Executive Briefings

Dunkin Donuts and Starbucks: Making Coffee without Water at Boston Logan Airport

When I arrived at the airport at 5:30 yesterday morning, there was a long line of people at Dunkin Donuts and virtually nobody at the Starbucks. It turned out that Starbucks was not selling coffee due to the water-main break in Boston that has made tap water undrinkable without boiling it first. Over at Dunkin Donuts, however, the coffee machines were brewing. I counted at least eight large water jugs behind the counter (like those used in water coolers) that employees were using to fill the coffee machines.

Busy cash registers at Dunkin Donuts, silence at Starbucks: a simple illustration of how companies with agile and responsive supply chains can minimize the impact of unexpected disruptions, and even profit from it, while companies with rigid, slow-to-respond supply chains can lose money and market share.

Why were some restaurants and other businesses able to procure bottled water and ice quickly to keep their operations running, while others were forced to scale back their operations or shut down? Why were some Boston residents able to buy cases of water at the supermarket, while others found nothing but empty shelves when they arrived? The answer in both cases is the same. Those who ended up with bottled water...

...heard about the water main break much sooner than the others;

...correctly interpreted the significance of the news and its likely outcomes;

...quickly formulated a response plan, or even better, already had one in place for such situations;

...executed their plan quickly and effectively.

No rocket science involved. All of these points have been documented countless times before and they are all important (see 9/11, Hurricane Katrina, West Coast Port Strike, Iceland Volcano).

However, there are factors at play today that didn't exist a few years ago. For example, if you want to be among the first to hear about important events or trends, you can't rely solely on your television, radio, or favorite news website. I didn't find out about the water-main break from any of these sources. I learned about it from a Facebook posting by one of my friends, which I read using my iPhone while waiting for a table at the Cheesecake Factory (I had five kids with me at the mall, but that's a whole different story). When the riots broke out in Iran last summer, it was Twitter users that broke the news, not CNN. And in recent days, parents have been turning to Facebook and Twitter to vent their frustrations about Johnson & Johnson's latest recall of children's medicines.

Simply put, when it comes to learning about breaking news and consumer trends, social media is FiOS, traditional media is dial-up.

The ability to access information from anywhere, at anytime, is another important factor. A key reason why information travels so quickly on social media is that many (perhaps even most) users are not tethered to a desktop computer at home or work. They are using smartphones to enter and consume information while on the go: waiting for a table at a restaurant, riding in a taxi cab, walking down the street, seeing a riot unfold, stuck in a traffic jam, in-between innings at a baseball game, or waiting for their bagel and coffee.

You can't be agile and responsive if your only vehicle for accessing information and communicating with others is plugged into a wall at your home or office.

Of course, mobility and social media create their own problems, such as poor work-life balance and information (and misinformation) overload. But these problems are manageable. What's more difficult to manage is change. This was evident at the Dunkin Donuts yesterday morning. Maybe those employees always look lost and confused, maybe they always bump into each other and get into arguments, but I suspect the real culprit were the water jugs. If you've perfected the tango of coffee making, introducing a jitterbug step in the middle of the routine is bound to trip you up.

I took three sips of the coffee and tossed it. It just didn't taste good to me. I then took out my iPhone and posted a comment about it on Facebook.

Source: ARC Advisory Group

When I arrived at the airport at 5:30 yesterday morning, there was a long line of people at Dunkin Donuts and virtually nobody at the Starbucks. It turned out that Starbucks was not selling coffee due to the water-main break in Boston that has made tap water undrinkable without boiling it first. Over at Dunkin Donuts, however, the coffee machines were brewing. I counted at least eight large water jugs behind the counter (like those used in water coolers) that employees were using to fill the coffee machines.

Busy cash registers at Dunkin Donuts, silence at Starbucks: a simple illustration of how companies with agile and responsive supply chains can minimize the impact of unexpected disruptions, and even profit from it, while companies with rigid, slow-to-respond supply chains can lose money and market share.

Why were some restaurants and other businesses able to procure bottled water and ice quickly to keep their operations running, while others were forced to scale back their operations or shut down? Why were some Boston residents able to buy cases of water at the supermarket, while others found nothing but empty shelves when they arrived? The answer in both cases is the same. Those who ended up with bottled water...

...heard about the water main break much sooner than the others;

...correctly interpreted the significance of the news and its likely outcomes;

...quickly formulated a response plan, or even better, already had one in place for such situations;

...executed their plan quickly and effectively.

No rocket science involved. All of these points have been documented countless times before and they are all important (see 9/11, Hurricane Katrina, West Coast Port Strike, Iceland Volcano).

However, there are factors at play today that didn't exist a few years ago. For example, if you want to be among the first to hear about important events or trends, you can't rely solely on your television, radio, or favorite news website. I didn't find out about the water-main break from any of these sources. I learned about it from a Facebook posting by one of my friends, which I read using my iPhone while waiting for a table at the Cheesecake Factory (I had five kids with me at the mall, but that's a whole different story). When the riots broke out in Iran last summer, it was Twitter users that broke the news, not CNN. And in recent days, parents have been turning to Facebook and Twitter to vent their frustrations about Johnson & Johnson's latest recall of children's medicines.

Simply put, when it comes to learning about breaking news and consumer trends, social media is FiOS, traditional media is dial-up.

The ability to access information from anywhere, at anytime, is another important factor. A key reason why information travels so quickly on social media is that many (perhaps even most) users are not tethered to a desktop computer at home or work. They are using smartphones to enter and consume information while on the go: waiting for a table at a restaurant, riding in a taxi cab, walking down the street, seeing a riot unfold, stuck in a traffic jam, in-between innings at a baseball game, or waiting for their bagel and coffee.

You can't be agile and responsive if your only vehicle for accessing information and communicating with others is plugged into a wall at your home or office.

Of course, mobility and social media create their own problems, such as poor work-life balance and information (and misinformation) overload. But these problems are manageable. What's more difficult to manage is change. This was evident at the Dunkin Donuts yesterday morning. Maybe those employees always look lost and confused, maybe they always bump into each other and get into arguments, but I suspect the real culprit were the water jugs. If you've perfected the tango of coffee making, introducing a jitterbug step in the middle of the routine is bound to trip you up.

I took three sips of the coffee and tossed it. It just didn't taste good to me. I then took out my iPhone and posted a comment about it on Facebook.

Source: ARC Advisory Group