Operations Management and Service Excellence at Starbucks

This report provides a comprehensive analysis of Starbucks' operations management and service excellence. It begins with an introduction to operations management and its importance in gaining a competitive advantage. The report then delves into a comparative four Vs analysis of Starbucks and Greggs, examining volume, variety, variation, and visibility. Performance objectives are assessed, highlighting speed and flexibility as key goals. Design analyses explore Starbucks' layout and process designs, emphasizing their impact on operational efficiency. The second part of the report focuses on quality management at Starbucks, including its implementation of total quality management (TQM). The global operations strategy and macro environment are discussed, highlighting how Starbucks addresses economic, social, and political factors. The report also outlines key requirements, capabilities, and challenges faced by Starbucks, offering recommendations for improvement. The conclusion summarizes the key findings and emphasizes the importance of operational excellence in Starbucks' success.

OPERATIONS MANAGEMENT
AND SERVICE EXCELLENCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Comparative Four Vs Analysis....................................................................................................1
Performance objective analyses...................................................................................................2
Design analyses...........................................................................................................................4
PART 2............................................................................................................................................5
Overview......................................................................................................................................5
Global operations strategy and macro environment....................................................................6
Key requirements, capabilities and challenges............................................................................7
Evaluation of chosen operational area.........................................................................................8
Recommendations........................................................................................................................9
Conclusion.................................................................................................................................10
CONCLUSION..............................................................................................................................10
REREFENCES..............................................................................................................................12

INTRODUCTION
Operation management is the process of business practice that creates high level of
operational efficiency that supports business in gaining competitive advantage in market. This
process involves using accurate raw material and ensuring that no wastage is taking place in
business unit (Chang, 2017). Firm has to inspect the entire process time to time to meet the
quality standards ad to eliminate issues related to quality so that operational efficiency can be
raised. Present study is based on Starbucks, it is the leading firm that is operating in more than 70
countries. It has employed 291000 employees globally and has generated income of 24.71 billion
in the year 2018. Its main agenda is to serve the quality food and coffee to consumers across the
world and satisfy their needs (Åström And et.al., 2018). It aims to use its supply chain system in
effective manner so that it can provide high quality goods to wide range of buyers globally.
Present study will conduct four Vs analyses and will prepare performance objective of business
unit. It will explain quality management operational area of Starbuck and its effectiveness to
raise operational performance of company. Study will evaluate the challenges faced by firm and
will describe ways through which it deals with macro environmental factors.
PART 1
Comparative Four Vs Analysis
There are four V’s that helps in explaining difference between business processes in o e
way or the other. These four V’s of operation management helps in explaining and
differentiating business processes of different organizations (Slack and Brandon-Jones, 2018).
Four V’s of operation management are: Volume, Variety, Variation and Visibility (Ivanov,
Tsipoulanidis and Schönberger, 2017).
Four V’s analysis comparison of Starbucks and Greggs is as follows:
 Volume: Starbucks produce large variety of specialist items in order to satisfy needs and
demands of their customers. Their volume of production is quite low as they provide variety
of food and beverages items because of which their overall cost of food and beverages is
quite high. Volume of their operations is one of the main keys for their success (Åström And
et.al., 2018). They have specialized staff members and machinery in order to increase
efficiency of their operation and meet needs and requirements of their customers. Whereas,
Greggs is a Bakery store chain present in UK (Chang, 2017). They provide large volume of
products to their customers in lower price. Each of their staff members completes wide
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variety of task so that they can produce large volume of products in lower cost (Åström And
et.al., 2018).
 Variety: Greggs do not produce large variety of food products but they do product excellent
quality of lower price food product. They have a fixed variety of food products. They do this
in order to provide excellent quality of food and beverage products to the customers. their
lower variation in products, excellent quality and lower prices helps them to attract a greater
number of customers (Siew and et.al., 2018). Whereas, large variety of food products and
services are produced by Starbucks and are sold to customers. This large variety of food and
beverages items produced by them helps them to match and fulfil needs and requirements of
their customers.
 Variation: Starbucks provides large variation of products. variation within their products is
mostly seen in terms of size and cost of the products as per the needs and requirements of
their customers. Size and price of their products do vary but there is no variation within
overall quality of food and beverages products produced and sold by them. Whereas, Greggs
do not have large variation within their products. They do provide large variety of products
but with least variation within their size, amount and quantity. Most of their food and
beverages products are in standard size (SUN and LIU, 2019).
