October 7, 2015

Starbuck - skip the line app.

As reported in the Financial Post, Starbucks in Canada is rolling out an app that will allow customers to pre-order and pay for their drink before they even step in the store.  The idea is that customers can "skip the line" or in Canadian speak "skip the lineup" by just putting their order in on their smartphone.

This seems like a great idea to allow customers to perceive that they have more control of their wait, but I wonder if all the operational implications have been considered before this is being rolled out:

  • First, customers may not have to wait in a physical queue, but whenever the order frequency exceeds the processing time there will be a queue.  This may just be shifting the queue from a physical queue to a virtual queue.  Humans tend to think that the reason the queue is going so slow is that there are a lot of people in it - that is not quite true, pushing the people in front of you to go faster rarely speeds things up.   The reason a queue is slow is because the processing time is slower than the arrival rate.   This app does nothing to speed up the processing time, but just shifts the arrival times a bit.  In short, the queue is still there and customers might have to wait just as long.  However, the wait could happen before the show up, so that would improve things.
  • I haven't seen the app myself yet, but to add to the perception of control, the designers could put an expected time the drink will be complete.  This will give an added level of control for the customers if they know that if they order now it will take 10 minutes - they can keep shopping or working or what-ever.
  • What is keeping a person who is actually in the physical line from ordering while in line and essential "line hopping" everyone in front of them?  There will may be a fall-out in perceived fairness if the person behind you in the line suddenly gets called up to pick up their drink.  Will this become an "elitist" app that will lead customers that don't have it it to permanently balk?
  • From my last post, we learned that research says if a person orders something from a non-human they will be less weary of making complex orders.  If this is the case, what are the operational implications of making orders that are more complex?  What does this do to the physical queue wait?  What does this do to the processing time  (it lengthens it, so it makes wait times longer)?  On the flip side, what does it do to the revenue if more complex orders are placed more often?  What are the inventory implications?
  •  What impact might a pre-ordered drink have on quality?  What if a drink is ordered and the virtual queue is short and the drink is made fast, but the customer takes her time to pick it up?  What if the drink is cold (when it supposed to be hot) when the customer arrives?  Will Starbucks make a new drink?
  • What priority does the "production line" place on this new stream of orders compared to the physical queue?  Who comes first?  It reminds me of going to a customer service desk at a big box store, waiting in a long line, walk up to the rep when suddenly her phone rings and she gives you the finger to wait while she takes the more important phone call.    
What other operations questions would an app roll-out like this bring to your mind?

October 1, 2015

Self-service choice: paralysis or freedom

The Canadian newspaper The Globe and Mail reported today about a new self-service kiosk that McDonald' of Canada is rolling out that purportedly is targeted towards higher-end customers who want a customized burger.  The idea is that a customer can make their own burger and each additional topping will add to the cost.    They report

The efforts are bound to stir a buzz but the added touches also come with a price. Mr. Betts digitally ordered a $9.26 Angus True Blue & Guac (blue cheese and guacamole) burger with fries and iced coffee (with an extra espresso shot) for a total of $12.46. The custom burger prices at the kiosks are more than 15 per cent higher than those of a regular Big Mac. A burger conceivably can cost as much as $50, depending on the extras.

I have a few thoughts about this idea:

1:  Added choice could lead to choice paralysis - research has shown that too many choices has led customers to balk.  While added choice leads to a sense of control - too much choice leads to out-of-control feeling.

 2: Perhaps choice paralysis not a big issue considering improved kiosk interfaces that lay out choices in a way that make them more "digestible"....

3.  The article quotes a researcher from University of Toronto that has done research to show that in self-service scenarios, customers are more likely to add more toppings.  They claim that potential embarrassment coming from the social-stigma that might come from a server's look when a customer says "give me one of everything" is not there in self-service concepts.  Customers are not afraid to order it all if they don't have to talk to a human to do it.

So, maybe the solution to choice overload is to put it on a nice user interface and let customers choose without the pressure of a human looking down at them.

Interesting stuff....,  leads me to a couple other thoughts:

4.  What if customers make a hamburger that they don't like?  What if they put everything on it and it is gross?  My son does this regularly.  He gets excited about a hamburger that we cook at home on the BBQ and proceeds to put everything in the fridge on the bun - last week he put potato salad on his burger.  he admitted that it was a mistake.  What happens if the product that a customer "customized" is a bad one?  Who gets the blame?  How do you recover from it?  How can you keep it from happening?  Can you put smart logic into the kiosk that tells that customers that the combination of topping might make them sick?

5.   My final issue with this idea is that fundamentally the operations and McDonald's doesn't likely have the capability of making a $50 hamburger.  They hire minimum wage workers to cook in a mini-factory.  They don't cook chefs who know how to prepare a $50 hamburger.

I like the idea of innovation in choice structure and thinking about how to avoid paralysis through technology is an interesting thought.

April 3, 2012

Healthcare: One size fits all?

The WSJ recently posted an article claiming that the government's attempt at finding "best practices" in healthcare in order to inform doctors and insurance companies about how best to manage healthcare (and its costs) might be inappropriate and contrary to what patients want. The gist of argument is that patients want different levels of treatments and a one size fits all is not the answer.

From a purely operation management lens, reducing the number of processes improves efficiencies and reduces costs. However, since healthcare is a service, we must consider what patients actually want.

March 22, 2012

Demand Management via Twitter - Social Media Soup Nazi

the Wall Street Journal reported on an practice that I had not thought about, but that might prove interesting:

"The morning after two groups of diners didn't show up at the restaurant Noma in Copenhagen last month, chef and co-owner René Redzepi took to Twitter. "And now a message from the Noma staff: to the people of two different no-show tables last night," he wrote, and sent a picture of staff members showing their middle fingers."

"Fickle diners are every restaurant's worst nightmare. A select group of high-end chefs and restaurants are fighting back—from charging people who don't cancel in time to using Twitter and other social media to call out no-shows."

The use of online shame to make customers who balk from their reservations is something I had not thought of before reading this article.  I'm not convinced it's a great idea, but it is an interesting way of using social media to impact the operations of a service.  In effect, using social media to call out customers who are misusing your service could be used a social cues as to what is appropriate at behavior for your business.  However, too much of it and your social media feeds will likely just be ignored of worse you will gain a reputation as a soup nazi...


March 2, 2012

Operations Management Role in Service Design: Choreography

Chris Voss,  an operations management professor from the London Business School has published several articles indicating that the role of operations management in service design and delivery is one similar to a choreographer.  This video reminded me of that concept:


February 29, 2012

Noteworthy happenings

The famous Metropolitan Opera has announced that they are going to use a dynamic pricing model for tickets based on demand for better seats.

Airlines introducing cuddle class: innovation in the economy class seating.

Hotel's trying to spin off their restaurants, well at least separate them from the hotel restaurant stigma.

The future: using video game technology in you shopping cart.

February 28, 2012

WSJ: Waiting in Line

Here is a WSJ article on the science of waiting in line.  Its from back in December of last year, but I just saw it today and though I'd like to capture it.  I think the visual from the article does a great job describing several issues around the psychology of waiting:

and to go along with my recent foray into finding old Sesame Street Clips that might have something to do with a service concept, here is a video about a frog who is confused about where he stands in line: