Super Six: Are the Girl Scouts Going Lean?

cookies, forever

Image by wwworks via Flickr

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It’s that time of year again.  The Girl Scouts are getting ready for their annual cookie sale.  For those of you who are not in the United States, the Girls Scouts have been selling cookies since 1917 and this annual ritual has become as American as apple pie.  Cookie sales account for over $700 million every year, nearly two-thirds of the Girl Scout annual budget.  Shelly Banjo shares that changes are coming in her Wall Street Journal article.

Girl Scout Cookie Sales

So what is different this year?  It’s back to basics as the Girl Scouts test the Super Six program.  Twelve councils will sell just 6 varieties of cookies while the rest will offer 23.   This is a great idea if you look at the numbers.  Their own website (girlscouts.org) indicates that the top 5 sellers account for 77% of all sales.  This leaves just 23% for the 17 remaining varieties.  This is a classic example of the Pareto Principle.

The Girl Scouts hope to streamline sales, speed up cookie delivery and, ultimately, increase profits.  There are other benefits to product rationalization from a Lean Manufacturing and Lean Supply Chain perspective:

  • Lower inventory costs
  • Less obsolete inventory (finished product, raw ingredients, and packaging supplies) at the end of the season
  • Longer & more efficient production runs
  • Better use of shelf space on the retail level resulting in improved sales
  • Increased focus on the most profitable items

Not everyone is convinced though.  ABC Bakers have been making cookies for the Girl Scouts since 1937. “ABC is not in agreement with this strategy and has specifically indicated they do not see the reduction in varieties as cost saving,” the Girl Scouts’ Ms. Hamaker says.  This baker is reducing waste with alternative packaging.  ABC chose to cut costs by offering a new Thanks-A-Lot cookie in plastic packaging instead of the customary cardboard box – a move that is expected to save on the cost of 150 tons of paper board.[tweetmeme]

What are your thoughts?  Will the Super Six test be successful or will the Girl Scouts be offering 23 varieties again next year?  Should they limit varieties or rely on other cost savings measures to increase profits?  What benefits have you seen to product rationalization?

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About Christian Paulsen

Christian Paulsen is an Executive Consultant with 20 years of Lean Manufacturing. Chris adds value to organizations by driving process improvement and bottom line savings. Chris intends to help others by sharing the lessons learned after a quarter century of operational leadership, marriage, parenting, and even longer as a Cubs fan. Your comments on this blog are welcome. You can also connect with Chris via LinnkedIn, Twitter, and Facebook in the right sidebar. Chris welcomes your comments. Christian's professional services are available by contacting him through LinkedIn (right side bar)
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9 Responses to Super Six: Are the Girl Scouts Going Lean?

  1. Matt Wrye says:

    My daughter sold 76 boxes this year and over 60 of them were from the super 6. She didn’t have just the super six but she didn’t have all 23 varieties either. I think it was somewhere around 12 varieties. I think the super 6 is a good idea.

    • Matt,

      That sounds like about 80% for the super 6. Your daughter is proving the Pareto Principle one more time! You point out another issue with having too many varieties. Most retailers are only going to carry a certain number of sku’s and won’t carry everything you throw at them….

      Thanks for providing a cookie sale update.

      Chris

  2. Tanaka says:

    This is not “lean” at all. This is traditional western mechanistic/reductionist thinking that is the foundation of suboptimations, decoupling of processes and mass production in western societies. The pareto principle is not a lean tool. Do not compromise with customer demand. The point of “lean” is to be able to produce variety at mass production costs. If you reduce the variety to achieve the mass production cost you’re into mass production and standardization (proccesses not products should be standardized), not lean. Furthermore you shouldn’t manage your business through year old KPI’s and quantitative goals, that is not “lean” either. Instead you should nurture relations and improve quality of processes.

    • Tanaka,

      Thank you for your insightful comments. You sound like a Lean thinker and this article was intended to get the reader thinking. I agree that Lean is not about reducing variety to achieve longer production run. I’m not trying to suggest that the Girl Scouts are truly Lean or that they are thinking Lean on any level. I would suggest that performing unnecessary change-overs to run unprofitable products is wasteful. It’s hard to tell where they should draw the line but it appears that many of the varieties account for less than 1% of the sales. Low volume, low margin items should be considered for elimination even from a marketing perspective. As Lean thinking moves beyond manufacturing and into healthcare, product development, and services, should we be thinking Lean in our sku rationalization?

      Thanks again for your comments.

      Chris

      • Tanaka says:

        Toyota and many other manufacturers have thousands of possible permutations of their product. When combining modularization together with lean the permutations severalfold and the unique product becomes the usual case while reoccurring products becomes the exception. Of course all companies to some extent rationalize customer demand since they cannot provide all varieties possible. In the ideal lean world (which even toyota is far from) variety does not arise complexity cost which means that any customer demand can be fulfilled at mass production cost (or lower). This is what nature has accomplished. Nature produces an enormous variety with not two identical humans, animals, snow flakes etc, and it does so without additional complexity cost. This is where lean wants to go, going the other direction is opposing lean. Simply speaking: If multiple varieties are causing extra costs you should improve your operations, not reduce the varieties. Cockies should of course ideally be pulled, produced to order, levelled, and customer choice should be thousands of varieties (from permutations of relatively few basic ingredients) in a perfect world.

  3. martinez says:

    the girl scouts are changing their sales because the amount of consumers that can afford these little extras is being reduced with each year that our economy is suffering.
    changes will need to be made because they want to bring more money with less sales. they are going the way of nearly every other large corp in america. hopefully things will work out for them and the organization.

  4. Tim McMahon says:

    This is a question of complexity. Is this complexity the customer is willing to pay for. Complexity does cost more. Starbucks coffee has more complexity but customers see value in this experience compared to Dunkin Donuts. Hence when Starbuck tried to simplify the process the lost customers. Also, if you look at Toyota vs GM. Toyota had much fewer models than GM. This greatly simplified the supply chain. Making it cheaper and faster to produce cars. The girl scouts should look at the number of varities and determine the right selection. I think Matt is probably right it is closer to 12 than 6 but I don’t have any data to support that claim.

    Thanks for sharing it was an interesting post.

  5. Ladonna says:

    I can only hope to find some girl scout cookies in my area this year. I so love them, but I live in the middle of nowhere and they are hard to come by.

  6. alyssa says:

    fyi a gs bakery can produce a maximum of 8 varieties. There are two official bakerys, a council can only chose selection from one of them. I think the author was confused by the many varieties that have been discountinued recently. A council is allowed to not sell some of the variaties that bakery makes.

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