Operational Management and Service Excellence at Starbucks - Report

This report offers a comprehensive analysis of Starbucks' operational management and service excellence, focusing on a specific London location. It begins with an introduction to Starbucks, outlining its global presence, product offerings, and target market. The report then delves into how operational management processes support the Starbucks shop, examining the input-output model and key aspects such as quality management, product design, and timely service. The analysis extends to performance objectives, including speed, cost, quality, flexibility, and dependability, along with recommendations for improvement. The supply chain of Starbucks is discussed, highlighting its complexity and the importance of effective management. Finally, the report compares and contrasts Starbucks' quality processes with those of Costa Coffee, providing a comparative perspective on service delivery and operational strategies. Appendices include illustrations to support the analysis.

Operational Management and Service
Excellence
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................5
How operation management process support Starbucks shop.........................................................7
Performance objectives applied to Starbucks and improvements need to be made........................9
Discussing supply chain of Starbucks............................................................................................11
Compare and contrast the quality processes of Starbucks with Costa Coffee ..............................12
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18
APPENDIX ...................................................................................................................................20
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Illustration Index
Illustration 1: 5 S principles of quality..........................................................................................14
Illustration 2: Gap analysis................................................................................................................
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1. INTRODUCTION
Starbucks is an eminent coffee company and coffee house chain operating in 23,768
locations worldwide. The company serves wide range of coffee products in the form of hot and
cold drinks, micro ground instant coffee and whole-bean coffee. The mentioned series of product
line is entitled as espresso, caffe latte, VIA and even Teavana tea products. The coffee enterprise
also serves fresh juices, snacks, pastries and beverages to their respective food lovers. Many
stores offer pre-packed food items, hot and cold sandwiches along with mugs and tumblers. Even
Starbucks-brand coffee, ice cream and bottled cold coffee drinks are also sold at grocery stores.
Operational management concept helps the mentioned business entity to serve good quality of
products to target customers.
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For the present study Starbucks store in London location was selected and analysed in
order to attain effective service and operational analysis.
 Location: The small store situated on 126, Baker's Street Marylebone London was
selected for the present study. Ownership of the business: Starbucks is the public company whose ownership is
dispersed among the public through share that are traded over the counter markets. Layout: The traditional appearance and modern equipment’s made the selected site a
popular and crowded place. Capacity: The shop could accommodate 50 guests at one point of time and has arranged
extra seating for additional 10 after that.
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Illustration 1: Starbucks Baker's Street

 Customers: Starbucks is having the wide stream of customers around the globe. Its prime
focus is on the men and women belonging to the age group of 25-40. Further, it has up-
street and elite people in its customer base due to its high prices.
 Services offered: It offered full range of products including beverages, snacks and juices
to its consumers. The place was reviewed as cosy and organised by the consumers.
2. How operation management process support Starbucks shop
Operational management process are the crucial part of business activities. It helps in
transforming input into output using effective measures and approaches for the business. This
helps in developing output to sell out the final product in the market. Different measures are
adopted by the companies to attain effective and well developed business results. These
measures include total quality management method, just in time method, six sigma method etc.
every process has unique purpose and objective. It has helps business units in organizing
business operations and control organizational cost for business growth. (Refer to 7 waste model
in Appendix (A 2))
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Illustration 2: Input-transformation-output model
Starbucks has effectively adopted the input output model for managing the business
operations of the company. It has helped the business unit in creating an effective and well
developed impact on consumer retention and organizational growth as well. The different
aspects of the model include different planning and management functions: Input: This is one of the most significant and crucial part of the process. Quality and well
planned input helps in effectively designing the process and attain the set organizational
results. Starbucks has adopted well managed input measures to attain quality output. Raw
material used by the business unit is quality ascertained which helps the company in
providing quality output. In addition to this the employees are trained and developed to
attain quality results and output. The physical resources implemented in the business are
of standardised quality and the business adopt effective planning and development
measures for attaining quality organizational results.
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 Environment: The company keeps a close check on external factors such as consumer
needs, suppliers, employee’s capabilities, technological factors etc. in order to ascertain
the product standards and manage and satisfaction level of the buyers. For example, the
filters used in the coffee machine are of standard Starbucks quality which helps the
business unit in managing uniformity in taste and quality and quality. In addition, these
factors support the organizational planning (staff, material, stock etc). Transformation system: Starbucks has implemented standardised machineries and
equipment’s to attain the organizational output for the business. Moreover, trained team
of employees efficiently operates the equipment’s for delivering expected products to
consumers. Furthermore, the storage and operations system of the store was well
managed and monitored. Monitor and control: In order to attain the business objectives of high profitability the
organization adopted the proper system of control and monitor. The stock and inventories
of the business were controlled by implementing JIT system of business operations. This
helped the business in minimizing wastage of time and resources as the business sis not
have to store the raw material for a longer time. This helped the store in saving time and
space as well.
 Output: This segment of the process focused on delivering well developed and effective
output for the business unit. The store focused on delivering high value and quality to the
consumers while managing the brand image of the company.
On the basis of the above model the operational functions of the business unit is managed
and maintained. This has helped the company in attaining effective and well developed results.
The key features of the organizational operations are attained on the basis of following aspects:
1. Quality management: The organization has developed a high service and quality
standards for its consumers. The company focuses on using quality materials for
delivering high quality output for the consumers.
2. Product and service design: The service and product design developed by the Starbucks
outlet is highly refined and structured. It provides wide range of food and beverages
services along with comfortable ambiance and supportive environment.
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3. Timely services: Staff are trained and developed to provide timely and quality services to
the consumers. The focus of the business is to minimize the waiting line and maximise
service quality for influential impact.
4. Layout design management: The layout design of mentioned company is managed in
such manner that it increases workflow efficiency. Organisational culture of the
company give supports to a warm and friendly ambiance.. The company prioritize
customer experience over space utilisation that involves more leg space for clients in the
cafes.
5. Staff training management: Starbucks outlet provides timely on the job training for its
staff in order to save time and cost and to enhance efficiency of the store as well. This
helps the company in attaining reliable and quality ascertained results which contributes
in developing brand image of the business.
3. Performance objectives applied to Starbucks and improvements need to be
made
Starbucks needs to focus on improving its performance and productivity to increase its
market share in global market. Company can use 5'S approach to measure effectiveness of
finished goods and services (Alidrisi and Mohamed, 2012). The concept of 5'S highlights five
major elements in Japanese terminology that is Seiri(Sort), Seition(Straithen), Seiso(Shine),
Seiketsu(Standardize) and Shituske(Sustain). All these factors evaluate coffee and other products
availed by Starbucks to the consumers. It describes how the business entity organises a work
space for better utility of resources. The process includes identifying and storing raw materials
used, work area maintenance and sustaining new orders. Various 5S elements evaluated by Star
buck for service quality production are specified below:
The five performance objective of the company includes:
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 Speed: Starbucks is a renowned brand for offering wide range of food and beverages to
its consumers. The Baker Street store offered effective services to its consumers with
quality performance. The speed objective of the business was well managed and
organized. The consumers were happy with organised and systematic business operations
and effective delivery system of the store. Various operational teams ensure that work is
conducted in easy manner and eliminating obstacles from the path. With the adoption of
the improvised production method and promptness in delivery, the time gap between
customers requesting the product and the same received by them is reduced. Therefore,
the concerned company is able to meet the foremost parameter of performance objective
that is speed. On time delivery of Starbucks products helps to satisfy needs and demands
of customers. However, well developed training of staff may help the store in delivering
higher and effective results for the business. Cost: As the management of cited company is aware about the fact that price is an
essential factor for determining performance objectives of the company. The store
adopted the standardised pricing measures for its products and services. The food chain in
the market offered effective and wide range of product services at standard price. This
helped the business in developing effective brand image within the market. This pricing
policy helps to increase number of existing customers for the organisations and
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Illustration 3: 5 performance objectives

