starbucks project
DESCRIPTION
Operations Management Presentation of StarbucksTRANSCRIPT
STARBUCKSBrian P. Germain & William McDougall
Operations ManagementProfessor Ken Hung
Suffolk UniversitySawyer Business School
of Management
Starbucks Overview International Coffee House that
started in Pike Place Market, Seattle Washington in 1977 – Founder CEO Howard Schultz.
17,000 stores in 50 Countries World Wide.
The average Starbucks customer visits the store 6 times per month while a loyal 20% of customers go to the stores 16 times per month.
Famous for their enthusiastic “Baristas,” “specialty coffees,” and lattes.
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Customers are the heartbeat of most businesses, and have a say in the value of the company, what they’re good at, and how to improve on areas necessary.
Employees provide the atmosphere of the company. Without enthusiastic employees that love their job, the company will not grow financially or culturally.
Who is at Stake?
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Inputs/Outputs
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Customers Beverage OrdersFood Orders
Customer with a finished beverage and a fresh packaged
food item.
The Starbucks we will be examining is the store located in Downtown Crossing in the heart of Downtown Boston
Busiest Times include Monday – Friday8 am – 10 am
At most has 6 Baristas on hand taking the orders, preparing the drinks/food, and working the cashiers.
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Starbucks Location
Starbucks Location Layout
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Enter Exit
Food Bar
Cashier x 3
Beverage Bar
Condiments
Manager
Process Flow Diagram
Beverage Bar/Pickup
Cashier 1
Cashier 2
Store Entrance
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Two-Server System
Customers In The System
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Beverage Bar/Pickup
Cashier 1
Cashier 2
Store Entrance
Inter Arrival Time = 0.7 MinService Time = 1 MinStandard Deviation = 2 MinCVp = 2 MinCVa = 2.857
2 Hour Examination8 AM – 10 AM
Ta = 0.7
Flow Time= 120 Min (2 Hr)
Flow Unit= 345 Ppl
Flow Rate = 2.875 Ppl/Min
Process Flow Diagram Breakdown
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Beverage Bar/Pickup
Cashier 1
Cashier 2
Store Entrance
Min = 65Ppl = 187
Min = 5 Ppl = 13.5
Min = 5Ppl = 13.5
Min = 45Ppl = 131
Utilization = 1/0.7*2 = 72%
Time in Queue= 1 * 0.72 ^ √2*(2+1) – 1 * 2^2 + 2.857^2 = 6.7 Min 2 1 - 0.72 2
Time in System= 6.7 + 1 = 7.7 Min
Inventory in Queue = 6.7/0.7 = 9.6 Min
Inventory in Service = 0.7*2 = 1.4 Min
Inventory in System = 9.6 + 1.4 = 11 Min
Customers in the System (Cont.)
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Starbucks Problem Areas
Based on Visual Examination Based on Numbers/Data
Store size. Huge push from 8 – 10. Third register not being
utilized. No intended waiting areas. Inflow/Outflow customer
clashing. Human errors in beverage
preparation.
Inventory in Queue relates to over 50% of the total time spent in Starbucks.
Starbucks bar area congestion due to high volume of customers/drinks per customer.
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By reducing the standard deviation from 2 to 1.5, the time in queue will be reduced from 6.7 min/customer to 3.8 min/customer (roughly 57%).
Utilizing the third register, thus changing from a 2-server system to a 3-server system will reduce the utilization from 72% to 48%, which would reduce the time in queue to 1.33 min’s.
Recommendations
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Changes in the system are difficult for franchises due to standardization.
Opening a third register during peak hours would increase costs.
It is unreasonable to hire an extra employee for 2 hours/day.
The size of the store inhibits their ability to challenge the issue of customer congestion.
Challenges for Starbucks
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Thank You For Your Attentionand Happy Holidays!
Questions?
STARBUCKS
Suffolk UniversitySawyer Business School
of Management