Leadership and Operation Management Project: Starbucks Analysis

This project report provides a comprehensive analysis of Starbucks' operation management, focusing on various approaches like business process re-engineering, Six Sigma, Just in Time, and Total Quality Management. It explores the importance of operation management in achieving business objectives, including productivity improvement, communication, and market expansion. The report also examines the roles of leaders and managers in fostering operational excellence within Starbucks. Furthermore, it assesses the impact of both internal factors such as human resources, value systems, and corporate culture, and external factors like buyers, suppliers, and the economy on Starbucks' operations. The project includes an evaluation of these factors and a critical analysis of the applications of operations management within the company. The report concludes by summarizing the key findings and providing relevant references.

Management and Operation
Project - 2

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P4 Different approaches to Starbucks Operation Management..................................................1
P5 Importance of Operation Management in achieving business objective: .............................2
M3 Role of leader and manager in Starbucks Operational Excellence :.....................................3
TASK 3............................................................................................................................................3
P6 Impact of various business environment factors upon operations management....................3
M4 Evaluation of factors affecting business environment .........................................................5
D2 Critical evaluation of applications of operations management.............................................6
CONCLUSION................................................................................................................................6
REFERNCES ..................................................................................................................................7
.........................................................................................................................................................8

INTRODUCTION
Management and Operations are the central function of any business organisation. It
deals with production process in order to maintain the quality of product in the given time frame.
It ensures to turns input into maximum output in most effective and efficient way. It also
involves managing people, resources, technology and information (Operation and Management,
2017). It is a delivery focused process which is having operational excellence demanded by its
competitors.
This project report is based on Starbucks, which is an American coffee house chain
founded in 1971. This study basically covers the various aspects and approaches of operational
excellence of Starbucks and their core values (Chevalier and et. al., 2015). It also discuss about
how leaders and managers of the respective firm improves the skilfulness of its management by
substantially evaluating it and the impact of business environment on it.
TASK 1
P4 Different approaches to Starbucks Operation Management
It deals with optimally utilising the business resources and fulfilling the customer desire to meet
highest standards which is economically feasible. It revolves around different approaches such
as:
Business Process Re-engineering : It is a strategy which focuses on analysing the
activities of organisation and then make them to rethink about their practices in order to improve
their operational services, satisfying customer, and make competitive advantage. Starbucks can
use BPR in order to have improved fundamental interaction with their visitors and adding worth
in their supply chain process.
Six Sigma : It deals with rising the level of quality to higher defined standards and
remove the error. The fundamental approach of this is to increase process improvement and
reduction in variation. Company can accomplish their goal by setting up effective management
system through this process. Starbucks can use the mobile apps for the cash method and to speed
up its ordering level, one can order early with such app, so as to avoid the waiting time. Also
they can provide various offers on using the mobile application.
Just in time : It is a methodology aims at reducing the level of inventory in order to
avoid wastage, improve efficiency and delivery time (Chowdary and George, 2011). This
1

approach requires specialist who can foresee the exact arrival time of the product so as to remove
the excess inventory, transport goods whenever needed. Mainly, producers requires JIT in order
to manufacture raw material at different levels for the production part so that whenever they
want to start their process, they can demand for inventory. They can also uses the signals of
Kanban, which reduces the stock level in order to improve the financial output. Starbucks can
raise the standard of their production level because they generally faces the problem of low
inventory with multiple chain available.
Total Quality Management : It describes the long term vitality through fulfilling the
requirement of customer. It refers as a client focused organisation which led to continuous
growth of employees by eliminating the errors (Galloway and et. al., 2012). In TQM all members
are required to involve in gaining higher level of satisfaction from their visitors, improving the
quality of product and services, well run supply chain management, upgraded training so as to
attain its position in market in systematic way. Starbucks can gain competitive advantage by
maintain the quality of their product.
P5 Importance of Operation Management in achieving business objective:
It refers to complex set of activities which is concerned with improving the productivity and
transforming input into desired output. It mainly focuses on adding value to the firm by
managing the product and service quality.
Improves productivity : One of the key responsibility of operation manager is to
analyse the performance and work area in which up gradation is required. In order to compete
with the competitors it is necessary to modify the techniques and method to have advantage over
their rivals. Starbucks can use new technology in terms of launching mobile application to its
customers and offers various schemes to them.
Communication Coordination : When information transfers from one department to
another in the organisation correctly and quickly, it often leads to increase the capacity of the
work force. Starbucks can set up adequate computerized system to monitor the inventory issues
of their outlet. Better communication among different their different outlet improves overall
efficiency of the company.
Market Expansion : Organisation can increase their market share by enlargement of its
business operation and activities which maximized the customers (Harmon, 2015). Operation
manager can do the research in order to kn ow the advantages & disadvantages of the firm that
2

