Operations Management of Starbucks: Challenges and Recommendations

OPERATIONS MANAGEMENT
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Executive Summary
Operations Management includes processes and activities of an organisation which is used to produce
products and services. Starbucks is a leading global coffee and beverage company, which aims at
integrating highly effective and efficient operations management processes. In the current analysis OM of
Starbucks evaluating key decision areas of the Company is integrated. While evaluating the key decision
areas in Operations Management of the Company, various challenges have been identified. In order to
overcome such challenges, certain recommendations are provided so that the organisation can establish its
OM in a sustainable manner.
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Table of Contents
OPERATIONS MANAGEMENT.................................................................................................................1
Executive Summary.......................................................................................................................................2
Table of Figures.............................................................................................................................................3
1.0 Introduction........................................................................................................................................4
1.1 Company Details and Background......................................................................................................4
2.0 Operations Problem...........................................................................................................................5
3.0 Recommendations for Improvement..................................................................................................9
4.0 Conclusion.........................................................................................................................................9
5.0 References..............................................................................................................................................10
Table of Figures
Figure 1: Starbucks Coffee Operations Management Process Map.............................................................6
Figure 2: Global Map Showing Centralized Innovation................................................................................8
Figure 3: Starbucks Sustainability................................................................................................................9
Figure 4: Starbucks Global Stores..............................................................................................................10
Figure 5: Starbucks Supply Chain Distribution Network............................................................................11
Figure 6: Starbucks Supply Chain...............................................................................................................14
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1.0 Introduction
Operations management (OM) includes the activity of management of resources that are used for the
purpose of production and delivering of products or services (Spring & Araujo, 2014). Developing a
competitive operations management can create competitive advantage for the Company, and it includes
the firm’s infrastructure, technology, human resource management and procurement. In the current
discussion operations management for Starbucks Coffee for a standard coffee is undertaken. A detailed
operations management process includes all transformation that is incorporated for making the input
products into the output (Oltra & Luisa Flor, 2010). It encompasses equipment, fittings, and staff for
converting raw materials into finished products. A process map is used to depict various parts of the
process of an organisation for creating a product or service. A process map allows the process view of
OM activities. The scope of OM includes organisation and coordination of activities within the
organisation’s scope such that it can meet its customer’s needs (Brown, Squire & Lewis, 2010).
Organisation’s need to match with the growing trends of digitalisation, globalisation, servitisation and
sustainable operations, there is needed a resilient and dynamic approach for system design and operations.
1.1 Company Details and Background
Starbucks Corporation is an American coffee chain company with headquarters in Seattle, Washington,
U.S. The company founders include Jerry Baldwin, Zev Siege and Gordon Bowkar. The Company has
various products which include coffee-beverage, tea, smoothies, baked goods and sandwiches, and it
serves worldwide areas. The Company’s revenue is US$22.387 billion and net income of US$2.885
billion. It employs 238,000 employees world over. The coffee chain store is well-known for its taste and
high quality of roasted coffee. The Company makes us of automated coffee machine for safety and
efficiency of coffee manufacturing.
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