Table of Contents INTRODUCTION...........................................................................................................................3 MAIN BODY..................................................................................................................................3 PART 1............................................................................................................................................3 Comparative four Vs Analysis.....................................................................................................3 Comparative Performance Objective Analysis............................................................................5 Design Analysis...........................................................................................................................7 PART 2............................................................................................................................................7 Overview......................................................................................................................................7 Starbucks Global operations strategy and surrounding macro environment...............................8 Key requirement, capabilities and challenges (need changes)....................................................9 Analysis and evaluation of Quality Management in Starbucks.................................................10 Recommendation.......................................................................................................................12 CONCLUSION..............................................................................................................................13 REFERENCES..............................................................................................................................14
INTRODUCTION Administration of business process to create highest level of possible efficiency within the organisation is known as operations management. Operations management is concerned with converting raw material into goods and services in the best possible way in order to maximize the profit of the organisation. This is concerned with utilization of various organisational resources in form of staff, material, equipments and technology. This report will discuss operations management in context of Starbucks. This is American multinational chain of coffeehouse and roaster reserves. The company was founded in 1971 and is headquartered at Seattle, Washington, U.S. This report will discuss various aspect of operations management these are four Vs of operations management which are volume, variety, variation and visibility. Analysis of performance objectives of Starbucks and Griggs will also be discussed in the report. Quality management, the act of overseeing activities and task needed to maintain a desired level of excellence. Its various aspects in Starbucks and its operations management which includes global operational strategy, key requirement, capabilities and challenges etc will be discussed in the report. MAIN BODY PART 1 Comparative four Vs Analysis Four Vs analysis refers to four Vs of operation management. This considers that all operations processes have that all of them take inputs and transform them into output. The inputs are, input, material, knowledge, capital, time and equipment (Hill and Hill, 2017). The difference is that they do it in different ways, the main difference is in, Volume, Variety, Variation and Visibility. Here four Vs of Starbucks and that of Greggs is being discussed. Four Vs of Starbucks Volume-This refers to size, magnitude and rate of production is Starbucks. In this context Starbucks believes in cost efficient operations and along with this Starbucks is a coffee chain
which needs it to prepare and produce its products at the time of offerings. This means that volume of production in Starbucks depends on the demand by the customers. Other than this Starbucks also follows the past trends on the customers to ensure availability of the required resources in the stores to avoid shortage and surplus which might cost Starbucks. Variety-Starbucks offers wide range in its products which are coffee, baked items, sandwiches and smoothies (Slack, 2018). In all this products Starbucks offers various varieties and along with this customers can also order as per their specific requirements and they are fulfilled by the Starbucks. Variety in coffee of Starbucks is a highlight in this context. Variation-Starbucks offers variation in products as customers are able to order as per their specific requirement and they are fulfilled at Starbucks.The requirements of the customers might be different in terms of what is regularly offered by the Starbucks and somewhat different from their product standards but customers are provided what they are willing to have. this is because customers at Starbucks are considered to be of utmost importance. Visibility-Starbucks believes in giving its customers an experience above the products and services they receive from the Starbucks (Slack, 2018). This is perfectly visible through customer service of the Starbucks. The visibility also reflects in form of design of the stores of the Starbucks. Four Vs of Greggs Volume- Volume of the Greggs remain and needs to be high as the products of the Greggs are not only available at the stores but they are also delivered and this requires to keep high volume which can be immediately ready to meet unpredicted customers demand. Variety- In terms of food Greggs offers wide variety and their offering extend from traditional fast food and bakery items. Greggs offer vegan products and breakfast range, sausages and seasonal food range and this means that they offer variety of food products. Variation- Products of the Greggs are offered as per their specific menu and this is why variation in the products of Greggs is limited (Bromiley and Rau, 2016). Though the products are available in wide variety but the scope for variation is limited in Greggs.