 Visibility: It focuses on level of organizations processes that are experienced by the
customers (Slack, 2018). Visibility of Starbucks is quite high i.e. they can see and experience
their drinks or food items being made and served to them. Visibility of most of the products
of Starbucks is high as compared to Greggs. Greggs have lower visibility within their
products i.e. food or beverage items are displayed to the customers but customers cannot
experience making of their products. It can also be said that all the products are not produced
in front of their customers (Makos, 2017).
Performance objective analyses
Greggs is considered as largest chain of bakery that offers sandwiches, sausages etc. It also
operates in coffee serving sector. Starbucks is the main competitor of firm. Main objective of
Starbucks is to speed its product delivery process and enhance quality of inventory as well.
Speed and flexibility are the main performance objective of business unit (Åström And et.al.,
2018).
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Greggs is the competitor of Starbucks which main performance objective is to develop its
strong market position by serving its consumers well (Lovelady and Grabbe, 2020).
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Greggs restaurants are operating in many areas. Esri is having many Starbucks coffee
shops but Greggs bakery houses are working there. In north side stores of Greggs are working
with the great efficiency as number of stores are high as compare to Starbucks. Starbucks is
using transformation model in which customers are involved to know more about theri needs and
after that raw material is purchased and its is transformed into final output. This aids in
generating high quality products and serving them best (Olayan And et.al., 2018).
Design analyses
Starbucks is using balance changing design theme, this process designing is used by
business in creating value to firm and ensuing giving amazing service experience to buyers.
Global creative team is working continuously on delivering excellence level of in-store collateral
and having great packaging so that best quality goods can be delivered to the customers (Åström
And et.al., 2018). Starbucks always ensure to utilise its capabilities in excellent level by
designing its process in significant manner. If demand is increasing sudden then Starbucks then it
makes changes in its process and make it more flexible. By this way it becomes able to meet the
demand of consumers in effective manner (Åström And et.al., 2018). Layout designing of the
firm is very effective, layout designing of business is great where Starbucks always ensure to
have adequate seats and tables so that consumers can get proper space in its restaurants.
Designing is the most important element of operation management, it has high impact on
production process and operational efficiency as well. It offers variety of products and services
to its consumers that help the organisation in managing its operations well and attracting large
number of buyers towards the organisation (Nisic, Knezevic and Lilic, 2018). Volume of
Starbucks is high, it has adequate resources that aids business in managing its operations well
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and gaining high trust of buyers. Starbucks is using premium designing process in producing its
end product. Differentiation generic strategy of business always sup[port firm in gaining
competitive advantage to business. By using this designing process Starbucks raises its band
image to great extent and that help the business in sustaining in market for longer duration
(Åström And et.al., 2018).
Starbucks is also using excellent quality of features in its quality management areas. In
this process firm source its coffee beans from the renowned suppliers or from the certified
farmers (Promsivapallop and Jobrich, 2018). There are talent leadership and warm friendly
culture that supports Starbuck in taking right operational decision through which it can maintain
its standard in the market for longer duration. Process and capacity designing is used by
Starbucks. This process is helpful in meeting the increasing demand to great extent and meeting
consumer requirements easily.
In the layout designing it uses workflow efficiency system, it uses its spaces in well
manner. This layout process designing method always helps the company in enhancing its
efficiency level to great extent (Liu And et.al., 2019).
PART 2
Overview
Quality management can be described as act of improving the quality of operations by
implementing various effective process and techniques (Åström And et.al., 2018). It always
ensures that desired level of excellence is obtained by firm so that it can satisfy its consumers to
great extent. Starbucks is the leading coffee house that serves variety of coffee products across
the world. Its quality of products has made the organization popular. Starbuck has implemented
various quality techniques to raise its quality of operations. Starbucks uses total quality
management process to ensure to serve best quality goods and services to consumers (Chang,
2017). Firm has many distribution channels sand all these channels support the enterprise in
eradicating redundancy. Each activity is cross checked properly that aids in meeting
requirements of clients to great extent. Hence quality management has supported Starbuck in
raising its operational performance and it has become able to gain competitive advantage as well.
Robust mechanism of evaluating quality of each activity aids business in maintaining trust of
users and offering amazing experience to them (Ivanov, Tsipoulanidis and Schönberger, 2017).
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Global operations strategy and macro environment
Starbucks always ensures to have premium quality management in its operations. Hence
it evaluated each process in carefully manner and ensures that it maintains quality standards
every time. Its quality team source all the coffee beans carefully so that it gets best quality raw
material (Siew and et.al., 2018).
