By October 14, 2010 9 Comments Read More →

The Article I *Wish* I Had Read about Starbucks in Yesterday’s WSJ

belle & sebastian:wandering alone

For a more traditional approach to this topic, check out this alternative post, “Real Lean at Starbucks or Tayloristic Industrial Engineering?“.

Below is the more creative approach to addressing yesterday’s WSJ article about Lean at Starbucks. Read the WSJ article first: “At Starbucks, Baristas Told No More Than Two Drinks” and the read below for what I wish had been printed…

My fake imagined article:

Starbucks Corp Baristas Improving Their Own Work with “Lean” Methods; Better Quality with Shorter Lines

Amid news reports that the Seattle-based coffee chain headquarters is telling baristas exactly how to do their work in an inflexible way that makes lines stretch out the door, Starbucks baristas are actually fully engaged in improving their own espresso-making artistry. Front-line employees are making their workplace less of an old-fashioned overly-mechanized General Motors “assembly line” and more of a personalized “customer satisfaction factory,” where everybody’s input is respected, according to company documents and store visits imagined recently by the Lean Blog.

Rather than being told in a top-down way to always steam milk for just a single drink or always having to steam an entire pitcher’s worth to be used for several beverages because it’s “more efficient,” baristas are given the flexibility to adjust their own process during the day to best satisfy customer demand, improving flow and reducing lines in the stores. While some practices are “non-negotiable” for quality or customer safety, including rinsing pitchers after each use and washing hands after using the restroom, store “partners,” as they are called, are given increasing freedom to design and improve most elements of their own work in their own individual stores. New employees are trained on the current methods used at the store, but are expected, as part of their employment, to contribute ideas for “kaizen,” or continuous improvement of the store.

Under the “lean” management system, baristas like Hazel Nutt-Latte have learned “sometimes, like when it’s busy, it makes more sense to steam milk for two drinks at once because it’s busy and we will use the milk immediately.” At other times of the day, the baristas only steam enough milk for one drink so that it does not get lukewarm or cold. “We do what’s right for the customers and our educated and motivated baristas now have that flexibility,” said the store manager, Na Tinkontrolanymore, adding “this new lean approach works wonderfully, although some managers liked the old management model where “they could be a dictator if they wanted to.”

Starbucks says the new work methods —which it expects to roll out nationwide and across Canada by next month—are part of its ongoing effort to make stores operate more efficiently. But some baristas worry the changes will take too long to benefit all customers.

The new methods have “doubled the amount of time it takes to improve because you have to learn all of these new Lean ideas and work on it yourself,” according to Carl Melacchiato, a Starbucks barista in Bloomington, Minn., who says his store began improving their process under the new guidelines last week. “Maybe we should just publish a manual that tells each store exactly how to do things,” says Mr. Melachhiato, who is a member of the IWW Starbucks Workers Union.

Ima Teadrinker, a barista in Omaha, Neb., who is also a member of the union, worries that partners at other stores won’t have the pride and satisfaction of figuring out, on their own with the company’s lean training, how she is able up with volume completing only one drink at a time. “While I’m blending a frappuccino, it doesn’t make sense to stand there and wait for the blender to finish running, because I could be making an iced tea at the same time,” she says. Teadrinker emphasizes that she might not have accepted the new process if she hadn’t developed it alongside her team members. Wall Street analysts have expressed concern that Starbucks is increasing profits more slowly than shareholders would like they should “just force everybody at every store to do it the best way — NOW,” said

“As with any new behavior, it will take time for baristas to become comfortable with the new method of improving their own work and for managers to become comfortable in letting their store partners initiate and drive these changes,” said Starbucks spokeswoman Notah Leenzellot.

Starbucks insists the new partner-based improvement methods will eventually hasten the way drinks are made and lead to fresher, hotter drinks. One barista’s idea of steaming milk for individual drinks, for example, “ensures the quality of the beverage in taste, temperature and appearance,” the company documents state, but work methods must be flexible and baristas are challenged to find creative ways of maintain both quality and flow, without letting one or the other suffer.

Customers have indicated that the quality of espresso drinks at a regular Starbucks is “average” and that the beverages are inconsistently prepared from barista to barista and from store to store, the documents say. In the stores where the “lean” method is used, customers rate both the drinks and customer service to be much higher. “My morning triple grande double-foam light-whip half-caff soy pumpkin spice latte always tastes the same now and the lines are much shorter,” says frequent customer Sue Perhiper, pointing out that the baristas aren’t running around as much, giving them more time to smile and chat about the weather.

