Can Starbucks employ lean manufacturing techniques used by fast-food rivals without becoming a fast-food joint itself?
That question was raised by a Wall Street Journal story highlighting how Starbucks is trying to deploy “lean thinking.” In a nutshell, Starbucks has a lean team that times baristas and teaches them aspects of Toyota’s production system. There are even Mr. Potato Head assembly drills.
The conundrum: Lean techniques are great for manufacturing, but not non-repeatable human tasks. What business is Starbucks in? You’d have to argue both. Starbucks workers manufacture coffee and tea drinks, but really sell a vibe. Needless to say, this movement, which could ruffle a few old school baristas, has its risks. It has helped the bottom line though.
Starbucks reported a solid third quarter. On the company’s earnings conference call, Starbucks CEO Howard Schultz said:
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 principals.
We’ve been seeing encouraging results over the past couple of quarters, not just improving efficiency and reducing costs but most importantly we are improving customer engagement.
Even as we make considerable progress in improving our bottom line, we remain as focused as ever on initiatives that will remind our customers what sets Starbucks apart. We are doing this through immediate traffic driving strategies and enhanced customer experience, and longer term brand-building.
Indeed, the Journal story focuses on how Starbucks has moved ingredients around to save an extra few seconds here and there. Rivals such as Dunkin Donuts already deploy such techniques. Manufacturing and Business Technology highlighted Starbucks’ lean manufacturing experiments in March.
If Starbucks can become more productive and free folks up to chat with customers then the idea is smart. If Starbucks just becomes another fast food joint perhaps it isn’t such a bright idea. Overall, Starbucks has to adapt and lean manufacturing can help. Thus far, the company’s menu, manufacturing and service tweaks appear to be on the right path.
Also see all BNet resources on lean manufacturing.
Here’s a look at Starbucks most recent results:
