Starbucks Operations Management Analysis

This assignment requires you to thoroughly analyze the various operational strategies employed by Starbucks. You'll delve into aspects like their complex supply chain management, efficient production processes, rigorous quality control measures, and commitment to exceptional customer service. The analysis should explore how these strategies contribute to Starbucks' overall success and competitive advantage in the global coffee market.

Operation Management and Service
Excellence
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TABLE OF CONTENTS
INTRODUCTION................................................................................................................................1
TASK....................................................................................................................................................1
1. Quarter Horse Coffee Shop..........................................................................................................1
2. Operation management process supports the Quarter Horse Coffee Shop..................................3
3. Application of 5 Performance Objectives on Quarter Horse Coffee Shop..................................5
4. Supply chain of Quarter Horse Coffee Shop...............................................................................7
5. Compare and contrast the quality processes of Quarter Horse Coffee Shop with Steam Yard
Coffee Shop.....................................................................................................................................8
CONCLUSION....................................................................................................................................9
References..........................................................................................................................................10
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TABLE OF FIGURES
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Figure 1: Quarter Horse Coffee Shop...................................................................................................1
Figure 2: Operation management process of Quarter Horse Coffee Shop...........................................3
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INTRODUCTION
Operation Management means designing, operating and controlling of the transformation
process that is used to convert various resources into service or good. Every successful company
knows the importance of operation management because of its various reasons (Operation
Management, 2016). Operation management effectively manages the productivity of business
operations and it leads to the growth of economic condition of the firm. Basically, main aim of
operation management is to maximize efficiency during the production of goods and services that
effectively completes the needs of customers (Anderson, Anderson and Parker, 2016). On the other
hand, service excellence means not only to exceed the expectations of consumers but also deliver
what is promised and deal with queries and problems of service users. In recent economic recession
period, it is a hot topic for the organizations. Now, main aim of the companies is to become more
customer focused and deliver service excellence. It gives different significant advantages and works
as a performance differentiator for both the public and private organizations (Why Service
Excellence is important?). Both the operation management and service excellence are inter related
and dependent on each other. To understand the importance of these terms within the business,
Quarter Horse Coffee Shop of UK is taking into consideration (Quarter Horse Coffee Shop, 2016).
TASK
1. Quarter Horse Coffee Shop
Figure 1: Quarter Horse Coffee Shop
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Quarter Horse Coffee Shop is one of the most popular small business organization of UK. It
was founded in 2012 in Oxford and now, it has started it’s another coffee shop at different location,
Birmingham. It is a small business firm and mainly deals in coffee industry (Quarter Horse Coffee
Shop, 2016). To roast some of the best coffee in the UK is the major aim of Quarter Horse.
Company has offered a wide range of coffee such as whole bean coffee, micro-grounds instant
coffee etc. In some areas, organization has installed automated system that shows combination of 50
plus possible beverages which includes various kinds of coffee. During placing and receiving the
order, customers can play games. In addition to this, Quarter Horse Coffee Shop has also offered the
discount and other promotional offers to the consumers who win the loyalty programs (Quarter
Horse Coffee Shop, 2016).
In the present time, more than 200 employees are working in Quarter Horse Coffee Shop at
two locations. Rather than coffee, enterprise also serves smoothies, tea, baked goods and
sandwiches to the service users. On the other hand, organization reduced its paper napkin size as
well as carry bags. With the time, Quarter Horse Coffee Shop has started to focus on minimizing
waste during the coffee making process (Quarter Horse Coffee Shop, 2016). In this direction, one of
the most important steps of firm was related to start the use of recyclable and reusable cups for the
coffee.
Nearly, 120 to 200 customers are served by Quarter Horse Coffee Shop on the daily basis in
two Coffee Shops of UK. Although, average capacity of consumer’s sitting in outlet is about 50 to
60. Sitting arrangement of the tables and counters is in such way that consumers can enjoy their
coffee in an effective manner. Ambiance of the coffee shop is very graceful and attractive. Along
with this, for informal office meetings, parties etc. it has offered different sitting arrangement
(Quarter Horse Coffee Shop, 2016).
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2. Operation management process supports the Quarter Horse Coffee Shop
Figure 2: Operation management process of Quarter Horse Coffee Shop
Nature of operation management for every small business company is different and variation
is dependent on the nature of service or product. In this context, operation management process
plays an important role (Burke, 2013). Generally, it is also called Input-Transformation-output
process where input resources are transformed into outputs. To get desired outcome, quality of
inputs are continuously monitored. This process has three elements such as inputs, transformation
process and outputs (Nakayama and et.al, 2012). Operation management provides systematic
direction and control of the procedure so that transformation of input into the expected output can
be appropriate. In the process of operation management, inputs are capital, equipment, materials,
labour, facilities, time, experience, knowledge, suppliers etc.
