All posts by brisbanyong

Starbucks and Lean Management

Starbucks – Brewing coffee the lean way

 

Lean techniques are intended to reduce time to deliver products to the customer, decrease costs, reduce waste while ensuring that the value and customer experience is not compromised. Restaurants are challenged to deliver hot and fresh food to customers, reduce wastes, manage costs by controlling the purchase of raw material, etc. For example, Subway implements lean techniques to produce the perfect sandwich for customers based on their requirements. They do this by ensuring that all the bread is kept ready to go in a baking case, vegetables are cut beforehand, the dressings are kept together towards the end of the line near the cashier, thus ensuring sandwiches are made in a fast, efficient manner. The value proposition Subway offers to customers is fast and fresh sandwiches based on customers needs, thus perfecting lean in the fast food chain.

 

The challenges for Starbucks with handling lean are different from that of a fast food chain. Lean processes are known to make process robotic in nature. However, getting coffee at Starbucks is an experience that needs to be handled with care. Starbucks employees are encouraged to engage in conversations with customers while taking their order, while at the same time ensuring that customers don’t have to wait in lines for very long. The idea was to increase the number of drinks each Starbucks employees can make in an efficient manner, thus reducing the number of store employees leading to cost savings for the company. Approximately 24% of the annual revenue for the company is in store labor and there was room for improvement to lower that number. Scott Hayden, the VP of lean thinking said “Motion and work are two different things. Thirty percent of the partners’ time is motion; the walking, reaching, bending”. The following techniques were employed at a Starbucks location resulting in the reducing the time to make coffee from more than a minute to 16 seconds. 

 

1. Moving items closer reduced the movements behind the counter

2. Altering the order of assembly of the coffee also helped.

3. Commonly used syrups were stacked away in an easily reachable location

4. Whipped cream, chocolate, caramel drizzle where moved closer to the delivery area since it was the last step before serving up the coffee

 

Starbucks apparently offers over 80,000 different combinations of drinks. I would think it is impossible to remember every unique combination for the Starbucks employee while making multiple drinks at the same time. Starbucks, however, has a universal code to keep track of the drink specifications. The coffee cups are designed in such a way that allows the cashier to understand and communicate every minute detail of your drink to the Starbucks employee preparing your coffee. 

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Acronyms help Starbucks employees prepare the right drink and even announce the kind of drink while serving it up to the customer. This helps in making the customer feel special because Starbucks has not only managed to concoct your favorite drink, but is also able to repeat your highly customized order. This is a significant process improvement as opposed to writing down orders in a paper and having to check back regularly to ensure it is the right combination being asked for.

A trip to the Amazon rainforest

Hello Guys, I have always been curious about the Amazon way of doing business so I thought this might be interesting sharing. Lets start from the name Amazon,why that name? Apparently, Bezos the owner and founder of Amazon, wanted a name for his company that began with “A” so that it would appear early in alphabetic order. He began looking through the dictionary and settled on “Amazon” because it was a place that was “exotic and different” just as he planned for his store to be, and he believed it was the biggest river in the world, and he planned to make his store the biggest in the world

Amazon claims to be customer centric meaning, they start from the customer and then work backwards , in other words they spend much money on things or items customers really like and lastly they are innovative in their Supply networks where they constantly bring in new technology to assist their supply chain network. This diagram clearly shows what happens, behind the scenes,  each time you click the button on your computer at home

I always say, behind every success there´s a story, it seems that the customer centric nature  partially depends  on some many other companies, not only the largeness and corporate image counts. Companies like , Zappos , buy.vip, lexcycle and many others.

The replenishment strategy of Amazon reflects mostly with understanding preference than have more variety of goods and than lower cost. Counting on different wholesale suppliers makes it possible to create the exotic Amazon for the users

I hope this video from the abc News really helps you to understand what is cooking behind the scenes

How Logistics affects you

Hey Everybody I just want to share with you the way logistics affects us all both directly and indirectly

The US alone  is comprised of 566 railroads.

The approximate number of truck drivers moving America s  freight is 3.5 million,  which from a different perspective,1 in every 15 people working in the US is employed in the trucking industry.

