Supply Chain Management of Starbucks
By Xiaoye Zhu and Landi Fu
Starbucks is the largest coffeehouse company around the
world. It is a place where share great coffee with friends and help make the
world a little better. The first store of Starbucks is founded in 1971. From the beginning, Starbucks set
out to be a different kind of company. One that not only celebrated coffee and
the rich tradition, but that also brought a feeling of connection. Its mission
to inspire and nurture the human spirit – one person, one cup, and one
neighborhood at a time. Starbucks does not only offer different beverages such
as iced tea, latte, hot chocolate, Frappuccino and so on, it also supplies
bread, chocolate chips these deserts. Today, with more than 18,000 stores
in 62 countries, Starbucks is the premier roaster and retailer of specialty
coffee in the world. In fiscal 2013, Starbucks had more than 3 billion customer
visits to them more than 19,000 stores in 62 countries. Meanwhile, it plans to
open 1,500 net new stores in 2014.
There
are three objectives that are the unique supply chain of Starbucks. First of
all, reorganize its supply chain organizations. According to Gibbons who were the vice
president for Starbucks, that involved taking a complex structure and
simplifying it so that every job fell into one of the four basic supply chain
functions: plan, source, make, and deliver. In
addition, reduce its cost to serve stores and improve executive. As part of that effort, the
sourcing group worked on identifying the cost drivers that were pushing up
prices. Meanwhile, the manufacturing group developed a more efficient model for
delivering coffee beans to its processing plants, with the goal of
manufacturing in the region where the product is sold. It can reduce the
transportation cost and lead times. Finally, lay the foundation for
future supply chain capability. Starbucks creates one world, one logistics
system. It ships the rights things to the right places. Thus, it earns the
company’s confidence.
As we
all known, the company's supply chain is facing a double challenge because of
its rapid growth and economic hardship caused. Starbucks in 2008, his role is a
difficult time. At that time, Starbucks store manager to complain, Starbucks
delivery service is not enough and they didn't spend enough attention in store
service. Although it is widely spread in the area of production,
transportation, distribution, logistics make up the bulk of Starbucks because
the company's operating expenses ship so many different products around the
world, it is proposed to obtain the control of the supply chain group a
daunting challenge. Therefore, they believe that increasing the supply chain
such links to be his top priority.
In fact,
Starbucks created a new approach to cooperation with external partners. For
example, the company has a reputation " to create a contract that almost
let the hands of their third-party logistics providers, and now, in order to
allow greater interests of the company, which seeks to build closer
relationships with key suppliers, which began positioning themselves People
within the distribution center, to keep watch and ISP operations and strengthen
closer relationship. They were convinced their leadership team and believe that
the spirit of cooperation between them. After the restructuring of the supply
chain functions, departments and turned his attention to supply chain
transformation second goal: to reduce costs and improve efficiency. As this
part of the Procurement Working Group efforts in identifying cost drivers are
the factors pushing up prices.
Starbucks
supply chain has been completed, just to keep up with in the store number of
stores and other fast-growing pace. They developed a more efficient mode of
delivery of coffee processing plants and manufacturing its target sales region.
Expansion of such a dizzying speed, it can cover a lot of mistakes. Meanwhile,
in another aspect, Starbucks is working to create a green supply chain to be
more environmentally friendly and healthy living and attitudes, their mode by
choosing the best equipment and service partners, and it has been looking for
its history of involvement in sustainable products extends to the way it gets
the commodity markets.
As a
result, Starbucks has become a lot better cooperation with green and
sustainable human development. Additionally, Starbucks needs of most people, so
they are now focused on the discovery and cultivation of talent development
talent. Since the beginning of Starbucks supply chain transformation, the
company 's key short-term engineering and transport management skills very
important because they are a key factor in the introduction of talent and now
they the right talent and the right technology infrastructure to ensure the
industry by turning around.
Video：
https://www.youtube.com/watch?v=83yInyY1KLs
References：
http://www.starbucks.com/about-us/our-heritage
http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome
(FY13 Annual Report)
Transportation is a key process in the logistics chain, which is involved at every stage, right from the manufacturing of the product, to its final delivery at the required location.
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