Balancing Speed and Sustainability: The Operational Dilemma of Reusable Cups in Drive-Thrus

This newsletter has always been vocal about the fact that every decision involves a tradeoff.

However, I don’t think only those who study operations research care about tradeoffs. In fact, I think economists believe that tradeoffs amidst scarce resources is the hallmark of economics. Nevertheless, the main difference is that economists tend to assume these tradeoffs (like diminishing returns to scale), whereas we, ops people, tend to study them from first principles and ground them in the operational reality of the firm: the inventory system, bottlenecks, queues, etc.

This is a long preamble to discuss a tradeoff that we’ve never encountered before: speed vs. environmental sustainability.

First, the story:

Effective January 3rd, Starbucks implemented a new policy, allowing customers to use their own cups for mobile and drive-thru orders, in addition to in-store service, offering a 10-cent discount. This environmentally conscious move aims to address the significant waste generated by disposable cups, and help Starbucks realize their broader goal of reducing their waste by half by 2030.

However, the policy has raised concerns among the company’s employees (or “partners,” as they are termed by Starbucks), and the national union, Starbucks Workers United. Workers like Jet Rho, a four-year employee at a Connecticut store, voiced apprehensions about the policy’s feasibility amidst the current challenges of understaffing and high workloads.

These concerns are echoed by Starbucks Workers United, who highlighted the environmental benefit of the policy but also its potential strain on working conditions. The policy introduces operational challenges, particularly in drive-thrus, where efficiency is key, as drinks for customers with reusable cups can only be prepared upon their arrival. Furthermore, employees are required to check the cleanliness of personal cups, potentially leading to the use of disposable cups if deemed necessary. Despite these concerns, Starbucks insists that the policy is efficient, citing successful tests in Colorado stores.

However, the effectiveness of this initiative may be limited by its low utilization, as Starbucks’ data shows that less than 1% of orders currently use personal cups, potentially easing the workload for employees and leading to more waste.

To better understand the policy and the reason I find it hard to believe that this is more efficient, let’s look at the policy’s operational implications and then discuss why this decision is even more peculiar for drive-thrus. 

Parallelism in Queues

Intuitively, introducing reusable cups into a drive-thru operation seems counterproductive from an operational standpoint. Drive-thrus are designed for speed and efficiency, with each step in the process optimized to minimize wait times. Introducing reusable cups will disrupt this flow because unlike disposable cups, where the process of order-taking, driving to the pickup window, and preparing the drink can occur in parallel, reusable cups necessitate a sequential process which must all occur at the same time —customer hands over the cup at the pickup window, employee fills it and returns it. This additional step lengthens the service time for each customer who opts for their own cup, which can potentially create bottlenecks in the system.

To quantify the impact of introducing reusable cups in a drive-thru, I ran a simulation with the following parameters:

Arrival Rate (λ): 

Varied from 0 to near maximum capacity to cover a wide range of operating conditions.

Service Time:

No Reusable Cups system: 1-minute ordering and then parallel processing with 30-second coffee making, which happens while the customer drives to the pickup window.

All Customers Using Reusable Cups system: 1-minute ordering, and then sequential processing with 30-second driving to the pickup window, and 45-second coffee making (to reflect the fact that now the cup is to be taken, lightly inspected, filled with coffee, and handed back to the customer). 

Simulation Scenarios: 

Included 0% (no reusable cups), 10%, 50%, and 100% (all reusable cups) scenarios to reflect varying levels of reusable cup adoption.

The simulation results indicated a clear trend:

Disposable Cups (0% Reusable): When no reusable cups are used, the system demonstrates the most efficient waiting times across all utilization levels. This efficiency is due to the parallel processing of orders, where coffee is prepared as the customer moves from the order-taking window to the pickup window.

Increasing Reusable Cup Usage: As the percentage of reusable cups increases, so does the average waiting time. This increase is more pronounced at higher reusable cup percentages, reflecting the additional sequential processing time required for these orders.

High Utilization Impact: At high utilization levels, the system’s efficiency is increasingly challenged by higher percentages of reusable cups. The waiting times grow significantly, indicating a strain on the system due to the sequential nature of handling reusable cups.

The simulation underscores the challenge Starbucks faces in integrating environmentally friendly practices (i.e., reusable cups) into a system optimized for speed and parallel processing, especially during peak periods.

So, the operational impact of introducing reusable cups in drive-thrus, while environmentally friendly, can lead to significantly reduced efficiency, longer wait times, and potential customer dissatisfaction. 

But I would argue that this is only part of the picture.