help them to compete with the external environment. Starbucks can expand their business by
opening more stores which makes their visitors to believe that it is place where they can relax
between their work and home.
Fulfilment of customer needs and wants : Customer refers as the king of market.
Therefore, it becomes the duty of any organisation to satisfy the needs and wants of the client so
as to retain them for longer period and not letting them switch to competitor's brand. Starbucks
can provide offers in terms of discount, free coffee to their regular consumer in order to gain
competitive advantage (Hristov and et. al., 2013). Also they can start various programme like
“lucky people for today”, “deal of the day” in order to attract the visitors.
M3 Role of leader and manager in Starbucks Operational Excellence :
In any organisation, Leader and Manager plays a vital role towards the success of
business enterprise. They are responsible for managing the activities related to production and
operation part. Starbucks is keeping positive momentum among their employees which
ultimately increases their profitability and market share. They focus on providing training to their
workforce so that they can work with the use of upgraded technology. Also they encourages
them to step up with their ideas in context of personnel development. The believe in rewarding
employees for their excellence performance, dealing and rectifying issues if any of them is
facing. They clearly defines mission statement to their staff so that, they can frame themselves as
a part of such big company.
TASK 3
P6 Impact of various business environment factors upon operations management
In this dynamic environment, there are many factors that influence the growth and
survival of the business into the market in indirect and direct ways. Many times, management
face many difficulties due to negative impact of enterprise environment. The factors affect both
the success as well as its profitability of the organisation (Jacobs and Chase, 2013). It also
impact upon the decision making process of the firm. Both internal and external component
affect the business environment equally and the impact of these factors upon operations
management in Starbucks are defined below:
Internal factors of business environment:
3

Human resource:
It is the most important factor for any business as it contributes in the profitability of the
company. The human resource of every organisation must be skilled and knowledgable and have
high morale and determination towards work. Sometimes management face difficulties to
directly deal with them. The HR department should have to pay attention on the quality of the
employees. The company face many problems due to inefficiency of employees. It may
influence the firm's profitability and sustainability, and due to this company cannot be able to
accomplish its goals and objectives.
Value system:
Value system refers to the ethics, policies and practices of the firm. It relates with the
mission and vision of the company. In Starbucks, the value system determines by their behaviour
with customers, staff members and the other members of the society. Poor value system can
influence the decisions of the management. It also affects the position of the company in the
market (Schroeder and et. al., 2012) . An effective value system should be adopted by the top
management of the company so as to continue grow and survive into the market and maintain its
dignity all over the world.
Corporate culture:
Corporate culture highly influence the working of the company. The relationship among
the members of top, middle and lower level highly contributes in the profitability and growth of
the firm. Coordination among those three levels is very necessary. The approach of free flow
communication should be follow in an organisation so that all the employees can freely
communicate with each and every person of the company.
Physical assets:
Facilities and assets such as technology, production capacity, machinery etc. are also the
factors which impact upon the competitiveness of the business. Proper working of machinery,
use of new technology etc. is necessary for the smooth functioning of the company.
External factors of business environment
Buyers:
4