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Visibility- Greggs focus on providing best customer experience and its teams are also first class in terms of support. This is visible to customers and this is the reason that Greggs have managed to become best and largest bakery chains in UK. The above models of four Vs suggests that there is high degree of difference in four Vs of both the companies and the difference the main difference lies in Variation and variety of the products of both the companies. Comparative Performance Objective Analysis Performance objectives refers to something which companies want to achieve regarding their performance and here performance objectives of Starbucks and Greggs are being compared. Performance Objectives of Starbucks are; Encourage a great working environment ThisobjectiveofStarbucksrelatedtoitsorganisationalperformancemeansthat Starbucks wants to achieve great working environment. Great working environment allows organisation to achieve maximum profitability and best contribution of employees in the organisational performance (Wu, 2017). This collaboratively improves performance of the organisation in terms of quality and customer satisfaction. Offer-high quality products This is another performance objective of the Starbucks this helps in improving and continuing quality performance of the Starbucks. This is important for Starbucks and at the same time image and reputation of the company is also based on high quality products of the company. Provide Goods which to meet customer desire and what customer need Starbucks has one of the important performance objectives and considers that customers should be provided what they need instead of what Starbucks can and do provide. This is why Starbucks provide their products in customized manner which has been demanded by the customer (Marie, 2019). To achieve this objective Starbucks has also employed effective policy regarding warranty in which customers can easily change and replace their products. Objectives of Greggs are;
Great Tasting Fresh Food This is performance objective of the Greggs that they want to provide food which is great in taste and along with this they also want to provide fresh food to their customers. Tasty food which is provided by Greggs is also affordable in terms of price (Copland, 2017). Greggs also has objective that its classic and traditional favourite cannot be beaten and remain same. Greggs also has objective in which it can provide food according to changing trends and taste of the customers that it can possibly keep its customers. Best Customer Experience Customer satisfaction and customers are centre of the focus of the business and likewise Greggs also keep its customers in centre of its performance. Greggs has this objective and the company considers that it want to take its operations where its customers are and making sure that its shops are open when its customers need it. Greggs also has objective to provide best and modern shopping experience to its customers. In this order Greggs has plans that they are able to provide and deliver its goods in fast and friendly service. Competitive Supply Chain Supply chain is important part of the performance of the business and this is also important for Greggs. In this context objective of the Greggs is to stand out from the crowd because they consider to be able to create the best things to excite their customers. The objective of the Greggs is to be more efficient and to minimise our impact on the environment and at the same time shape the growth of the Greggs. Above identification and discussion of the objectives of Starbucks and Greggs suggest that as their markets are different their objectives are also different. Markets of Starbucks are middle class and upper middle class people who are capable of buying the premium price and high quality products (Song, Gu and Ren, 2016). On the other hand Greggs’ market is high streets where it can sell its variety of the products at the affordable price. Though, both the companies keep the customer satisfaction at the priority in their objective.
Design Analysis Design analysis includes analysing customer service process and layout of the stores of the Starbucks and Greggs. Customer service at the Starbucks is a part of its quality management, because premium stores focus on their customers service like other areas of service and like their product offering (Zhang and et.al., 2016). In relation with In relation with design and layout of the Starbucks stores they are designed in sophisticated layout and located at posh and urban areas with middle and upper middle class population because of its offerings and cost. Customer service process of the Greggs is becoming increasingly modern and sophisticated so that they can provide modern experience to customers shopping. Along with this they also provide customers with on the go food and delivery to home so that they can be catered where they want to (Azriuddinand et.al., 2020). In relation with operations process this requires Greggs to keep its volume of material and products high so that they can cater unpredicted demand of the customers in form home delivery. Other customer services are offered like enquiry are offered through online mediums and platforms. Design and layout of the Greggs stores are in local bakery style shops. Shops are mainly located in high streets and now they are taking the format of shops on the go. PART 2 Overview Quality management is overseeing activities and tasks in operation management to ensure that all the tasks in operation of the Starbucks needed to maintain desired level of excellence. Quality management includes determination of policies related to quality assurance and quality maintenance policy, creating and implementing quality planning and assurance and quality control and quality improvement. Quality in Starbucks is given utmost importance and this is why they uses several quality systems. The main objective behind the quality management is to ensure long term success of the organisation as this includes continuous improvement in the
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quality. Starbucks employ its quality management in various forms and first level in quality management starts with baristas on the floor. Later random check is carried out through district manager they make random check and ensure quality. Later, Starbucks also include third party quality check and in this process a company is used by Starbucks to ensure quality of the products. Starbucks Global operations strategy and surrounding macro environment Global operation strategies are those which have been adopted by the Starbucks in international operations of the Starbucks (Taecharungroj, 2017). Quality management in the Starbucks is given most important place and company adopts this strategy in international process. Starbucks communicate it as a premium products and this requires that quality of the company products is high. High Quality and premium product is the global strategy of Starbucks and this is how it operates in the global market. The macro environmental factors which affect global operations strategy are; Political- Starbucks operates in food and beverages industry and this is why it has to follow regulations that affect the food and beverages operation in various countries. This includes food safety standards of different countries and along with its own safety and quality standards company has to follow all these standards as well which affect its operations in global market. Economical- Starbucks provide high quality and premium products and this is why it gets affected by the economic condition of a country in its global operations. Starbucks has to modify its quality standards when operating into a country whose economic condition is not very good. This also needs to place itself in such way that people can consider it a premium product. Social- In context of global operations this factor affect the most operations of the Starbucks (Shamim and et.al., 2019). The factors which affect operations and its success are perception of the people of a particular company for the products which are being offered by the Starbucks. This means only when people have positive perception towards fast food and drinks which are offered by the Starbucks its operation will be successful. Other than this, perception of people for premium products and about premium food and drink products also affect the operational success of the Starbucks. For Example, country or culture specific where healthy food and drinks are given more importance in such case coffee will not be considered good and this is a negative
