I have a bit of a love hate relationship with Starbucks. It feels expensive. The lines are long. And I resent the fact that I give them an interest-free loan every time I use their mobile app. But my go-to Pike and banana nut loaf are delicious, and the baristas at my preferred location are fun. They give me a hard time if I deviate from my usual, which I appreciate. When I’m feeling uncertain about the day, making a Starbucks run is a surprisingly good way to get my head on straight.

On a recent visit, I arrived at the pickup counter and found my order incomplete. The slice of banana bread had been warmed, bagged, and labeled, but my cup of black coffee had yet to be dispensed into its paper cup. Looking behind the bar, I saw the usual blur of green-aproned baristas moving from task to task. It was frenetic, but organized too, with defined work areas and clear routines. The scene reminded me of my days working at a distribution center. The area where we packed orders had a similar manic choreography, and watching the baristas go about their jobs I found myself trying to understand their order flows and processes. Specifically, I wanted to understand how Starbucks organizes and prioritizes its work.

Customer Flexibility vs. Operational Complexity.

Starbucks is in a bit of a slump. Sales in established locations have fallen for 5 consecutive quarters, contributing to a recent change in leadership. In an attempt to win back customers, the new CEO, Brian Niccol, has made operations a focus and pledged to reduce wait times and improve the customer experience. They are investing heavily in their order sorting algorithms and store processes, with the topic getting conspicuous attention in recent earnings calls.

Some of the operational challenges stem from the increasing importance of their mobile app. Since 2015, Starbucks has allowed customers to place orders remotely, before they arrive at the store. This grants convenience and flexibility, offloads the labor associated with order entry, and as mentioned previously, encourages customers to give them free loans to earn “mobile rewards.” But this convenience and savings come at the cost of operational complexity. There are three sales channels at a typical Starbucks today: walk-ins, drive thru, and mobile. Drinks are processed in the order received, whether placed in person or through the mobile app. This first-in, first-out system creates challenges, particularly at busy times. Operational capacity is often devoted to mobile customers who have yet to arrive, while those already at the store grow impatient. The staging area gets crowded with completed drinks, leading to that awkward seek and find many of us have experienced. 

Though mobile orders create challenges, they also represent a kind of operational opportunity. They are different from orders placed through the traditional sales channels, where customers are present at the restaurant and presumably want their coffee as soon as they can get it. With mobile, customers generally place the order before they arrive and don’t care precisely when it is finished, as long as it is complete, and reasonably fresh, when they get there. This arrival delay makes it sensible to consider processing work out of sequence.

Warehouse work

Back in my warehousing days, we thought a lot about how and when we processed work. Through our website, customers could place orders at any time of the day or night, and we committed to getting them their stuff in two days. The parcel carriers needed most of this time to get the shipment to the customer, but we generally had a few hours to fill the order, pack it, and load it onto the truck. We took advantage of this window to operate more efficiently. A few principles guided our thinking:

1. Urgent Work First: We prioritized packages that had time constraints. If an order’s truck was leaving soon, we’d complete it first — even if there were other orders that had come in before it.
2. Stay In Sync: Many customers ordered more than one thing. Even if the items were stored in areas far from one another, the customer would still expect them to show up in the same box. We would begin processing all components of that order simultaneously and only when we had enough capacity for all the processes involved.  As a result, the components of an order would arrive in the packing area at a similar time, where they would be combined and put on a truck. This reduced the amount of incomplete work floating around the warehouse, which in turn reduced opportunities for error.

   A consequence of the above is that simple orders (with fewer work areas involved) tended to move through the system faster. They didn’t get held up behind large and complex shipments that gobbled up lots of warehouse capacity.

3. Batch Work Where Appropriate: The longer the work queue, the more likely you are to see collections of similar jobs in the queue. So we designed work areas to take advantage of this phenomenon, batching jobs that used the same skills and materials. 

   Imagine a work area where people pack boxes. A packer will complete two identical boxes more quickly and accurately if she does them back to back, as the packages require the same materials (container, tape, infill, and packing surface) and skills. If she needs to shift to some other task in between, say to pack a different type of package, the process will naturally go more slowly. This is pretty much the same principle that makes assembly lines work: Keep people focused on the same task, and they will perform that task more efficiently.

Starbucks as a Coffee Distribution Center

The work queues at Starbucks are measured in minutes of work rather than hours. Still, there are a number of warehousing principles they could easily adopt.

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