maximises profit margin. Improvisation of lean management may help the business unit
in attaining better results for the business growth. Quality: The quality of products and services offered by the store were well managed ad
organized. The staff was properly trained and developed for serving quality products in
minimum time with high quality standards. Different departments of cited company led
emphasise providing better services by using advance equipment’s and technology in
availing services. The business unit focused on minimizing the errors in the products.
Quality of the product is assured with the increase in operational excellence and customer
satisfaction. In order to enhance the quality aspect, the business may implement some
effective infrastructural facilitation to enhance demand in the store. For example, light
music in the store would have helped in enhancing the value for the consumers. Flexibility: The staff of the business was well trained and developed. The store has young
staff who was enthusiastic and flexible. In addition to this the company also employed
part-time employees for managing business operations. This made the store lively,
friendly and flexible. It helped employees to build strong customer relations for the
company that will last long for many years. The resistance to change within staff was low
that encouraged management to introduce innovative and creative strategies.
Technological changes and changing scenario of market has called for the different
approaches and improvisations in the operations which is precisely inculcated by
Starbucks.
 Dependability: The store had developed a well-structured means of code of conduct and
product quality for the business. It made the organisation widely dependable and helped
in attaining quality products and services for the consumers. The standard machinery and
effective staff training has helped the business unit in attaining effective business results.
The company used dependability factor very efficiently in order to accomplish its
planned sales targets. The clients are satisfied with different product and services availed
by Starbucks.
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4. Discussing supply chain of Starbucks
Supply chain is the system adopted by the companies to manage organizational
operations and make the final product and service available to the consumer in a defined manner.
It starts from procurement of material and ends and at delivering the product to consumer.
Starbucks is a large food chain operating in more than 40 countries around the world. Supply
chain activities of the business is a complicated and tedious task. Suppliers can be considered as
important factor for success of Starbucks products and services. Starbucks need to adopt proper
supply chain management policy to attain operational efficiency.
Further, the main purpose of supply chain management is to improve trust and
collaboration among supply chain partners. With this, the mentioned venture will also be able to
improve their inventory visibility and the velocity of inventory movement. Further, less control
and more supply chain partners will lead towards the development of concept of supply chain
management. Moreover, the major objectives of the supply chain are discussed down under:
 Maximize the value so generated: With more of the supply chain revenue and surplus, the
more successful supply chain will be.
 Look for source of revenue: For Starbucks, there is only a one source of revenue and it is
there customers. Cited firm has to provide different variety products to their customers in
order to increase their revenue and profitability.
Starbucks has adopted a well-managed and effective supply chain system for the
business. It has helped the company in managing its profitability and cost for the business. The
supply chain system of the business was well managed and synchronised which helped the
business unit in attaining wide growth prospects. The store had adopted JIT system to develop
efficiency and growth aspects of the business. In order to enhance business development
measures the company attained its logistic from one supplier ie the central distribution centres of
the business. This helped the company in managing the cost and time while maintaining the
operational efficiency of the store. The CDCs of the company delivered standardised and quality
ascertained products and services to the buyers which helped in effectively attaining the business
results. In addition to this the business growth and success was also attained by successful
adoption of the mentioned process.
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