Only in 2011 the transportation and warehousing sector totaled 4.292 million people.

Trucking is the dominate mode of transportation for the nation´s freight movement by approximamtely 71 %.The highest-valued imported prodcts in the U.S include : agricultural products 4.9%, industrial supplies 32.9 %, capital goods 30.4%( computers, telecommunications equipment, motor vehicle parts, office machines), consumer goods 31.8% (automobiles, clothing, medicines, furniture)

There are a total of 149 ports located in the U.S.                                                    American businesses transported over 19 billion tons of raw materials and finished goods in 2002, valued at 13 trillion dollars

All these facts mentioned above are quite astonishing. So,would you like to be part of it?

Unable to replicate DNA

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Toyota´s Philosophy has always been: customer first and Quality first ever since its founding. It is known as the guru of Total Quality Management based on the unchanging principles.

To enhance the quality of life of people everywhere to eventually provide products and services to  meet the customers needs worldwide the corporate  highly engages itself in Research and Development to accurately identify the needs and provide high quality, low costs products. As shown in the following graph, the company invests  time and huge sum of  money to find out what exactly their market needs

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Money spent in R & D

 

The company goes further to improve quality of product and work quality by listening to the customer as well. According to the companys web page, the entire organisation strives to ensure enhanced satisfaction by delivering the voice of the customer to the relevant departments and utilizing it to improve quality

ImageCustomer´s Voice

 

Despite all this well skilled steps to follow. How did Toyota engineered its downfall? why wasnt it able to replicate its DNA, what damaged its brand significantly?

In 2008 the company doubled it sales, apparently this turned out to be a nightmare instead of a victory for the firm because they had to hire many new employees and suppliers which eventually led to a production system failure because it wasn’t able to scale up and provide adequate training to the many new employees and suppliers that were added( I strongly doubt if the price and quality would be thesame if the entire managment process was overturned here). The company´s DNA was unable to replicate

Secondly, The Toyotas quality image got damaged when they started having problems with brake systems and runaway vehicles. Some think if the senior managers had dealt openly with their problems upfront would have saved Toyota substantial monies and lessed public outrage(Are we still talking about the customer is first here?)

 

Docks and Safety at the Warehouse

Hello everybody, I am not quite sure you are familiar with the docks and safety system carried out at the warehouses to make sure  goods from suppliers are stored properly. Before I begin, did you know that, A FedEx agent died after he got pinned between a truck and a loading dock? Another shocking story, A man was crushed  after assisting or engaging a truck coming to the loading bay. Eye witneses say, he was caught in the middle between the truck and the loading bay walls or doors.

In distribution centers and warehouses the loading docks are the primary location of movement of product coming into and moving out , these docks could either be exterior or fully enclosed which typically provide direct Access to storage rooms and freight elevators. The most common hazards which occur are:

Forklifts overturning

Employees being hit by forklifts and other powered trucks

Slips, trips and falls

Trailer creep

Unsecured loads

Debris on floor

Chemical Splash

Taking into account the above, some strict measures are to be carried out to avoid these fatal accident.

  • Shippers often bundle or crate items with strapping(Use safety goggles and leather gloves)
  • Chemical exposure or leaking chemicals(Use the recommended PPE:Goggles and face masks including the right filter cartridges,Heat- and chemical- resistant gauntlet-style safety gloves,Heat and chemical-resistant full aprons)
  • Dock Levellers and portable dock plates, this might happen when a lift truck may hit the dock leveler or its frame if the operator does not point the forks up while driving into the trailer(Make sure that your lift truck is checked for hydraulic drift, which can cause forks to point down unexpectedly)
  • Poor delivery weather conditions,If a truck is parked on a slope outside the building, ice from the roof may slide back towards the bay door and hit a worker on the dock or cause the dock to become slippery(Ask your employer for equipment such as shovels, salt or sand, and flashlights)
  • Lifting below the knees and above the shoulders (Avoid lifting , bending or reaching overhead.use specialized equipment for heavy loads)

 

I find this link very useful: https://www.youtube.com/watch?v=eTwwb31RyHY