Starbucks is using total quality management strategy to meet competitive advantage and
to ensure to deal with macro environment factors in significant manner. TQM is the process of
managing operations by focusing on customer requirements. There is high involvement of
consumers (Åström And et.al., 2018). TQM requires high level of communication with
consumers and employees so that firm can serve them according to their requirements. There are
various macro factors that affect overall operational performance of business unit to great extent.
Starbucks uses TQM approach that aids in dealing with these external factors in significant
manner (Åström And et.al., 2018).
Economic fluctuations are the major macro factors that affect its quality and operational
performance of firm to great extent. In order to deal with this issue Starbucks has many
distribution channels, hence if there is economic issues in one country then firm source coffee
beans with other country that aids the organization in getting quality raw material in affordable
prices (Nisic, Knezevic and Lilic, 2018).
Social factor is another major macro element that creates issue for Starbucks, in order to
respond to changing needs of customers, company always uses customer focused process in its
total quality management technique. It ensures needs of buyers hence provide training to staff
and work on integrating quality designing process so that it can satisfy global consumers to great
extent (Liu And et.al., 2019).
Political issues many times create problem for Starbucks in maintaining quality. At
excellence level. Hence under the TQM approach Starbucks uses process entered technique in
which its takes input from the suppliers of different nations and after taking their inputs it
converts them into quality output. Continuous monitoring is done by firm so that unexpected
variation can be detected and can be resolved immediately. This process centred approach helps
the organization in gaining trust of its wide range of consumers and enhancing their satisfaction
towards the brands (Olayan And et.al., 2018).
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Key requirements, capabilities and challenges
Starbucks requires many things to achieve the excellence level of quality. These
requirements are explained as below:
 Human resource: Starbucks needs people those who can serve consumers well. Company
gives training to its employees about needs of buyers and how they can raise quality in its
operations. It continuously monitors its performance so that quality issues can be
resolved on time. This is essential requirement that aids Starbucks in ensuring quality at
large level (Lovelady and Grabbe, 2020).
 System: Starbucks also need technology as it has o convert its raw coffee beans into end
products of coffee that requires big machines and technologies. By having all these
system facility firm can ensure quality in organization.
 Infrastructure: Starbucks has good infrastructure, all its coffee houses have excellent
quality space and infrastructure facility that aids the organization in attracting new users.
If it does not have good infrastructure then it may affect quality as well (Ivanov,
Tsipoulanidis and Schönberger, 2017).
Challenges
Starbucks has to face many issues while ensuring its quality in operational process
(Åström And et.al., 2018). These challenges are described as below:
 Changing consumer needs: As requirement of each person is different from other and it
gets changes according to changes in market demand. When buyers needs get changed
then entity has to face issue because it has to make changes in its supply chain of raw
material and rest other things as well.
 Technological issue: Many times new upgraded technology come into market due to
which firm fails to delivery quality on time. This quality delivery takes place when there
is change in technology (Chang, 2017).
Capabilities
Starbuck is the big firm it has many valuable things that make this firm unique in the
market. One of the major capability of Starbuck is its talented workforce. Enterprise always
ensure to give training to staff and employees also support firm in every critical situation. This
capability of organization aids the firm in enhancing its quality and raising operational
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performance of business because it becomes able to meet requirements of consumers to great
extent (SUN and LIU, 2019).
Another capability of Starbucks is its financial resources, it has adequate funds due to
which it develops contact with new suppliers those who provide them excellence quality coffee
beans and other raw material. Apart from this adequate find help in implementing advance
technology so that it can raise quality and can maintain it properly (Nisic, Knezevic and Lilic,
2018).
Evaluation of chosen operational area
Total quality management can be defined as process through which quality of operations
can be improved gradually (Åström And et.al., 2018). This TQM approach is implemented by
Starbucks at lower to higher level Due to changes in economic condition, raising inflation rate
create problem in quality but to deal with this challenge Starbucks becomes able to reduce cost to
great extent. Starbucks becomes able to ensure applied consistency in all process. It finds out
issues in existing operations and reword that entire process that helps in minimizing wastage and
enhancing quality of products and services. By this way business becomes able to raise its
quality level and gain competitive advantage as well (Promsivapallop and Jobrich, 2018). This is
the process that is beneficial for Starbucks in raising bottom line profit to great extent.
Another challenge that is faced by Starbuck is changing needs of wider range of buyers,.
In order to deal with this issue star bucks always ensure to provide excellent quality satisfactory
goods and services to its consumers. Employees of the Starbucks are continuously working in
finding errors and improving it soon. This helps in meeting needs of buyers and enhancing
productivity of business unit to great extent as well. Starbucks interacts its consumers through its
website and social networking sites (Liu And et.al., 2019). It finds problems that consumers are
facing with kits coffee products. On the bases of consumer complains quality management team
inspect entire area and rectify that error so that customer satisfaction level can be raised to
significant level (Åström And et.al., 2018).
