Minimizing the Wait Time in Queues at Starbucks - Assignment Example

Minimizing the wait time in queues at Starbucks Prepared for: Mr., Deverl Maserang, Executive Vice President Global Supply Chain Prepared by: Moayad Barri Mechanical Engineering Kansas State University Date 500 N 4th St. Apt 206, Manhattan, KS 66502 Date Mr., Deverl Maserang, Executive Vice President Global Supply Chain Suite 101 Arlington Texas 76011 817-459-2003 Dear Mr. Maserang, I have completed my research report titled Minimizing wait time in queues at Starbucks. The purpose of my research was to examine the ways minimizing the wait time by customers in the queues at Starbucks. Through from my research I found many possible solutions that would effectively address the concern, some of the important and possible solutions included the application of input analyzer software, simulation software and the M/M/S model. By successful application of these strategies, it is evident that Starbucks would have solved the problem of customers spending lots of time on the queues. I gathered the information for this report by observing the current trends in operations at Starbucks. I believe through the application of the strategies given in the report, would go a long way into providing sufficient solutions towards the problem of prolonged wait time on queues by customers at Starbucks, which is already causing distress and dissatisfaction among the customers. In one of the projects I did previously, I had an opportunity to build a simulation model to optimize a TV manufacturing Supply chain using SIMIO software. This simulation model helped me be familiar with different supply chain operations I was handling and gave me more insight into different topics in my field and believe my recommendations would be of significant importance in the current situation at Starbucks. I would appreciate the opportunity to meet with you to discuss further on how to improve the services and operations at Starbucks Corporation. Please let me know if further information is required by contacting me by email at ayoda@ksu.edu or by phone at (785) 317 - 0988 on Monday through Friday in the afternoon. I look forward to hearing from you Sincerely, Moayad Barri Table of Contents List of Figures List of Abbreviations Wq = Expected time spent on queued number of customers in the system. Minimizing the Wait Time in Queues at Starbucks 1. EXECUTIVE SUMMARY Starbucks is a global brand name in the provision of beverage products, especially coffee. In an environment where competition becomes stiffer by each day, every organization work to develop appropriate strategies that would ensure that they remain relevant in the market arena. One of the most important aspects in ensuring success and profitability in organization is that the customers receive the best treatment possible in the manner in which services are delivered to them. Business and organizational successes are usually attributed to the customers and the manner in which the developed strategies influence their wellbeing. Consequently, I have examined the current state of operations at Starbucks considering the good brand name that the organization has set in the past from its operations. I have done so by determining the various factors that have contributed towards the successful progression in operations in the past. With its high standards of operation, Starbucks has been able to attract an overwhelming share of the market. Considering the competition that the organization faces from other coffee shops, Starbucks must evaluates its strengths and weaknesses as well as those of its competitors in order to come up with appropriate strategies that would ensure that Starbucks remain profitable. I have found out that customers at Starbucks spend too much time in the queues resulting into distress and dissatisfaction among the customers. Considering the significance of customer satisfaction towards the success of an organization, calls for development of strategies most appropriate for the minimization of wait time among the customers. The main factors contributing towards the longer waiting time on the queues are the increased number of customers, few servers and longer queue lines (Ramalhoto. 1990). Based on such perspectives, from my research, I recommend Starbucks to apply the following strategies in order to curb the increasing dissatisfaction and distress among the customers attributed to the longer times they have to spend awaiting service on the queue lines: Apply input analyzer software Increase the number of servers through the M/M/S model Apply the Sino Simulation software The following recommendations will ensure that the wait time in the queue lines will be substantively reduced as more servers will ensure that customers are served faster. In the case of Input Analyzer Software, it is evident that with its application, it is possible to determine the time spent by customers on the queue from entry to the time of service, from which improvements can be made to fasten the speed. By the use of M/M/S model, which works together with the Simulation software, ensures that the number of customers served at a particular time increases depending on the number of servers. If the number is increased to two, then the number of customers served also increases in a similar margin. These would therefore, work to reduce the time customers have to wait in the queues. Additionally, I recommend that the above findings are implemented by Starbucks as reduced wait time for the customers in queues would ensure that customers are served faster, thereby influencing their satisfaction and relieve of their distress, aspects that would ensure that Starbucks remains profitable and a brand of choice for customers. 