factor for the operational efficiency of the Starbucks. In such Starbucks has to offer products which are good for health and is not harmful for physical wellbeing of the individual. Key requirement, capabilities and challenges (need changes) Quality Management in Starbucks is an organised process and this is why the process of quality management has some requirements these are, Maintaining high level of product and service quality-This is first requirement in terms of quality management in the Starbucks. This is utmost requirement for the Starbucks is that Starbucks maintain high level of product and service quality (Yaqoob and et.al., 2017). This is the first requirement in the operations that products of the Starbucks are of high quality and the quality is regularly checked to ensure that the standards for quality are met by the Starbucks. Service refers to service they offer to the customers and in this regard they are required to ensure that they provide high quality of service in which customers are served with the product which is exact match of their demand and in this process it is checked that all the order are complete for the customer. Capabilities for Quality Management Procedure, Instruction and Records-Quality management in Starbucks is an organised process and this is why it is important that it is predefined procedure to be followed while quality management. Starbucks includes quality checks in its general operations and this is why it has clearly articulated instructions which are required to be followed by its employees while delivering products and service to the customers. System and People- This is another capability in operations of the Starbucks regarding quality management (Lo and Yeung, 2018). People in Starbucks are perfectly aware about the quality they are required to maintain while providing service to customers and system of the company is managed accordingly. Operational challenge in Quality management Changing customer needs- This is an importantconsideration that customersare being provided what they need and desire along with what maintain standards of the quality. In this changing and rapidly changing customers needs are a challenge and along with that Starbucks
Starbucks as this provides premium products and affluent can afford the products of Starbucks. This will ensure that Starbucks is able to achieve cost effective results. Total Quality Management is the widely used theory in this operational area and Starbucksalsoapplythistheoryinitsoperation.TotalQualitymanagementrefersto management approach which focuses on long term success of the business through customer satisfaction. This process involves all members of the organisation and they are expected to provide their contribution in improving processes, product, and service in terms of quality which can attain objectives of customer satisfaction. This theory is adopted by Starbucks and this is why their quality management takes place in various forms and at various levels (Honarpour, Jusoh and Md Nor, 2018). The quality check and management starts with baristas at the floor on the point of sale, here baristas check that drinks are accurate and miss no drink before handling the drinks to customers. Later in second stage of the quality management, Starbucks make random check ins from its District Manager, in this district manager make random checks and talks to customers, watches baristas and do check on the quality of drink. Lastly, Starbucks also make quality checks through third party, in this Starbucks uses third party company which make checks on all its stores to check and ensure quality standards are met every six months. Total quality management at Starbucks ensure that quality standards in their stores are met. In this order and process of total quality management stores have copy of required qualification which stores must meet, this includes- Quality of Design,cross-functional team, including members from marketing, engineering, operations and other departments are responsible for quality of their design. This includes consideration of customer needs. The design refers to design of the drinks and products offered by the Starbucks. Quality of conformance and availabilitywhich means meeting specification regardless of what quality is maintained (Psomas and Antony, 2017). Field servicerefers to customer service and warranty andrepairandreplacementsofthe products of the customers.
In its operations Starbucks follows a practice of continuous improvements and quality check at the very place of offering services this helps in identifying any defect in quality quickly. Recommendation The above discussion introduced with various aspects of operational management and quality management of the Starbucks. The discussion uncovered various elements which helped and contributed in operational effectiveness of the Starbucks. Quality is the main element behind success of the Starbucks and this is added value by their efficiency in the routine process of the company. quality management and checks are not limited and this is why Starbucks managed to develop itself as a premium product around the globe. But there are some points that Starbucks can improve and work on and these are; Expansion in developing markets with modified standards of quality. InthisStarbuckscanmodifyitsstandardsofqualityindevelopingmarketsthe modification need not to be major and highly diversified but Starbucks can modify them slightly which are not clearly visible this will allow company to modify its price from its standard premium price (Siva and et.al., 2016). Slight differentiation in price not clearly visible but is able to attract more customers in the developing countries. This will allow Starbucks to grow its operations in the developing countries and later they can also increase their price when they are well established in the developing markets. This is a minor change in operations but can give long term benefit to Starbucks. Imitability of the products The products of Starbucks are premium and at the same time quality of the products is also high as a result of operational efficiency and control measures. But one factor that products of the Starbucks are imitable which means that other company can provide similar and same products this is unfavourable for Starbucks (Gutierrez-Gutierrez, Barrales-Molina and Kaynak, 2018). This can be a advantage for the low cost competitors that they are able to provide products like Starbucks at low cost. This will not only affect business of Starbucks but will also affect premium image of the Starbucks.
CONCLUSION On the basis of above analysis it can be concluded overall success of the firm and its operations depend on the success of its operations. This is why operation management is integral part of the organisational process and for organisations like Starbucks it is more important as the organisations are involved in manufacturing and for Starbucks quality is utmost important. Starbucks can achieve its success only when Starbucks has its successful operation management. Later operations management and its important part quality management was discussed and quality of the products and service of the company. In the order of discussion of the quality management of the Starbucks its quality management was also analysed and evaluated and resulted that resources and all the processes in the Starbucks are well managed to achieve the utmost level of quality.
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