The sustainability of the company is largely depends upon its customers. The main aim of
the firm is to create and preserve customers for long lasting. It is the responsibility of the
managers to build better customer relationship (Stadtler, 2015). The firm needs to fulfil the
exceptions of their potential customers. The operations manager also needs to focus on the
quality of the product. If the company does not offer quality products then it may loose its
customers and it will directly affect the sales and profit of the firm.
Suppliers:
Suppliers are the one who supply inputs such as- raw materials etc. so that the firm can
convert them into the end products and offer them into the market place. Good source of supply
helps in the smooth functioning of the business operations (Storbacka, 2011). The managers
needs to maintain good relationships with their suppliers also.
Economy:
Economic situation of the country also affect on the continuity and dignity of the
company. The fluctuations based on terrorism, politics, currency devaluation, etc. also drops
down the businesses.
Competitors:
There are many competitors of the company are available into the market place. To
compete with them and sustain in the market is a huge task for any firm. The operations manager
require to maintain the quality and fulfil the expectations of their customers in a better manner
than their competitors. Then only the company will survive in the market.
M4 Evaluation of factors affecting business environment
The internal and external factors affect the working of the company. The value system
influence the decision making ability of the management. If Starbucks do its business ethically,
then it impacted positively on the minds of customers. In case, the human resource are unskilled
then it will result in decreased profitability of the company and the firm may not be able to
achieve its goals and objectives. Besides that, corporate culture also impacted highly on business
surroundings (Taticchi and et. al., 2010). There should be the existence of coordination among
all the three levels, i.e., the upper level, middle level; and lower level in the enterprise. The
buyers also influence the business. The success and sustainability of the firm largely depend on
5

its customers. Not only buyers, the suppliers impact as well. Proper supply of inputs helps the
company in smooth working of its operations.
D2 Critical evaluation of applications of operations management
According to Stadtler,(2015) Operations management plays an important role in
production of goods. The main aim of operation management is to oversee the operational
activities and ensure that it will run smoothly, efficiently and successfully. Operation manager
also focuses on the quality of their product and services which they offer to their customers. The
role of operation administration is crucial as it controls the cost, maximize profits, etc. The
manager ensures that the product is produced in minimum cost and fulfil the desires of the
customers.
As per the other hand Hristov, (2013) Operation Management helps an organisation in
achieving its goals and objectives and increase sales and profits of the company.
CONCLUSION
As per the above mentioned report, it has been concluded that Operation management
plays an essential role in the growth and sustainability of the business. It assist the managers in
achieving the goals and objectives of the firm. Besides this, Operations management approaches
and roles of leaders and managers is described in the report. Its value and importance
accomplishing business objectives is also defined. Apart from this, the internal and external
factors that influence the business environment and its impact upon operation management is
also explained.
6

REFERNCES
Books and Journal
Chevalier, P., and et.al., 2015. Revenue management for operations with urgent orders.European
Journal of Operational Research.240(2). pp.476-487.
Chowdary, B.V. and George, D., 2011. Improvement of manufacturing operations at a
pharmaceutical company: a lean manufacturing approach.Journal of Manufacturing
Technology Management.23(1). pp.56-75.
Galloway, L., Rowbotham, F. and Azhashemi, M., 2012.Operations management in context.
Routledge.
Harmon, P., 2015. The scope and evolution of business process management. InHandbook on
business process management 1(pp. 37-80). Springer Berlin Heidelberg.
Hristov, A.N., and et.al., 2013. SPECIAL TOPICS—Mitigation of methane and nitrous oxide
emissions from animal operations: III. A review of animal management mitigation
options.Journal of Animal Science.91(11). pp.5095-5113.
Jacobs, R. and Chase, R., 2013.Operations and supply chain management. McGraw-Hill Higher
Education.
Schroeder, R., Rungtusanatham, M.J. and Goldstein, S., 2012.Operations management in the
supply chain. McGraw-Hill Higher Education.
Stadtler, H., 2015. Supply chain management: An overview. InSupply chain management and
advanced planning(pp. 3-28). Springer Berlin Heidelberg.
Storbacka, K., 2011. A solution business model: Capabilities and management practices for
integrated solutions. Industrial Marketing Management.40(5). pp.699-711.
Taticchi, P., Tonelli, F. and Cagnazzo, L., 2010. Performance measurement and management: a
literature review and a research agenda.Measuring business excellence.14(1). pp.4-18.
Online:
Operations and Management. 2017.[Online]. Avilable through:
<https://en.wikipedia.org/wiki/Operations_management>.
7

8