In transformation process phase, three things are included such as design, improvement,
planning and control etc (Niknam and et.al, 2012). These three elements are interdependent and
interrelated. Here, an operation strategy has prepared for the conversion of inputs into outputs. On
the other hand, in output section, it includes final outcome such as product or service which meets
the needs of customers. In case of Quarter Horse Coffee Shop, during preparing the coffee, business
uses transformational model. During making coffee, inputs are coffee beans, filter, water, milk and
electricity (Baziar and Kavousi-Fard, 2013). Transformation process conducts in roster which is a
coffee maker. Result of this entire process is a good quality coffee.
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In operation management, there are various types of processes and these are used for
different purposes. Job shop is one of the operation processes which is used for manufacturing of
one or few of quality goods (Slack, 2015). Main characteristic of this method is that products are
preparing as per the specification of end users as per the pre-fixed time and cost. Variety of these
types of commodities is high but low in volume (Goldense, 2015). Example of such type of method
is print shop. On the other hand, in batch production process, manufacturing of the products is
limited in volume but it conducts in regular intervals. Production duration of such type of goods are
shorter and machines for this are flexible in nature. Cost and manufacturing time in batch
production are lower as compare to job production method (Chen and et.al, 2012). The common
example where this process generally follows is bakery shop.
Mass production is a type of operation process in which manufacturing of the commodities
is conducted in sequence and characteristics of such kind of goods are standardized (Fuggetta and
Di Nitto, 2014). It is used in that case when volume of the products are large and cycle time of
production is short. Manufacturing line in mass production is perfectly balanced. Material handling
process is half automated. Beside this, in continuous production process, manufacturing facilities
arrange in sequence from beginning of operation to the finish products (Chaouachi and et.al, 2013).
Flexibility of the equipment and machines in this process is zero but handling of material is fully
automatic. Sequence of operations is predetermined.
Quarter Horse Coffee Shop follows job shop operation or production process during coffee
making. The reason of adopt this method is that coffee shop offers a wide range of coffees. It uses
dedicated special purpose machines which has high production capacity and output rates. (Royalty,
2010) Another reason of using job shop method is that coffee is prepared by Quarter Horse Coffee
Shop as per the specification of consumers within the prefix time as well as cost. Advantage of
following this operation process is that employees of the firm can get opportunities to show their
creativity and innovative ideas during preparing and serving of coffee (Quarter Horse Coffee Shop,
2016).
In the present time, Quarter Horse Coffee Shop is working on reducing the impacts of
business operations on environment by following various recycling and waste minimizing
techniques. In this direction, company is now using reusable cups which are preparing by the
papers. After the use, these usable cups are sent for the recycling process where new paper cups are
developed from already used containers (Royalty, 2010). It is the most important element of waste
reduction strategy of Quarter Horse. Along with this, waste generated in coffee shops such as
cardboard boxes, syrup bottles, coffee grounds, milk jugs etc. are also sent for recycling with an aim
of minimize the waste and its impact on environment. On the other hand, for quality control of
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coffee, Quarter Horse Coffee Shop has used different kinds of quality control systems among which
one is control chart where sample of units is taken from random process and outcomes are drawn on
chart. By this, percentage of defects is determined for sample. Along with this, Six Sigma and Lean
System are also used by the company for quality control from the procurement of coffee beans to
serving it to the customers (Recycling and Reducing Waste, 2106). This combination has helped out
the firm to minimize the wastage and maintain the quality of product at entire process.
3. Application of 5 Performance Objectives on Quarter Horse Coffee Shop
When a company prepare its corporate strategy than it is needed to determine or set different
operational performance objectives to meet the define tactic. Basically, it is a statement of particular
expected outcome related to a process. There are five operational performance objectives: quality,
speed, flexibility, dependability and costs (Quarter Horse Coffee Shop, 2016). Explanation of these
performance objectives are as follows: Quality: Most of the organizations are considering it as important element for the success.
Basically, quality defines the durability of goods and services. Quarter Horse has consider
two points when setting quality as a performance objective. First is external affect that is
customers who are consuming the products of company on frequent basis (Nordmeyer,
2016). If they have not complained about anything else of the services than it can be assume
that they are happy with the quality of coffee. Second is internal where quality has affected
the operation of Quarter Horse Coffee Shop. Quality management process of company has
high which reduced the chances of mistakes (Odagiri and et.al, 2016). After considering all
these two factors of quality, the impact on organization operation is it saves the cost,
increase the dependability as well as responses of the customers towards the services. Speed: In another words, it can be said as Speed of response. It can be define as time
between when an internal or external consumer request for a product or service and get it
(Garcia, 2015). In the context of Quarter Horse, speed of response of the company to serve
the customers is very high. During setting of this as a performance objective, firm has
considered external and internal impact of speed on the operation (Moore and et.al, 2015).