Total quality management approach of quality management is most significant method
through which Starbucks becomes able to reduce defects. The major focus of TQM is on
improving quality (SUN and LIU, 2019). It ensures to minimize wastage of resources and
enhancing quality at greater level. Firm has developed quality assurance team which
continuously work to monitor entire process so that errors can be resolved on time and excellent
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quality can be come up in organization (6 Advantages of Total Quality Management | TQM,
2020).
TQM quality approach is time consuming process as firm has to identify error and then it
has to invest money to resolve that issue. But this is significant method that raises organizational
performance to great extent (Siew and et.al., 2018). This operational area helps Starbuck in
enhancing its competitive positive in market and making firm a leading brand globally. That is
the reason that consumers are highly satisfied with its coffee products and they are inspiring
others to visit Starbuck house once (Åström And et.al., 2018). High productivity is another great
advantage of TQM strategy of Starbuck in which firm rectify errors and improve the operational
process. This is the tool that is helpful in enhancing satisfaction level of stakeholders. It is
beneficial in raising probability of excellence and also eliminates defects as well. Starbucks
analyses emergent behavior of business system and then takes feedback of customers as well.
After getting feedback of buyers it plan for improvement and continuously work on raising
quality of process. This mechanism is beneficial in raising quality of business unit to great extent
(Ivanov, Tsipoulanidis and Schönberger, 2017).
Total quality management is the process that gives benefit of highlighting and analyzing
needs of market which supports Starbuck in making changes in its process so that it can meet the
requirement of consumers to great extent. By using this technique Starbucks check the activities
that are non productive and enhancing wastage in firm. It makes changes in these activities
immediately so that it can meet the excellence level of quality effectively. Quality assurance
team of Starbucks continuously takes review of entire process so that if changes require then it
can implement these modification soon (Promsivapallop and Jobrich, 2018). This TQM approach
is helpful for the firm in maintaining quality at workplace, retaining talent and raising customer
satisfaction as well.
Recommendations
From the above analyses it is found that Starbucks is maintaining quality aspect in
effective manner. But it also needs to work on improving some areas so that it can enhance its
operational performance to great extent.
 Training to staff: Enterprise should give properly training to its workforce time to time
about market demands and quality process. If firm is using new system to enhance
quality then it has involve its employees and have to train them with this system. These
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changes would be better for the firm in raising quality aspect in business unit and gaining
competitive advantage to great extent (Åström And et.al., 2018). Training enhance
knowledge and skills of workers and they become able to identify needs of buyers
effectively that helps them in serving best to consumers and satisfy their needs to great
extent.
 Quality assurance and monitoring: One significant process is implemented then Starbuck
should monitor each activity properly timely (Åström And et.al., 2018). This assurance of
process would be beneficial in detecting the issue and rectify it on time. By this way
wastage also gets reduced that aids business unit in raising quality level and meeting the
industry standards as well. This quality assurance and monitoring always gives benefits
in meeting competitive advantage and attracting more consumers towards the brand
(Olayan And et.al., 2018).
 Customer centric approach: This is another great quality improvement process in which
Starbuck can concentrate more on needs of buyers and can improve areas according to
their requirements. This will help business unit in offering satisfactory goods to buyers
and enhancing their satisfaction level as well. If firm is not paying attention on customers
then it would get failed to identify issue in quality. Hence firm should take feedbacks
from buyers and accordingly it has improve areas. This would be better for firm in
enhancing the quality and meeting the quality standards to great extent (Siew and et.al.,
2018).
Conclusion
From the above study it can be concluded that quality is most important aspect of
business unit, high quality always support firm in generating more profit and sustaining in
market for longer duration. This is beneficial in maintaining cost and enhancing quality so that
firm can satisfy its consumers and can offer them cost effective quality products. Total quality
management is the best process that aids in detecting issues and finding best solution through
which quality can be raised.
CONCLUSION
Above study can be summarized as operation management is very important part of business
unit, it highly affect the productivity area and always impact on profitability of firm as well.
Starbucks is enjoying its leading position in market, it offers high quality products by using
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excellent quality management process. Total quality management approach of firm always aids
the organization in identifying loop fall and maintaining the service excellence to great extent.
Environment of Starbuck is great and its layout designing gives amazing experience to buyers
that aids the business in enhancing profitability of firm significantly.
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