Emi and Juan Antonio Tena, wife and husband, founded 365 in 1999. 365 is a Coffee Chain set in Barcelona. During their childhood, the founders waited tables, served coffee, and helped in the kitchen together with their families. 365 had 3 cafés opened in 2003, 9 in 2005, and in 2009, there were 33 of them. Contrary to what their growth suggests, things didn’t go smoothly. The staff was angry. The quality was poor. They were disorganized. As a result, customer satisfaction was low. 365 is a mix between a café and a bakery: they sell sandwiches and pastries that you can eat in the shop. Baguettes and pastries are produced in a single bakery and are then transported to the shops. In 2009, to support their growth, and because the fridges were full, the founders were planning on buying a whole new building to increase their storage space. At this point, by chance, Juan Antonio came across the book Lean thinking by Daniel Jones and James P. Womack.

The book contributes to the theory of Lean manufacturing, which is one of the many efforts of extending what Toyota had been doing successfully since the 1950s. Keep in mind that Toyota’s challenge was to manufacture cars fast in post-war Japan, where resources were rare and expensive. Toyota started from nothing to become one of the main car manufacturers in the World by putting together a groundbreaking learning system. The core principles of this learning system have been tested and replicated successfully in many industries and are now known as Lean. Imagine the perfect Lean thinking system as a product built right the first time by skilled employees akin to karate masters. Lean's approach is that everybody in the company, founders included, break the “it’s always been done that way” state of mind to look for incremental compound improvement, every single day. So how did 365 approach this? The founders started by telling the bakers to go home two hours earlier for three weeks.

Lowering the surface of the sea to see the rocks

First, let me reassure you: even though they were working less, the bakers were still getting their full wages. The fridges got empty in three weeks, as the bakers were producing less than what was needed for each day. And that was precisely the goal of this risky maneuver. See, those storage spaces were very costly, and they wasted time. Picture yourself picking frozen baguettes in a very large fridge, trying to find the freshest ones at the back, which you can barely see. You could argue that it’s a matter of organization, yet the bigger the storage, the harder it is to actually visualize what’s in it, and the more you get constrained by how your facility is designed. At first, the bakers thought the founders had gone crazy. Little by little, the fridges’ contents decreased and they eventually got rid of the freezer. The expensive building they considered buying? They did not need it anymore. The quality of the bread? Without freezing, it increased dramatically.

This is not a fairy tale though. Emi and Juan Antonio did not snap their fingers, made the fridges disappear, and suddenly everyone became happy. Here’s why. A baguette gets significantly less fresh after one day. 365 has a single bakery, without much storage space for the baguettes. The bakery had to deliver them more often to the shops, and any problem in the production process had a higher impact on this delivery. And this is where it gets interesting! Remember the situation: you are an unhappy worker who has to produce a lot. Suddenly, your stressed boss Juan Antonio tells you that you have to go home earlier every day until the fridges become empty. When they did, every problem, like a broken oven or overcooked baguettes, could no longer be solved thanks to your stock, and so they hurt more than before. Wouldn’t you have asked for the old system to be brought back? This is where the founders had to be smart.

Lean is a just-in-time manufacturing process, meaning that ideally, you would produce baguettes, or cars, one by one. Just-in-time is also a hallmark of Fordism, a system that has been rightfully criticized for the big strain it put on workers. Lean, and Toyota, use just-in-time to show the problems in the manufacturing process and give the workers the ability to stop the production chain if they spot a problem, and the means to solve them. One classic metaphor is "lowering the surface of the sea to see the rocks". Emi and Juan Antonio hired Lean coaches to help the bakers solve the day-to-day production issues, they encouraged the employees to take Lean classes and went to Lean workshops.

Embracing problems

It’s impossible to go into the details of the countless specific problems 365 employees solve every day, so I’ll relate one. Leonor « Leo » Tena, daughter of the founders, who also works at 365, kindly told me about it during a video call. « In the factory, they have different sections. One of them takes the bread from the fermenter and puts it in the oven. At this step, the size was a frequent problem » she explains. As a result, the baguettes coming out of the oven were tiny and dry. Why? This was because the fermentation was going wrong. Why? Because the bread had to have a specific size to fit in the fermenter. Eventually, one of the bakers got fed up with the defect. « At first the baker used cardboard that he cut as a guide to check the size of the baguette. The manager said it was a good idea and they made a metal one. Now it’s even used for types of bread », Leo told me.

This specific example does not seem much, but people are solving these kinds of problems every day. In other words, gaining 1% every single day compounds exponentially to 700% over 200 work days. With the Lean exercise of reducing inventory, these problems become sufficiently visible that people want to solve them, provided their managers nurture and support these efforts. And after months of effort, people felt like Lean thinking really worked. « They were doing less movement, producing the double. They saw the results; it’s easy to see the results: they used fewer hours to produce the same things. In the end, you agree with the methods », Leo summed up.

Lean thinking is now widely spread in 365, from the providers to the workshop, the shops, accounting, or human resources. This article has been fueled by a presentation and a visit of 365 during the Barcelona Lean Summit 2016. A book called The Lean Bakery, by Emi Castro has been published since.

To go further:

• this article from Planet Lean is an interesting analysis of 365
• a summary of Lean Thinking
• an article on minimizing inventory

This story was originally published by Flavian on the Theodo blog. It was updated for clarification.