In external, organization has believed that the quick response to the service users order is
increase the chances of revisiting of them which is good for the business. On the other side,
in internal, the working speed of staff towards the response of customers has fast and it has
reduced the cost of preparation of coffee (Bettencourt and et.al, 2013). For example,
employees quickly response to collect the orders of customers from their table and meet it
within the minimum time than it reduce the cost of preparation.
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 Dependability: It means being on time or in other words when customers get their products
on time. For Quarter Horse Coffee Shop, it is most important performance objective to meet
the business goals. Some time, the late delivery of the coffee to consumer table can be
increase his or her irritation (Wallin and et.al, 2012). On internal basis, dependability can
affect the cost of operation because the delay in meet the user’s needs decrease the
probability of returning of the consumers towards the coffee shop. Flexibility: It means to be able to change the operation in some way. Quarter Horse has used
different types of flexibility during the preparation of coffee. Company has set this
performance objective for achieve the aim of business. For this, product flexibility, mix
flexibility, volume flexibility and delivery flexibility has made the operation of organization
has more effective and meet the customer’s needs (McSHERRY and et.al, 2012). With the
help of this, the new coffee drinks have developed and made the operation more flexible.
 Costs: It is one of the most essential performance objective which means variation in unit
cost because changes in volume of production of a product or a service. To achieve this
performance objective, Quarter Horse Coffee Shop has used different machines and
equipments to reduce the preparation time of coffee (Akter and et.al, 2013). Although, it has
offered wide range of products to its customers but they have in lower volume which raised
the cost of the coffee per unit.
From the above stated performance objectives and Quarter Horse actions towards to achieve
it, it has found that there are still some loopholes in operation which require more improvements. It
will help the company to gain competitiveness in the market (Hunting and et.al, 2016). Some
improvements in operation process of Quarter Horse are as follows.
 Reduce the short delivery time and better response to customers
 Increase the reliability in products and services (Quarter Horse Coffee Shop, 2016)
 Frequent launch of new products and services
 Increasing the number of products for customers
 Reduce the prices of the products
 Improve the knowledge of delivery items to modify the customer services
 Error free products and service in the cafe
 Minimum delivery time
 Easier Volume adjustments
 Easier delivery adjustments
 Better responses to unexpected events in the cafe
 Lower inventory and processing cost
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 Higher margins with more internal reliability
 More internal stability
4. Supply chain of Quarter Horse Coffee Shop
Supply chain is an important part of the organization because it increase the operational
efficiency of business. It also boost the speed of serving capacity of the firm because of meeting the
customer’s needs. There are some reasons of using supply chain in a business and these are varying
with then nature and size of the organization as well as characteristic of products (What is the
Importance of Supply Chain Management?, 2016). It boost customers services in terms of makings
sure that right goods should be deliver to the consumers with proper quantity. Rather than this, the
companies are also getting the benefits of supply chain because it has reduced the overuse of large
fixed assets such as plants, warehouse etc. It has also raised the cash flow within the enterprise
because fast delivery and selling of the products increase the profit of business (Peterson and et.al,
2013).
Quarter Horse Coffee Shop is one of the growing small business firm in the area of coffee
and to convert coco beans in a field to a steaming cup of delicious coffee, an effective supply chain
plays an important role. The aim of the organization is supply best coffee drink to its customers at
lower prices with good quality and taste. In supply chain of Quarter Horse, coco beans and milks
come from different suppliers. The raw materials send to roasting, manufacturing and packaging.
Firm has own six roasting centres coco beans have prepared. The entire process of beans
preparation, manufacturing and its packaging has arranged in a series of well-designed production
process. This procedure has same in each and every roasting process centre (Quarter Horse Coffee
Shop, 2016). Once the coffee beans have prepared than Quarter Horse has sent them for the delivery
to its Coffee Shop.
Basically, supply chain model of Quarter Horse Coffee Shop has based on integrated make
to stock supply model. It has track down the demand of coffee drink in real time and meet the
requirements with the help of different distribution channels. Quarter Horse uses technological
based automated information system for production, monitor to real time demand, schedule the
production plans and allow the modifications if needed. To make the coordination between supply
chain level and multiple distribution channels, firm has used updated demand information, recent
inventory level of coco beans, storage capacity, scheduling of transportation etc (Quarter Horse
Coffee Shop, 2016).
