to roll out our 'better way' initiatives—a series of process improvements in our stores using lean principles.

"We’ve been seeing encouraging results over the past couple of quarters, not just improving efficiencies and reducing costs but most importantly, we’re improving customer engagement.”

According to its 2009 third-quarter report, the company delivered about $175 million in cost savings, exceeding the company’s target of $150 million, according to the financial report. 

“Our store partners have embraced the cost disciplines and efficiency initiatives that are enabling us to expand our operating margin," Schultz said.  "In doing this, they have also delivered increased service speed, measurably improved customer service, customer satisfaction, and an overall enhanced Starbucks Experience.” 

Starbucks has a “lean team” headed by vice president of lean thinking, Scott Heydon, that goes around the country with a stopwatch and a Mr. Potato Head toy to test store managers if they can put it together and rebox the toy in less than 45 seconds, according to a report by Julie Jargon in The Wall Street Journal

When I tried to contact the company directly to ask about this lean way of doing business, it declined an interview, but a spokesperson issued the following statement: "Starbucks is applying traditional lean concepts in a unique and fresh way to all elements of our business, most notably our stores. Our goal is straightforward—to increase operational efficiencies and ultimately our competitiveness in the marketplace by improving customer and partner (employee) experiences. Through our efforts, we have already seen a positive impact on product quality, freshness, and service time."

“Still, some baristas fear the drive will turn them into coffee-making automatons and take away some of the things that made the chain different,” Jargon’s article says. 

“Yes!” I thought, that’s exactly what they are now—a bunch of coffee-making machines. The company’s third-quarter results exceeded analysts’ expectations, as The Wall Street Journal reported, and that may be seen as a lean success story. In the human perspective, however, lean has transformed what used to be a pleasant experience into an expeditious, efficient, but in the end, unsatisfactory customer experience.

As one reader from the web site StarbucksGossip rightfully puts it, “Customers come into Starbucks—at least they did—to experience something that could only happen without lean—friendly banter with a barista, sampling coffee or a pastry, etc. Lean is best suited to assembly lines and factories, not so for managing human interaction, which is never a repeatable routine.”

Discuss

About The Author

Raissa Carey’s picture

Raissa Carey

Comments

Great article! By the way,

Great article! By the way, speaking of music industry, there was a huge stink at the MTV Awards– probably because Kanye West has lost his mind.

Right....

Yes I'm a caffeine junkie and SBX fills that need well.
Actually, I'm impressed with how Starbucks is working at re-inventing their operations/offerings/company.
Let's be fair ...This is no small operation. We all know that developing any strategy AND implementing it is difficult.
My personal experience as a Starbucks customer has been very positive since these changes have been made.
You quality guys need to get out there and adequately SAMPLE the experience before you critique.

What does the customer want?

The core of TPS to me is the customer - it is intimately linking the customer into what we do. Then removing waste as mentioned in other comments using methodologies developed by other organizations or creating new ones that may fit your unique culture. But non-value added work in a situation like Starbucks is very different than manufacturing. And if the customer and the employees that serve the customer aren’t pulled into the equation up front, it will be another example of Lean completely miss-applied.

My experiences as a customer, I don’t see them honestly asking what does the customer want?? And a diverse group of customers at that – a cookie cutter approach won’t work for them. From the article and my personal observations ordering coffee at Starbucks they aren't looking into what the customer wants and reacting to it. I personally avoid the place as it is pricey, service inconsistent (though I have had a few good experiences) and agree with a German friend of mine – doesn’t serve very good coffee.

Using methodologies to streamline the coffee making at Starbucks is great if I as a customer get something out of it - I haven't seen that. There hasn't been lower prices, free wi-fi, better coffee, or better service. I don't see or feel the atmosphere of a high performing organization using its entire workforce to excel.

Jim Schwarz

VOC

Ms. Carey, well said and good observations. I visit my neighborhood Star Bucks daily. I see confusion, extended paths and reaches. I see inconsistencies in the application of the order-make-pay-deliver process, many time there is confusion and people running into each other. Being sensitive to waste this hurts my experience. If I flow through the line and to my favorite table, I still have a chance to chat w/ my favorites on duty... and be happier all the more. Cheers!

Starbucks Lean

I think a large portion of Starbuck's customers want to be in and out yesterday. Those are probably who this initiative is geared towards. I prefer the coffee house experience made famous in Vienna as apparently does the author so I am sympathetic to the issue. As long as the brew staff don't rush the entire visit hopefully we'll be OK.

Beware jumping to conclusions

There have been a lot of comments online where people have jumped to the following conclusions about Lean at Starbucks. It seems the WSJ only got the story half right (which is what tends to happen with the WSJ and lean).

1) Starbucks isn't ignoring the people side
2) Starbucks isn't turning people into robots
3) Starbucks isn't emphasizing speed over customer experience and quality

Their goal is to free up barista time so they CAN have a pleasant interaction with you and not make a fast food experience.

John Shook, from the LEI, who has worked closely with Starbucks has a blog post about it:

Shook Link

And I blogged about it on my blog:

Graban Link

A lot of what you're seeing - "robotic staff" and people NOT having time to provide good service is exactly what they are getting from NOT being Lean. So I'd suggest the headline of your blog post should be "Lack of Lean Ruins the Starbucks Experience."

Consistancy

Not being a Starbucks devotee, I can not comment on their progress, however, having attended a Lean Training conducted by Starbucks staff, and having been in the high-volume coffee business for several years, I fully appreciate the Starbuck approach to quality, efficiency and respect for staff.  Something that Starbucks pointed out in the training not mentioned in this thread, is that the bravado, techniques or idiosyncracies of the Barista often caused wide inconsistancies in their product; a cappucino in Boston could be a radically different product than a cappucino presented in Tokyo temperature, texture, strength, etc).  Consistency for the customer was a main driver for their implementation of Lean.  Who can fault them on that?

When looking at "respect for the employee", I would consider Panera Bread as the polar opposite of what Starbucks hopes to achieve.  Many Panera stores are fraught with confusion, poor layout, poor workload balance, and workers running to "get", resulting an a carnival-like peformance. I empathise for the worker who is expected to succeed in a disorganized retail setting.  The ultimate customer insult resulting from their processes (or lack thereof) is experienced when, for the simple coffee customer (after the customer is forced to endue this pandmonium), they are handed an empty cup.  Hereinlies the difference in the value proposition between an organization focused on flow, efficiency and consistancy and one focused on ambiance and presentation  alone.

Often in retail, changing a process to solve one problem does impact the customer experience, and some fallout may occur, but it creates additional opportunities.  I don't see Starbucks going the way of JC Penny, however, for those customers who don't like change, there are those who were waiting for it all along.

I guess I need to "go to the Gemba" to see the problems that Lean is causing Starbucks customers.  At least they serve what is expected inside the cup...

"Thank you sir, can I have another..."

Cheers,

Gerry C

 

Hurling Rocks at the Glass House

Let me preface this comment with an acknowledgment that I have never had a cup of coffee in my life, so I have watched the Starbucks phenomenon from afar. It sounds to me like Ms. Carey and her peers have defined the Starbucks' operations based on past experience, that their previous pursuit of overpriced java was just fine when the baristas made them the center of attention while being served. Mind you, this is not a criticism of Starbucks patrons, because the old adage of , "Rule #1: the customer is always right," still holds. Rather, I see this as a good lesson regarding lean principles. Applying the 5S methodology does not mean that "quality" will be achieved. No one can argue with the fact that Starbucks has taken the time (and errors) out of the process. However, they seem to have sucked the "value" out at the same time. I am sure they undertook the "lean journey" to stave off the erosion of their stock price, return to profitability, and ensure their continued existence as a publicly-traded company. The senior leadership would be wise to remember, "quality" is, the "totality of features that completely satisfy the customer requirements"--expressed or implied. If the "huddled masses" are looking for an alternative, Micky D's delivers its liquid caffeine at much less cost, and they clearly mark the cup with the fact that, hot coffee is in fact, hot!

McD Atmosphere

Starbucks is, or was, all about an enjoyable experience. I don't have to pay $5 for a cup of coffee if I want McD atmosphere. I'll just go to a cheaper competitor. Or finds a coffee house that puts relaxation and respite ahead of revenue and run-charts.

I'll have a ...

It's kinda like going in to Starbucks ... a coffee house ... and ordering a tall, skinny, non-fat, decaf cappuccino with a skinny blueberry muffin... It's not what Starbucks is about... IMHO. BTW I recently had a trip to Hong Kong / China and I can honestly say that they have the most helpful, kind, sincere and friendly staff I have experienced in a long time... no offence to my local Starbucks here in the UK - you're fab too!!

Here's What Happens When You Don't Understand Value

This is a classic example of the application of Lean without the understanding of how your market or markets define value. Lean focuses on cutting non-value adding costs (muda). Good so far. Yet too many organizations do not have clear line of sight to the customer and cut those costs that actually add value to the customer experience. The result is a short term gain in profitability but longer term damage to their competitive value proposition and future profitability. Look before you cut!

Starbuck's Lean not so Lean

We would do well to note that one the pillars of Lean is "respect for people," and one of the first, and most important, steps is to define value from the customer's perspective. By not turning to it's front-line employees to understand the root causes of it's financial problems and by substituting "shareholders" for "customers," Starbucks is not so much implementing Lean as it is transforming itself into a McD's competitor.