2.0 INTRODUCTION My report addresses the current state of operations at Starbucks and specifically on the queuing theory, and the manner in which improvements could be made considering that at its current state, customers spend a lot of time on the queue lines as they await service. This is indeed an important aspect for considering the effects associated with increased waiting in the queue lines for customers at Starbucks as competition from other coffee stores offering similar services increases. In this report, I discuss the current state of operations at Starbucks and specifically on the longer wait time on the queues by customers. I have examined the major causes of longer wait times in the queues, the effects that has on Starbucks, and the possible solutions that if appropriately applied would ensure the minimization of customer wait time in queues. I gathered the following information through observation of the trends at Starbucks. From the observation, I realized that customers spent significantly longer periods in queue lines as the await service. This is evident based on the perspective that if the arrival time of the customer is recorded, which is the time when a customer first makes entry into the stores, and the time in which the service starts, which is the time when a customer makes an order to the time when he or she receives the order. Waiting for long by customers in the queues has substantively contributed towards an increased distress and dissatisfaction among many of the customers (Kovalenko, 1974). This report is organized into four major sections for the discussions. These discuss the application of queuing theory at Starbucks at length, the effects, causes, and the possible solutions that would work to minimize the wait time in queues at Starbucks. 3.0 QUEUES AT STARBUCKS Going by the recent technological advancements that have taken control around the globe, many organizations and businesses are currently engaged in stiff competitions as each tries put ways of outsmarting the other. By examining the current trends experienced by customers at Starbucks, it is evident that there is indeed a significant problem based on the fact that customers spend lots of time in the queue lines as they await service, an aspect that contributes significantly towards the increased distress and dissatisfaction among the customers. In the wake of increased competition among many players in the industry, it is important for Starbucks to make urgent strategic plans to prevent losing any customers to its rival organizations (Bocharov, 2004). The queuing theory at Starbucks is an element that involves various aspects as will be discussed below. 3.1 Effects of Queues at Starbucks Increased wait time in queues at Starbucks has contributed towards a number of effects both on the customers and Starbucks as an organization. In every business setting, customers are usually the determining factors towards the success of the business, and in Starbucks case, it the same point of view. It is in the interest of every business that they offer the best customer service as such translates to increased profitability. In the current state, Starbucks has its customers spend more time on the queue lines as they await service, an aspect that substantively increases customer dissatisfaction and distress. Based on such observations, it is clear that Starbuck’s profitability is likely to reduce considering that most of the customers would prefer getting services from other stores that ensure that customers spend less time on the queues. On the customers’ perspective, it is substantively clear that the effects of longer wait on queue lines have greatly affected them. Having to spend more time in the queues between the times when a customer makes entry in the Starbucks store to the time when an order is served increases dissatisfaction of such a customer towards the service provider (Cooper, 2002). Having delays could as well make some customers seek alternative services from other stores offering similar services without customers having to spend more time in queues. On a similar perspective, customers could as well seek for the services offered at Starbucks elsewhere as a result of distress on spending more time in the queues. In both instances, customers would be forced to seek for better services elsewhere. There are also a number of effects that the long queues at Starbucks would have on the business itself. First, the long queues indicate that the number of servers available is not sufficient to effectively serve all the available customers in the queue in the appropriate time, most especially during the peak hours when the numbers of customers increases. Fewer serves would result in a situation in which they are overworked, and therefore, offer poor services to the customers. Reduced service quality would contribute substantively towards customers seeking for alternative stores offering similar services, however, with better customer service (Gross and Harris, 1974). With increasing numbers of customers seeking for alternative stores, substantively reduces the profitability of Starbucks, considering that better profits come in instances in which there are more customers visiting the store. Poor customer service, however, increases the numbers of customers that leave, contributing towards the business making losses (Gross and Harris, 1974). 3.2 Causes of Long Queues at Starbucks Long queues at Starbucks have been attributed to because of many factors. First, Starbucks has in the past been very successful in its operations, thereby acquiring an increasing number in terms of customer base. The significant increase in the number of customers has a direct influence towards the increase in time spent by the customers in the queues (Lee, 1966). Secondly, despite the significant increase in the number of customers, Starbucks has not increased the number of servers. Such an aspect indicates that there would be fewer servers to serve the increased number of customers. Ideally, such observation would make customers spend more time in the queue lines as they await their turns to receive their orders after placing their orders. Another cause to customers spending longer times on the queues at Starbucks is the fact that there is usually only one queue line from which all customers are served. Due to the fact that Starbucks has acquired many customers in the recent past, it is significantly clear that with the increased number of customers it would not be easy to serve all of them through a single queue line without making them stay longer in the queue (Gross and Harris, 1974). Based on such a perspective, it is substantively evident that with the high numbers of customers visiting, having a single queue line to serve all the customers would definitely result into the customers having to stay longer on the queues. 