Over the last few years, Starbucks has been applying to the coffee counter the kind of “lean” manufacturing techniques manufacturers and, recently hospitals, have used as a way to focus on the customer, improve quality, eliminate wasteful activity and reduce delays without stressing out employees. The company has deployed a “lean team” to teach its baristas how to study their own work and to rapidly test process changes in order to shave seconds off each order.

Those baristas who were taught the lean methods discovered that their store kept beans below the counter, leading baristas to waste time bending over to scoop beans, so those stores ended up storing the beans in bins on the top of the counter. This method was shared with baristas through an unofficial blog called “Starbucks Kaizen” where baristas compare notes and act as cheerleaders for the improvements made by others. To boost the freshness of the coffee and to bring back some of the “theater” that had been lost, the baristas also decided to start grinding beans for each batch of coffee, instead of grinding the day’s beans in the morning.

The company has made numerous changes to its business amid the economic downturn, including closing underperforming stores, trimming its number of bakery suppliers, boosting the perks of its loyalty-card program and introducing new varieties of its Via instant coffee. The lean process and customer-improvement paid off in the company’s last quarter.

Earnings at Starbucks rose 37% while revenue for the quarter ended June 27 increased to $2.61 billion from $2.4 billion in the year-earlier period. Sales at U.S. stores open at least a year rose 9% in the quarter thanks to more customer visits and higher average spending.

At the same time that Starbucks has been on the upswing, it has been grappling with rising costs for raw coffee beans. The company recently said it would use lean improvement methods to reduce other operating costs so they could avoid raising prices on more complex drinks in response. “We have learned that prices are set by the market and our customers define value, so we can no longer just raise prices to keep our customary profit margin when costs increase,” said Leenzellot.

Write to Mark Graban at mark@leanblog.org

Don’t you wish that was the article? Again, for my more straightforward post on this, click here.

Creative Commons License photo credit:  visualpanic


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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9 Comments on "The Article I *Wish* I Had Read about Starbucks in Yesterday’s WSJ"

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  1. Holly Simmons says:

    Thanks Mark! What a great way to start my morning, I’ve had a good laugh reading the WSJ article, then yours. Loved how you turned the WSJ article around to reflect true lean thinking. Love it.

  2. Brian Buck
    Twitter:
    says:

    Mark – I like your article better.

    I worry that SBUX’s “Lean Team” needs a deeper understanding of Lean if WSJ is true with this line:

    “When asked whether changes have created longer lines in the test markets, Starbucks spokeswoman Ms. Smith said she didn’t have “that level of detail.”

    I hope their “Lean Team” knows that use of PDCA would inspire them to check the data regarding customer wait during the trial. Especially before a nationwide “spread”. Furthermore, if they engaged the stakeholders, they would know how important this data would be from a change management perspective since it that seems to be the biggest concern bubbling up.

    Maybe they were so focused on imroving the quality that they did not consider looking at the whole customer experience.

    (It is possible WSJ got something wrong as they often do with Lean!)

    I do give them some grace because they are pretty early in their Lean journey and are still learning. I hope they learn from this because “management by edict doesn’t work.”

  3. Nice story Mark. I am smiling from ear to ear so this is a great start to my day (remember, we are 4 hours earlier than Eastern time). Keep preaching the gospel of Lean and we will make a difference.

  4. Mark Graban
    Twitter:
    says:

    Interesting comments from Starbucks employees, many pro and many con, over on the Starbucks Gossip blog.

    Many baristas say the new system works better, once you get used to it. Many say that the system should allow room for judgment and flexibility (I’d agree with that). Many criticize Julie Jargon for a poorly researched, crappy article.

  5. Got to say I wish it was more like that, with each store getting more autonomy and worker self-management being common. I probably wouldn’t have joined the union if it was, but the company is rapidly heading towards a very bad place where store operations are micromanaged by people who don’t work on the shop floor, and has been heading down that path for a while.

  6. john crossan says:

    Great article.
    WSJ and American business in general, still seems to really buy into enforcing the one right way developed by the really smart people.
    I’m sure a one day kaizen in every store facilitated by someone who could help the group with some Industrial engineering lean concepts would have got everyone to pretty much the same starting place, and they would have owned it, and the going forward, open ended improvements.

  7. Ryan says:

    Just thought I’d point out that the Starbucks that are in Taiwan are noticeably more efficient and seem to use more LEAN thinking that the Starbucks I visited on my last trip to the US.

    It was all subtle things, but they added up to make everything easier for the workers, as well as more efficient and thus more pleasant for the customer.

    *Note: Starbucks in TW is managed by an outside firm which also manages all the 7-11’s.

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