The Secret Behind Starbucks Success

Have you been to Starbucks as well as other coffee resellers? Have you noticed the difference?

Here in Miami there are a number of Starbucks as well as other coffee shops. One of the other one is Panther Coffee. Their coffee is delicious and the atmosphere is relaxed and casual. So why is it less popular than Starbucks? Why aren’t there lines waiting for a cup? The answer is surprisingly simple. Starbuck is simply better organized.

Serving coffee per cup is the ultimate exercise in one piece flow and lean manufacturing. You can not batch, manufacture for stock or create other forms of waste. The key is flow. How long does it take from taking the customers order to the delivery of that order, 100% right, every time? This is where Starbucks excels. They are simply much better organized and therefore much more efficient than any of the other coffee shops around. No question.

So what do we learn from Starbucks? In a manufacturing plant, you can equate an open order to a bucket full of cash that leaks. The quicker you can fulfill an order and ship it, the more money will be in the bucket. If it takes too long, the bucket is empty and you didn’t make any money. Sounds simple? It is, but it takes company wide dedication to implementing a system that allows proper flow of orders. In a manufacturing plant you will often see racks with parts. This can be a big hole in the buckets that leaks cash. You’ll see batches of parts being manufactured so the machine operator doesn’t have to make change overs; another big hole in the bucket. In many plants you’ll see machine operators sit idle as their machine is producing parts; another hole. The list goes on and on. Why doesn’t Starbucks make coffee for inventory? Because it makes no sense! Why would it make sense in a manufacturing plant? With some exceptions, it actually doesn’t! Why batch orders? Does Starbucks do so? No, because it makes no sense. Then why do some manufacturers still do so? The argument of reduced change overs only is acceptable if the changeovers are very complex and involved and the time it takes to change over the tooling is disproportionate to the demand of particular parts. The issue then actually is the change over procedure and my first suggestion would be to closely look at that and optimize it. The target is always one piece flow. It will never pay to make parts for which there are no orders. Inevitably these excess parts cost money in the form of scrapped parts due to obsolescence, scrapped parts due to manufacturing errors, rust, loss, misplacement, etc. The last point is idle people in the plant. This is often caused by poor plant management and organization. It often is a sign of the plant’s culture and the indifference to waste.

Starbucks runs like a well oiled machine. In some locations the time a vehicle pulls up to the drive through window is logged. The clocks starts running and the time is logged from when the customer pulled up to when the customer pays and receives their order. Each employee is thus evaluated. It sounds so simple but watching this system, it is eye opening how much more efficient some operators are than others. This is a great way to establish “best in class” benchmarks within an organization. It is also something Panther should take a look at. The delivery of coffee at Panther easily takes 3X longer than the same order at Starbucks. Is it any wonder people prefer Starbucks?

How are you running your business? Are you like Starbucks or Panther coffee?

With your success in mind,

Michiel Schuitemaker