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1 1 Delivering World-Class Customer Service Through Lean Thinking Starbucks Mission: To inspire and nurture the human spirit one person, one cup, and one neighborhood at a time

2 Columbus Ohio Store Lane Avenue Drive-thru Average Sales ~ $1M 20 Partner Staff In total Starbucks serves 50 million customers each week worldwide Katherine, Store Manager at this store about 1 year District Manager, Richie, oversees 12 stores 2

3 Starbucks Retail Operating Model Our Starbucks Mission We engage and inspire partners to achieve their personal best every day. Partner Customer We create inspired moments in each customer s day. Business We accelerate growth and optimize our store sales and profit. 3

4 Customer Service Video 4

5 Starbucks Has Some Interesting Challenges To Overcome Typical Challenges May not think about details of work method May not have work method teaching process Engaging employees in improvement process Traditional batch thinking with command & control management system Starbucks Challenges 17,000+ unique store situations globally with more than 200,000 partners Customer value by providing inspired moments of connection Unmet demand at peak Work method not part of historic culture Problem solving not a core capability 5

6 Starbucks Definition of Lean Delivering the most value from the customer s perspective Partner Customer While consuming the fewest possible resources By leveraging the talents and ideas of partners More Engaged Partners Burdensome Work Mentally Engaged Business Improved Business Motion = Productivity Sales / Transactions Waste Training / Turnover Improved Customer Experience Faster service quality 6

7 FY08 FY09 FY10 FY11 FY12 Our Journey Implementation Principles Engage people at all levels Provide an improved starting place Build problem solving capability Encourage store-level problem solving activity System of Work Introduction (Social and Technical) Introduce system of work and build capability of leaders to coach and problem solve Sustainment and Testing System of Work, Problem Solving Sustain introduced routines and improve Develop and Test Problem Solving curriculum and work system Beverage Routines, Leadership, Problem Solving Starbucks Teaching Model Frappuccino Routine and Espresso Bar Routine (single piece steaming) Problem Solving - Station setup, adjusting for demand changes Leading Change use and apply Change Management principles Problem Solving, Lean Immersion, Better Ways Problem Solving - Reduce brewed coffee waste by half Leader Lean Immersions key concepts, Better Ways, problem solving Pastry Case Reduced motion Brewed Coffee Availability All 3 coffee types available always Cash Handling Reduced motion Lean Store Transformation Experimentation Developed and tested curriculum Learned about store problems, partner adoption, etc. Key Concepts Go See Motion Work Routines Balance the Work Online vs Offline 7

8 Experienced Based Learning and Teaching: A Recipe For Success 8

9 What are We Trying to Do? Routines Consistent Highly Satisfied Customers tell us: Consistent Method of Work Consistent Method of Teaching Store Level Improvement High quality, Handcrafted Beverages Engaged Partners = Taste Speed Friendliness Accuracy matter most. Starbucks Teaching Model 9

10 Investing In Capability Beverage Routine Deployment Starbucks Support Center Lean Lead RD + a buddy trained first RD RD RVP... then they train other RD s and their RVP RD RD RD DM DM Shift Leads & Baristas 10

11 Experience-Based Change Current Process New Routine Process Record Beverage Production Pace Beverage Number Time on Hand-off Production Pace (sec) 1. Grande Vanilla Latte 0: Grande Mocha 2: Triple Tall Americano 2: Grande Latte 3: Iced Grande Skinny Vanilla Latte 4: Grande Caramel Macchiato 4: Grande Vanilla Latte 0: Grande Mocha 1: Triple Tall Americano 2: Grande Latte 2: Iced Grande Skinny Vanilla Latte 3: Grande Caramel Macchiato 3: Current Barista: Shannon New

12 Objectives Describe the Starbucks Teaching Model journey and how it was used to implement standard work Understand the process for breaking down work for the teacher to effectively teach Learn, understand and demonstrate the Starbucks Teaching Model Consistent Highly Satisfied Customers tell us: Consistent Method of Work Consistent Method of Teaching High quality, Store Level Handcrafted = Improvement Beverages Engaged Partners Taste Speed Friendliness Accuracy matter most. 12

13 Work Routine Structure An organizing tool for the teacher not for handing over to the learner Major Steps A logical segment of the work that advances the process Not meant to be a complete time motion study Key Points Reasons Why A key for doing a particular step properly Most parts of the job are quite easy to learn but 5% to 10% are difficult or tricky Anything that might Make or break the job. Injure the partner (safety factors are always key points). Make the work easier to do. Explains the why behind each Key Point 13

14 Creating a Work Routine 1. Observe the work multiple times 2. Line list the steps 3. Break into chunks these become major steps 4. Once final, observe the work again and capture key points 5. Observe the work once more and capture reasons why the key points are important 6. Document, test and observe 14

15 Starbucks Teaching Model Four Steps 1. Prepare 2. Present twice Major steps Major steps + key points + reasons why 3. Practice three times Silent demonstration only Verbalizing and demonstrating major steps Verbalizing and demonstrating major steps, key points and reasons why 4. Follow-up 15

16 Please Proceed to the Blackwell Hotel Ballroom for a Hands-On Learning Experience 16

17 Please Take a Seat 17

18 Starbucks Teaching Model View T-Shirt Folding Video 18

19 Starbucks Teaching Model Demonstration 19

20 Activity: Using The Teaching Model Major Step Key Points 1. Each table will do this activity as a group. Ensure that each table has one teacher and one learner. 2. Teacher teaches learner to fold a t-shirt. Use the Starbucks Teaching Model-4 steps. Use t-shirt folding routine. 3. Document observations about the process. Ensures you are ready to share back learnings. 4. If time permits repeat steps 1-3. Select a new learner and teacher. 20

21 In Summary: A Recipe For Success Consistent Highly Satisfied Customers tell us: Consistent Method of Work Consistent Method of Teaching High quality, Store Level Handcrafted = Improvement Beverages Engaged Partners Taste Speed Friendliness Accuracy matter most. 21

22 Results to Date Overall Customer Satisfaction 66% +21% 80% Productivity % 11.3 Coffee Waste 100% 50% Partner View Survey Spring 2010 Of 12 changes rolled out in our stores, Lean was one of the most positively rated changes by all store partner levels Majority of partners at all levels agreed they feel encouraged to try/suggest better ways 22

23 Starbucks Lean Journey Key Learnings to Date Experienced-based learning is the most effective way to shift thinking and create engagement Waste exists everywhere you just have to learn how to see it Focus on technical and social together Where we are today Moving from creating a case for change to change leadership requires leaders getting close to the work Stabilizing the foundation to prepare for a new system Balancing a desire to get it out there while doing it in a way that achieves sustainable results through behavior change 23

24 24 Questions & Answers

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