4. GOALS OF SOLUTION The main objective of my research is to find the most appropriate mechanisms through which to reduce the wait time in queues by Starbucks customers, an aspect that the organization currently faces as one of its greatest challenges, threatening its success. This section discusses two major goals towards providing the most appropriate solutions. These are the shortening of lines and enhancing the efficiency in service delivery. 4.1 Shortening of Queue Lines Shortening of queue lines is an obvious occurrence when minimizing the wait time in queues by customers. Having customers to be served in shorter queue lines ensures that the customers are then able to spend limited time while in the queue. 4.2 Faster Delivery Another major goal of the solutions is ensuring faster service delivery as like is the case with the shortening of queue lines; faster delivery also ensures that customers spend lesser time on the queues, which is indeed the main objective of the research. Faster service delivery is only achieved by ensuring that there is limited wastage of time especially in serving the customers on queues. 5.0 SOLUTION Reducing the wait time for customers in the queue at Starbucks will be the greatest possible solution, considering its current state and the challenges associated with the long wait times that customers spend in the queue. The most appropriate solutions that would help in reducing the customer wait time at Starbucks would be in three main categories. The use of Input Analyzer Software M/M/S model Simulation Software 5.1 Input Analyzer Software Through the application of Input Analyzer Software, Starbucks is able to determine the arrival time of customers as recorded by the Input Analyzer Software as the time when the customer entered to Starbucks, the time service started when the customer ordered the products until he or she gets his order (Prabhu, 1986). From the time determination, Starbucks is able to improve on the delivery of services to ensuring that the customers are served faster. From the mean inter-arrival time, the inter-arrival time per second can be calculated, which will also enable the calculation of the service time per second. From my research, I obtained the data below to determine the service time and the inter arrival time that shows an exponential distribution for the customers. The blue curved line describes the time between events which occur independently and continuously at a constant average rate. The histogram below shows how Starbucks is busy during the peak hours. Input Analyzer software statistics 5.2 M/M/S model The M/M/2 model works in such a way that the number of servers is increased dependent on the number of customers available for service then the number of servers is increased to two servers. An increase in the number of servers ensures that the number of customers who are served at a particular time increases relatively, thereby reducing the time that customers spend on the queue (Lee, 1966). This particular model works in such a way that the number of customers is determined, and based on the findings, the number of servers and queue lines are increased appropriately and the system of the queue will automatically be affected positively (Prabhu, 1986). These effects are then evaluated to check if the system can handle the situation. This situation could be evaluated by using the queue model of M/M/2. The service time and the inter-arrival time will stay the same. After calculating and evaluating the system with one more server we ended up with reduced time spent by the customers and a faster delivery of service. M/M/2 Model (SIMIO Software) The Simio software shows how the M/M/2 model works in such a way that the number of servers are increased dependent on the number of customers available for service then the number of servers is increased to two servers. An increase in the number of servers ensures that the number of customers who are served at a particular time increases relatively, thereby reducing the time that customers spend on the queue. The equations for using two servers are as below: Where: 6. CONCLUSION Through the application of the models mentioned above, Starbucks customers experience a very low amount of wait time, and they are expected to be wait and served in about less than one minute. Additionally, the quick services lead to a very low chance of losing Starbucks customers through reneging and balking. Furthermore, by increasing the number of servers in the system, the Starbucks customers will be in the queue line and served in less than one minute. Such a perspective means the system is prepared to welcome more customers’ demands. With an increase in welcoming of customers, it is evident that the profitability of Starbucks is likely to increase. 7. RECOMMENDATION Based on the findings of the research towards minimizing wait time by customers at Starbucks, I would recommend that the management at Starbucks applies the above strategies, as they would have a substantive significance towards the minimization of wait time for customers at Starbucks. References Bocharov, P. P. (2004). Queueing theory. Utrecht: VSP. Cooper, R. B. (2002). Queueing theory. S.l.: [s.n.]. Gross, D., & Harris, C. M. (1974). Fundamentals of queueing theory. New York: Wiley. Kovalenko, I. N. (1974). Queueing theory. Journal of Soviet Mathematics, 2(1), 1-66. Lee, A. M. (1966). Applied queueing theory. London: Macmillan;. Prabhu, N. U. (1986). Queueing systems: Theory and Applications. Queueing Systems, 1(1), 1-4. Ramalhoto, M. F. (1990). Queueing Theory. European Journal of Engineering Education, 15(3), 233-241. Read More