To stream line the supply chain and logistic process in six continents, coffee beans are store
in regional central distribution. The size of these warehouse is from 100,000 to 100,000 square feet.
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These are recently managing by third party logistic companies. To measure the effectiveness of
supply chain system, Quarter Horse Coffee Shop has used simple scorecard system (Burke, 2013).
With the help of this, it becomes easy to reduce operating costs as well as improve the supply chain
process.
In present time, Quarter Horse Coffee Shop tries to make balance between supply chain
demands and sustainable corporate practices (Nakayama and et.al, 2012). At the time of buying the
coffee from the suppliers, company has considered ethical practices such as responsible coffee
purchasing practices, provide farmed support centres, organize farmer loan programs, forest
conservation etc. In addition to this, organization has also set some social responsibilities standard
for the suppliers with the intention of improving business practices (Niknam and et.al, 2012). If
there is any kind of issue occur while working with the suppliers than Quarter Horse Coffee Shop
stop doing business within them until the problem is not resolve.
5. Compare and contrast the quality processes of Quarter Horse Coffee Shop with Steam Yard
Coffee Shop
Quality management process is set of procedures which are generally followed by the
organization in order to ensure that the outcomes produced by the operations are fulfil the purpose
of manufacturing or not (Baziar and Kavousi-Fard, 2013). Under this method, some quality targets
have set that able to meet the requirements of the customers regarding the quality of the products. In
the case of Quarter Horse Coffee Shop, organization has mainly focused on quality coffee beans. At
the time of sourcing of the material from the farmers, firm has set some quality gateways. On the
basis of this, the entire quality checking process has done (Fuggetta and Di Nitto, 2014). For this,
Quarter Horse Coffee Shop has preferred to purchase coffee beans from those farmers use
sustainable and appropriate process of been farming.
On the other hand, Steam Yard is one of the small Coffee Shop of UK which is one of the
major competitor of Quarter Horse (Steam Yard, 2016). Steam Yard Coffee shop has followed check
sheets for quality process where the inspection procedure has conducted by company in order to
determine the quality issues in the raw materials (Chaouachi and et.al, 2013). On the basis of this,
the gather information and data has plot on control charts to determine the process of manufacturing
of beans are under control or not. If the quality process is goes beyond the set control and
specification limits than various actions have taken by the quality teams.
Another side, quality of design has used by Quarter Horse for managing quality process in
which the needs of the customers are taking into the consideration (Odagiri and et.al, 2016). The
process of quality checking has design in such way that it has maintained the taste and aroma of
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coffee at entire process(Steam Yard, 2016). But Steam Yard Coffee has used Cause and effect
diagram to analyse the quality issues and maintain the quality of the coffee drink throughout the
process. On the basis of the determine problems in the causes in quality, the effects and major roots
of these issues have identified (Moore and et.al, 2015). After this, actions have taken to resolve
them. If the same problem has occurred during the quality process than already defined solutions
have imposed to solve it. In the case of Quarter Horse, for maintain the quality process,
benchmarking method has used. It is simply a quality standards which is set by performing
organization across its top competitive firm (Bettencourt and et.al, 2013). On the basis of this, the
best practices of quality has determined and develop some ideas to solve quality issues. Along with
this, it also assist in measuring the performance of Quarter Horse Coffee Shop.
But on the other side, Steam Yard Coffee Shop has used flow chart process to represent the
relationship between different steps of quality process. It has helped the company to determine the
quality issues and their causes (Wallin and et.al, 2012). On the basis of the outcomes, the actions
have taken by quality team to resolve them to reduce its impact on operations of company.
CONCLUSION
From the above research, it can be concluded that operation management and service
excellence has the essential part of the organization. It has directly made the impact on various
manufacturing and operational activities of the firm. Quarter Horse has a most leading company in
the area of coffee and it had delivered best coffee drink to its customers. There are various operation
management process that have followed by the companies on the basis of the nature of the business
and characteristics of the goods and services. Quarter Horse Coffee Shop has adopted job shop
operation process because of its several tangible and intangible benefits. Organization has imposed
five performance objectives: speed, quality, durability, flexibility and cost during manufacturing,
packaging etc. operations. But still are some areas where improvements are needed to the company.
On the other hand, supply chain management has also played an important role in Quarter Horse
Coffee Shop to perform in-sourcing and out-sourcing operations. Various kinds of models and
practices have used by enterprise to make the coordination between the corporate responsibilities
and real time demand. On the other hand, Steam Yard Coffee shop and Quarter Horse Coffee Shop,
both has followed different quality process concepts. But both has tried to manage the quality of the
coffee at the user end and meet the satisfaction level of customers.
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