Case 1: Going Lean at Starbucks

Should a cafe, often renowned for a warm and friendly atmosphere, switch to lean production methods to increase the speed at which it serves its products?

It started off as a day basically like any other. You went into the Starbucks that you manage, helped the employees open the store, and thought about making a dent in the mountain of paperwork left over from the previous week. But then, you got an unexpected visit from a team at the corporate office. They started talking about the need to lower labor costs, improve efficiency, and increase productivity. When you asked them how they planned on doing all that, their response was lean production.

They informed you that lean production is a management philosophy derived from Toyota that is focused on reducing waste. Whether its wasted motion, wasted time, or wasted parts, the goal of lean production is to eliminate waste so that all the members of an organization can do their work efficiently. The executives then show you all the waste thats in your stores right nowbaristas bending over to scoop coffee from a counter below, others waiting for coffee to fully drain before starting a new pot, one worker carrying trays of pastries from storage to the display case, another spending ten seconds per drink to read the milk label. They even show you a map showing the winding trail that a barista takes in making a single drink. It looks like a big pile of spaghetti, you think to yourself.

With lean production, the executives explain, you can reduce the amount of motion that employees spend making drinks, and the amount of time they spend reaching for stuff, reading labels, or moving from here to there. This will make your store more efficient and productive, so that the same number of employees can serve more customers.

Youre intrigued by all of this, as nothing would please your supervisors more than increased revenue and lower costs. But youre also worried about how your employees will react. Many of them came to work at Starbucks because it wasnt like other fast-food chains that only focus on speed, speed, and speed. How will they feel once you tell them that theyll have to change the way they work to become faster? What if they feel like you just want them to be coffee-making robots, leaving them no time to interact with customers or experiment with new drinks? Consider these issues with three or four other students as you discuss the questions below.Source: Julie Jargon, Latest Starbucks Buzzword: Lean Japanese Techniques, The Wall Street Journal. 4 August, 2009. Accessed at: http://online.wsj.com/article/SB124933474023402611.html [accessed September 26, 2016].

Questions:

How would an increase in efficiency and production benefit your employees?

How would you address employees concerns that they are being transformed into coffee-making robots?

Do you agree or disagree with the following statement: The most important thing in a restaurant is speed of service. As long as customers get what they ordered quickly, nothing else matters. Why or Why not?

CASE 2: Is Bigger Always Better

When you told your friends and family that you were starting your own business, they were thrilled. When you told them that it would be a food truck, well, they were less than thrilled. All they could imagine was a truck filled with cold sandwiches and watered-down coffee parked next to a construction site. But you used your culinary training to come up with fresh, delicious, and healthy dishes that appealed to almost everyone. And instead of construction sites, you parked your truck next to busy office buildings and downtown intersections. In almost no time at all, there were hundreds of people lined up at your truck, waiting for one of your latest creations.

Ever since you opened, the business has been pretty smalljust one truck, you manning the kitchen in the back, and your best friend taking orders and working the cash register. But all of that could soon change. A few weeks ago, a camera crew and producers from Food Network came by your truck to do a profile on the hottest dining trends in the country. They called your truck adventurous, cutting-edge, and a definite must-eat. A little while after that, you were profiled on TV news and magazines, and youve lost track of the number of food bloggers who have stopped for a taste. And the attention hasnt come just from the media. Investors are calling left and right with offers to help you expand your business. They want to help you buy more trucks, hire more people, and increase your productivity so that you can sell food in more cities across the country. Some have even called you with offers of opening up a chain of restaurants.

This seems like a dream come true, taking a small business and growing it into a nationwide chain. However, your best friend has a warning. He says that growing so fast isnt always the best way to go. He tells you about Jim Picariello, who had a small business making all-natural ice pops. Picariello began making the pops himself, at home, but in just two years, he expanded into a 15-employee company with a 3,000-square-foot facility. But when the recession hit, all of his funding dried up, he couldnt afford to make payments on his manufacturing equipment, and he eventually had to lay off all of his employees and declare bankruptcy. Then he tells you about Toyota. For decades, the company had a sterling reputation for making quality vehicles. But when it made rapid expansion, its overall priority, which was the quality of its cars, suffered, and it was forced to recall 11 million vehicles. Definitely not where you want to be, your best friend concludes.

So what should you do? You dont want to turn down an opportunity to expand your business and make more money. But you also dont want to lose what you have by growing too fast.

Source: Laura Petrecca Fast growth for your small business isnt always good, USA Today, 13 Sept 2010, 1B6B.

Questions:

As the owner and manager of this small business, what pace of growth do you think is idealslow or rapid? Why?

What steps could you take to make sure that the quality of your products and the customer service your employees offer do not suffer with the expansion of your business?