Monthly Archives: September 2014

Lean Manufacturing–A Panacea for All Industries?

In Tuesday’s lecture, when I first heard that Starbucks basically has the same operational strategy as Toyota, I was astonished —- how could two companies from totally different industries have the same operational pattern? This question intrigued me to do some research on this topic. During my research, I learnt an interesting concept called “lean manufacturing”, which was primarily developed by the automaker Toyota in 1990s. And there are a couple of my ideas about “lean manufacturing” that I would like to share.

Does “lean manufacturing” impair the quality?

According to the definition of “lean manufacturing”, a company should only cut off the expenditure which doesn’t contribute to value-added of the product. In this sense, “lean manufacturing” will not reduce the product quality, but it may likely help the producer to improve the quality of its product. Because to successfully implement “lean manufacturing”, a producer has to figure out what kind of value that added to the product actually satisfies customers’ demand. This helps producers to rethink their operational systems and forces them to have a closer relationship with customers so that they can make a strategy that can lean the cost and maximize profit at the same time.

Does “lean manufacturing” apply service industry?

Compared to manufacturing industry, service industry has a shorter history. So it makes sense that servicing companies like Starbucks could learn some operational techniques from manufacturers. However, service industry and manufacturing industry are quite different. The former offer the customers unique human-involved services that require face-to-face interactions whereas the later provides customers with just standard products. Once the service is regulated as a streamline, it tends to become robotic and rigid. Because of this, companies in service industry should be extremely careful when employing “lean manufacturing” techniques. Take Starbucks as an example. According to Starbucks’ CEO Howard Schultz, “lean manufacturing” can help the barista spend less time on making coffee and more time in connecting with the customer. Theoretically, this could be true. However, just as Larry Dignan concerned in his article “Starbucks eyes lean manufacturing techniques”: “Can Starbucks employ lean manufacturing techniques used by fast-food rivals without becoming a fast-food joint itself?” If Starbucks focuses too much on increasing customer flow and efficiency, it may probably blur its value proposition and lose customers.

Reference:

http://cmuscm.blogspot.ca/2013/02/will-starbucks-scrap-lean-manufacturing.html

http://online.wsj.com/articles/SB124933474023402611

http://www.shmula.com/starbucks-why-lean-why-now/5639/

http://blog.newsystemsthinking.com/the-wall-street-journals-story-on-starbucks-and-lean/

http://www.qualitydigest.com/inside/twitter-ed/Starbucks-lean-ruins-experience.html

http://www.smartplanet.com/blog/smart-takes/starbucks-eyes-lean-manufacturing-techniques/

Business Ethics In The Age Of Big Data

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During the process of pursuing maximum profit, stakeholders should take business ethics into great consideration as it is the bottom line which should never be overstepped. This is even more significant in the age of big data.

Facebook, the social media giant at present, has been reported that it used users’ likeness in advertisements without their permissions. In addition, it has also said that facebook got involved in the activity called “like” Fraud, where it sold pages with a huge number of “likes” to companies who want to build substantial social following.

Facebook’s misconducts have aroused public fury and growing concerns about data privacy. If facebook continues to secretly use the users’ information for business purposes, it will likely lose a large part of its users and seriously hurt its revenue in the long-run. Business is founded on the mutual trust among stakeholders. If the foundation of this trust collapses, the whole business will be destroyed as well. In the age of big data, companies have the capacity to track tens thousands of choices and decisions customers made online. And they can use the data to help them make marketing decisions and even manipulate customers’ conducts. Moreover, the regulation of the online market is not perfect yet. Therefore, business ethics are more required to keep the market in order. With the help of technology, companies have far more power to maximize their profits. However, rather than focus on what they can do, companies should consider more about what they should do while pursuing their benefits.