Starbucks is Becoming More Efficient

In my article “Starbucks: The Rule of Thirds,” I discuss Starbucks’ evolution from a service-oriented firm to one that increasingly emphasizes on production efficiency and speed. Initially, Starbucks focused on creating a unique customer experience, positioning itself as that “third place” beyond home and work. However, as the company expanded its product range and faced the complexities of modern retail, it began adopting lean manufacturing principles akin to those used in production lines. This shift prioritizes operational efficiency and speed, especially in the context of growing online orders and delivery services. Starbucks’ transition reflects a broader trend in the retail and service industries, where the balance between customer service and efficient production becomes increasingly important.

The decision to allow reusable cups, considering the company’s shift toward a production line model that prioritizes speed, seems even more at odds. 

By allowing the use of personal reusable cups, the firm introduces a new variable that potentially slows down the process, while also making this slow-down clear to its customers. 

The additional complexity of workflow, with employees having to check each cup’s sanitary condition while having to prepare the drink upon customer arrival, contradicts the company’s lean manufacturing approach, which aims to maximize efficiency. In short, it goes against Starbucks’ recent trend toward streamlining and speeding up its service.

On the other hand, over the years, Starbucks has experimented with various ideas as part of its “lean approach,” so this may well be just another idea that the firm is trying, only to reverse it in a couple of weeks. Starbucks has experimented with the efficiency-customer service tradeoff several times and often makes decisions in favor of one versus the other. 

For example, Starbucks doesn’t allow baristas to make two espresso drinks simultaneously, as is common in other coffee shops, even though it definitely has the technology to do so. From conversations I’ve had with people at Starbucks, the reason is so the customer feels the drink is made “for them.” The decision to maintain this practice was made after the firm tried to allow baristas to make multiple drinks simultaneously (which was clearly more efficient) and received negative feedback from customers. But this was before the drive-thru era and online order era. 

So, the introduction of reusable cups in drive-thru might be one of those attempts to draw the tradeoff curve. But it definitely goes against Starbucks’ own trend. 

Cloud vs. Line Queues

It’s true that not all systems are efficient, but in some cases, inefficiency is more salient than in others. 

Starbucks’ history with reusable cups reflects its evolving approach to balancing sustainability and customer convenience. Their journey from the 1980s, when using your own cup was first encouraged, through the halt of the COVID-19 pandemic, to the recent nationwide implementation of a drive-thru reusable cup policy, mirrors a broader shift. 

I would argue that reusable cups are somewhat inefficient but until the introduction of this practice in drive-thrus, their inefficiency wasn’t all that transparent to customers.

In traditional Starbucks stores, the operational line is less visible as it blends seamlessly with the customer experience. I’ve termed this as a “cloud-like queue,” as it doesn’t feel like standing in line once the order is placed. You don’t know how many customers are waiting for coffee versus looking for a seat or waiting for a friend. 

In drive-thrus, however, the operational line is more apparent, and customer behavior is influenced by the saliency of that line. You can see how many cars are in front of you. You know exactly when you start and stop, and you have a watch in front of you for the whole experience. 

As my simulation above showed, introducing reusable cups in this environment, where efficiency and speed are paramount, adds a layer of complexity that indicates Starbucks is grappling with the dual goals of sustainability and maintaining a swift service model. This complexity is further highlighted in the notion of the drive-thru, where operational processes are linear and sequential, making the inefficiency even more apparent and quite annoying. 

I’ve mentioned Marcello Olivares’ research in the past on the impact of line length on customer abandonments. It’s clear that the visibility of the queue in Starbucks’ drive-thrus could influence customer decisions. Olivares’ findings suggest that longer visible lines may lead to increased customer abandonment. 

In my own work, I’ve shown that people value their time waiting, on occasion as much as 10 times their earnings. People hate waiting. People hate waiting when the waiting is idle. People hate waiting when the waiting line doesn’t move. 

Applying this to Starbucks’ implementation of the reusable cup policy in drive-thrus, the additional time needed for handling personal cups could potentially lengthen the visible line and the waiting times, thereby affecting customer perception and potentially increasing the likelihood of abandonment or people not even driving to Starbucks (i.e., choosing a place that has a shorter wait and better coffee). No trade-off. 

But everything I’ve written above is driven by the assumption that we all want faster service. 

In light of these findings, it’s evident that the focus on operational speed and efficiency, while crucial in a fast-paced consumer environment, might need to be balanced with a greater emphasis on sustainability. Despite the potential increase in waiting times, the environmental benefits of reusable cups align with a growing societal awareness and responsibility toward reducing waste and preserving our planet. Perhaps it’s time for both businesses and consumers to recalibrate their priorities, placing a higher value on sustainable practices even if it means a slight compromise in speed. This shift in perspective could lead to more environmentally conscious decisions in our daily lives, fostering a culture where sustainability becomes an integral part of the service experience rather than an afterthought.

Regarding coffee, I have a different tradeoff, where Starbucks doesn’t excel. But you’ve probably heard enough bashing from me about Starbucks, so no more on that today.