October 15, 2010

Can you get too lean, be too fast?: The Starbucks Experience at risk

Although I am not a coffee drinker (if you are interested -here's why), I found the recent article in the WSJ very interesting.  It is about the direction that Starbucks is taking its processes. A while back Starbucks tried to take ideas from lean manufacturing trying to find ways to shave seconds off their service process.  Here is an example from the article of the things they found:

That team discovered that many stores 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. 
Although So, that sounds great except  that it turned out that baristas seemed to get a bit too efficient at the expense of their core product:
 Amid customer complaints that the Seattle-based coffee chain has reduced the fine art of coffee making to a mechanized process with all the romance of an assembly line, Starbucks baristas are being told to stop making multiple drinks at the same time and focus instead on no more than two drinks at a time—starting a second one while finishing the first, according to company documents reviewed recently by The Wall Street Journal.
 The WSJ article makes it sound like Starbucks is making the changes for the sake of product quality, mainly that by working on too many drinks at a time, drink quality goes down.  This could be the case if each drink may take slightly longer than if it was worked in isolation. It seems baristas don't buy the time saving part, they claim that the new policies will make things slower.  One of my favorite lines in the article:

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."
Hmmm, pretty sure that means either, we didn't think of that (unlikely) or "well, yes, but it will be better for the customer." Will it? 

Quality might also be reduced  in multi-drink-proccessing because each drink has its own process unique from the one before and after making mistakes more likely.  So, the new policies are acting as a sort of mistake proofing, poke-yoke if you will.  This may insult the multitasking capabilities of the baristas, again a tough sale.

So, where does this bring us?  Is it better for a process to be faster with a slightly higher risk of mistakes and un-freshness or should baristas be told to slow down at the sake of longer queues?  This is not an easy question to answer, hence(in my opinion) the more interesting problems that arise in service operations.

My opinion is that Starbucks has seemed to find a paradox: applying operations management principles directly into a service process might impact the customers experience.  If asked what makes service operations management different from manufacturing operations a good answer would be that services involve customers in the process - you have to consider what they do and what they think about what you do.  For traditional manufactured products, customers don't particularly care about how a product is made apart from that it has the features and quality that they expect.

Starbucks barristas seemed to be forgetting that they are in the service business.  If they were making coffee in a bottling plant then efficiency is the best principle, but because customers are in front of them seeing and experiencing (and paying a hefty price for) the process of making their drink they may need to emphasize something different:
To boost the freshness of the coffee and to bring back some of the "theater" that had been lost, the baristas also started grinding beans for each batch of coffee, instead of grinding the day's beans in the morning

Starbucks sells more than the liquid in the cup, it is in the business of the experience of the "fine art of coffee making" (at least it used to), but because of its popularity and high demand it has transformed into a service factory - spitting out drinks as fast as possible.  The danger is that it is losing its hard fought brand promise. 

So, what would you do if you were Starbucks management?  How do you handle the barristas fear that lines will get longer?    Who do you side with - baristas, customers, management?  What are the needs and concerns of each of these groups?  How are these needs and concerns out of balance and how can you align them?  


  1. Great post, Mike! I am a coffee drinker, and spend more than my fair share of mornings at Starbucks, which is bad for my doctoral student budget.

    I understand the argument about reducing processing times impacting product quality, but I think that if subjected to a blind taste test, a Starbucks customer might be indifferent between a Latte produced in 45 seconds, and one produced in 60 seconds. (Not sure of the TPT of a latte.)

    I think the more important point is the one you identify, of the value proposition of Starbucks. It's the experience of production that matters -- perhaps even more so than the experience of the product.

    Speeding up the process and using lean techniques that facilitates making multiple drinks simultaneously makes it harder for a customer to see the work that's being done to craft a custom drink for them. In Starbucks today, a customer places their order, and until they receive their drink, the process is something of a black box...

    Sure, they can see that there's someone toiling with multiple drinks behind a tall, boxy machine... They can see steam and hear milk being frothed, but they can't tell anymore what specifically is being done for them. Customers value operational transparency, and in its absence, they use proxies like service duration to make assumptions about product quality. Actual quality may not have really gone down, but it's equally bad for business if perceptions of quality have gone down.

    What's more though, the experience of production has been jeopardized. When there's no transparency, there's no craft to observe. The value proposition of a customized drink, lovingly prepared, isn't being met. I would bet that if lean didn't mean obscuring the customer's view of what's taking place -- if there was actually transparency in the process -- the increased efficiency would delight customers, baristas and managers alike.

    The relationship between service duration and perceived service value is curvilinear. Customers don't value service that takes an exceedingly long time. They also don't value instantaneous service -- particularly if the customer promise of the production system is one of customization and craft. Reducing throughput time of a long service process will generally improve value perceptions to a point, but eventually, shortening duration will have negative returns. I don't think Starbucks moving from 60 seconds to 45 seconds per customer necessarily would cross the threshold -- especially if the process itself was made more transparent.

    Again, thanks for the terrific post!

  2. Speaking as a former barista who once managed a shop in a local chain that competed with Starbucks, and who single-handedly keeps a couple of cafes in business as a customer, it is misguided to generalize about customer expectations - of waiting time and quality - from Starbucks to the whole of coffeedom.

    First of all, the average Starbucks customer has a different set of expectations about coffee and coffee quality from, say, someone who frequents an 'artisan' cafe, where as a rule you'd expect higher quality and no syrups.

    Built into that is a willingness perhaps to wait a little longer for one's drink, but then again a well-trained barista can turn out an excellent drink fairly quickly, and can get through a long queue of drinks in a a reasonably short time - ie they can work at speeds comparable to those found at Starbucks.

    I suspect that many possibly most regulars at independents or smaller chains that have a stronger focus on quality 'artisan' drinks (eg Peets in California) get a good sense of how long the wait will be as soon as they walk in the door and see how many people and waiting cups are lined up. Once you've ordered and paid, you're committed to waiting the expected time, give or take a few minutes - again, depending on whether there are 2 people ahead of you or 20.

    Ideally, whether you're at Starbucks, Peets, or Caffe Trieste in San Francisco, or Atomica in Melbourne, Australia, you shouldn't wait a moment longer than it takes to make the best drink they're capable of making - and it's the customer's familiarity with the brand that drives their expectations regarding the capability.

    As a customer I'm more interested in consistent quality than wait times, and I find the atmosphere and the people in, say, Atomica help to pass the time more quickly than in a place like Starbucks.

    Starbucks should start with a clear picture of the level of quality they want to consistently provide in their drinks and work from there. If that means longer lines, can't they do what they've always done and open another shop across the street?