Starbucks Supply Chain Management and Operations Analysis Report

This report provides a comprehensive analysis of Starbucks' operations management and supply chain. It begins with a comparative analysis using the four V's framework (volume, variety, variation, and visibility) and a performance objective analysis, contrasting Starbucks with Greggs. The report then delves into Starbucks' global operational strategy, examining its supply chain management, key requirements, capabilities, and challenges, including sustainability and efficiency. It explores Starbucks' approach to design, store layout, and customer service, followed by an overview of its supply chain management, including planning, sourcing, and production. Finally, the report offers recommendations for enhancing Starbucks' supply chain and overall operational excellence.

Operations management
and service excellence

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Comparative four V’s Analysis..............................................................................................3
Comparative performance objective analysis.........................................................................5
Design Analysis......................................................................................................................6
PART B............................................................................................................................................7
Overview................................................................................................................................7
Starbucks global operation strategy and surrounding macro environment............................7
Key requirements, capabilities and challenges.......................................................................8
Analysis and evaluation of supply chain management at Starbucks......................................9
Recommendations................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Operations management refers to an area in the management field which is concerned with
designing as well as controlling processes related to production.it also considers redesigning
business operations in production of goods as well as services (Zdeblick, 2019). It takes into
consideration converting materials as well as labour into goods and services in order to earn
profits for company. In the following report discussions are made on supply chain management
of Starbucks. Starbucks is an American company which was started in Seattle, Washington. This
company is described to be wave of coffee. This company uses espresso machines which are
automated in order to enhance the taste of coffee. It also helps in increasing safety for those
working in company. This report is divided into two parts. The first part consists of comparative
four analysis, design analysis as well as performance objective analysis. Whereas, second part of
report consists of the global strategy as well as supply chain management used by Starbucks.
PART A
Comparative four V’s Analysis
The major aim of this analysis is to transform every resources and raw materials available
with this organisation into productive goods as well as services and classifying them into four
assorted attributes in this analysis. There are a number of locations included in every
organisation in order to convert its resources into outputs which our products as Willis services.
There are a number of attributes present with business which include, tennis, capital, equipment
into town for which they get the finished goods (Durach, Kembro and Wieland, 2017). There are
four dimensions included in this competitive analysis which are visibility, volume, variety and
variation. Through the help of this management creates values as well as beliefs in an effective
and efficient manner. Below mentioned is the differences and carried out between Starbucks and
Greggs on the basis of these four V’s mentioned in comparative analysis:
Four Vs
Elements
Starbucks Greggs
Volume This is the very first factor included
in this comparative analysis
The management at Greggs aim at
increasing the volume of their

according to which company is
requires to provide very high-quality
product and services in the minimum
cost to their respective customers.
Management can adopt an efficient
way to produce its product and
services which will further help it in
producing high volume of outputs
(Uygun and Dede, 2016). In respect
to this Starbucks is trying to produce
high volumes of outputs in order to
minimise the cost of production.
Starbucks deal with offerings of
product called coffee.
production and reduce cost. They
aim at increasing their revenues
which will lead to an increase in
profits earned by them. The bulk
production will provide them
economies of scale which will
automatically reduce the cost of
manufacturing for them
Variety Management of Starbucks requires to
increase the area of dimensions
present with them according to this
factor. In order to improve their
services, they need to adopt new and
flexible services for their company.
Company is highly involved in
innovating new types of coffee for its
customers. This is very influential to
involve a number of customers into
buying their coffees.
Management of Greggs is trying to
increase the variety of foods and
beverages provided by them. This is
a great way to retain the old
customers for company and also
attract new customers towards them.
Company is doing a lot of
innovations in flavours of its bakery
items in order to attract customers
with all these new offerings made by
them.
Variation Starbucks requires to make a number
of variations in it offering every day.
The style in which coffee is offered
by them is very unique. The name of
buyer is written on mugs provided by
Managers at Greggs are working on a
number or attractive idea to influence
customers towards them. They try to
make new varieties of foods adding
different flavours and spices to them

them (Luthra, Garg, and Haleem,
2016). This is a good example of
their creativity which makes them
different from their competitors.
every time. The prestation of food is
what really matters to them.
Visibility The major aim of this method is that
the goods produced by Starbucks
reaches its customers within time. It
is also needed to be assured by
company that not much time is
wasted while providing coffee to
customers they don’t want their
customers waiting for too long. Even
when customer places an online order
location of customer can be identified
to provide them with services as soon
as possible.
It is the last element in this analysis
in which customers can utilise the
products as well as services produced
by organisations for them. Gregg’s
have physical stores present at a
number or areas which sells its
bakery as well as food items. This is
traditional way of selling their
product.
Comparative performance objective analysis
There are a number of performance object is present in the organisation which are needed
to be followed by it. The main objective of the company is regarding the employees as they
proved to be an important as it for the company. Some of the major as well as essential
performance objectives are mentioned below:
Speed: This refers to the time in which a customer has to wait while buying any goods or
services from the organisation. It is a very essential element for management. It is required for
management to have high speed and efficiency while providing their customers with goods and
services they require (Cimorelli, 2016).
Cost: From the above case study it can be concluded that the major cost Starbucks has to spend
in its raw material is related to purchasing of the coffee beans. The cost of coffee beans which
Starbucks half to secure is comparatively high which affects the overall profitability of the
organisation. It is necessary for Starbucks to make sure that all the resources are utilized well and

their cost are also managed within the organisation. When taking Greggs in to consideration it is
seen that the role material for the team and the delicious food near me is quite high. It is difficult
for them to manage cost of raw vegetables as it is required to buy then when their face.
Design Analysis
Impact of design customer service Process:
The managers at Starbucks try to provide the customers with after sales services. This is
very easy shall entertain me potential clients and customers and also attending customer
language loyalty. This can be explained with an example Starbucks usually takes feedbacks as
Willis reviews from their customers. This helps the management in getting information regarding
the problems which are faced by customer as the products and services or offered to them. In
context of Greggs company aims at maintaining a positive environment in market place. This
step taken by company helps it to increase its revenue along with its overall profitability.
Impact of design of store layout and flow
In today’s world a lot of importance is given to physical appearance. Therefore, stores are
made attractive in order to increase customers to words buying goods and services of these
stores. The stores are divided into two parts that are the physical stores and the other is online
stores. It is important that organisations keep both the stores attractive enough (Bernhardt, Hand
Held Products Inc, 2017). In context of Starbucks, company have physical stores where the
products are sold traditionally. When taking Greggs into consideration, manages at the bakery
provide products through physical platform as well as on me platforms. Both of these platforms
are made attractive enough for the customers.
PART B
Supply chain management at Starbucks
Overview
Starbucks is in coffee shop which was first introduced in the city Seattle. It is an American
coffee shop. This company deals in providing hot coffee as well as cold coffee to their different
customers across the world. It has also been said that Starbucks is the main representative of the
second wave of coffee. After Starbucks the third wave of coffee makers have now aimed at
quality minded coffee drinkers with some handmade coffee based on light a roast of beans.
Starbucks uses new automated espresso machines in order to make sure that they have good

quality of coffee to provide and also safety measures are taken care for their employees (Tseng,
Lim and Wong, 2015). Supply chain management in Starbucks is compared with how barista
provides a good cup of coffee to their customers. The supply chain in Starbucks is a journey on
how the coffee beans reaches the coffee mug.
Starbucks global operation strategy and surrounding macro environment
Starbucks is very good for the products and services it provides in market, it has been
analyzed that the operational strategy of Starbucks in international market is very strong. This
company make sure that they have adopted all the rules and customs of the local surrounding
ordination in which they are serving. The supply chain management of Starbucks have
continuously been focusing on expanding their businesses and their stores in different countries
around the world. With the help of the technological advance Lee present these days it has been
seen that Starbucks is also planning on building locally relevant experiences of Starbucks blend
with their stores in the digital space. The company is exploring a number of strategies in
partnership with the major digital innovations company present in the country. Starbucks also
started on e-flagship store in Alibaba ‘s T mall which have provided a social gifting for a number
of people. Starbucks also focuses on creating Reserve Stores in a number of countries which
already have specialised stores. Will help in highlighting the exit cute and rare copies which are
available in different parts of the world. The major step of Starbucks towards its transformation
plan is recognised as the supply chain management of Starbucks (Ayers and Odegaard, 2017). It
has taken into consideration a complex structure and have simplified it in order to perform a
number of different tasks which includes planning, sourcing, producing as well as delivering.
Planning here includes production planning, replenishment as well as the launch of new
products. The sourcing activities for Starbucks is divided into two different groups of coffee and
non-coffee procurements. After the recognition of supply chain management functions there are
a number of different other departments who turned their attention towards different objective of
supply chain transformation. It is the duty of manufacturing route to develop an efficient plan
and help supply chain with its function.
Key requirements, capabilities and challenges
Requirement:
The two major requirements of Starbucks for the patient management and smooth
running of its overall supply chain process space sustainability as well as efficiency. It is

necessary for them to make sure that no space is left for inefficiency in your supply chain
management. In order to achieve this Starbucks is focusing on their core business model. There
are a number of issues which can cause negative effect on supply chain management it is
important to have a proper plan before starting this process in the organisation. It is Important
that overall synchronization is maintained between the top level and the level of educators. It is
important to maintain good network within company in the supply chain. It is necessary that the
delivery of the end point of supply chain is done according to the standard of the company. Any
variation in delivery from the plan which has been made Millie to negative implications such as
dissatisfaction amongst the customer (Chen and et. al., 2015). It is important to make sure that
manages it together and make an adequate and necessary structure for supply chain management
process. It is necessary to have adequate structure so that all the roles and responsibilities within
the supply chain department is clear to every employee. This clarity will help them to work
efficiently and avoid any negative implication of supply chain on Starbucks.
Challenges:
There are a number of challenges which have to be faced by Starbucks in order to make
sure that they stay in market for a longer period of time. It is required by Starbucks to manage all
these challenges in an efficient manner. Recently it has been seen that people are developing a
habit of ordering food at home. Due to the Starbucks have also undertaken a project in which
they have developed an online Sant for people to order their coffee and they provide coffee
delivered at home. However, this has increased the cost to maintain work for the company also
this required huge financial investment (Marshall and et. al., 2015). Company no more have
bargaining power over the supplier due to which they are increased to pay more prizes for coffee
beans they secured. It is necessary that company focus on maintaining long-term relationships
with their suppliers. This relationship will help them to lower down their cost by attaining raw
materials at lower prices by their suppliers.
The company requires to develop a new technology for its overall process of supply
chain. The adoption of latest technology for company had become a major challenge for its
largest department and have also affected the number of processes in business (Laari and et. al.,
2016). Another silence for company is that the customers these days demand full transparency
which is also leading to have a great pressure on company as they are required to maintain
adequate transparency in all the processes of supply chain management.

Analysis and evaluation of supply chain management at Starbucks
Starbucks follows a policy according to which they aim at maintaining and effective
supply chain management system in their company. The elements included in this policy are
mentioned below
Centralised system: Starbuckshas created a centralised system which helps it in managing the
supply chain and network of logistics in all the outlets which is present in all the different parts
of the world. In order to evaluate the efficiency and effectiveness of their supply chain they are
maintaining a scorecard system. Category of safety is major in an operation system. They are
also focusing on on-time delivery and maintaining an end to end cost for their supply chain
management system.
Managing relationship with suppliers: It is necessary for Starbucks to maintain good and
healthy relationship with their suppliers these days company focuses on maintaining a long-term
relationship with their suppliers as they are the key sources for future growth as well as success
for a company. A number of suppliers of Starbucks a present in rural areas (Heizer, Render and
Munson, 2017). For maintaining a good relationship it is important that suppliers are encouraged
and motivated, they feel belongingness with organisation in order to maintain healthy
relationship.
Innovation: Company have faced a lot of negative criticism due to a fact where the presence of
fungus had demotivated its customer and derailed its brand image. Company has a vision in
which they focus on creating their own coffee blends so that large-scale production of coffee can
be easily done in future. This will help Starbucks in having a competitive advantage over its
competitors in the marketplace. Starbucks is highly committed towards innovation and this
commitment have led to increase in income and increase in spending on innovation strategies in
the company in order to build competitive advantage within time.
Reduction of waste: Starbucks is taking a lot of time to remove all the inefficiencies from their
system. In order to do so they are reviewing their system and their process again and again so
that they can cut down in waste of resources or waste of energy during the process. A number of
policies are made by them regarding employee engagement, growth of business, improvement in
products as well as services as per the demand of customers (Reid and Sanders, 2019).
Managing service platform: Starbucks is making a lot of effort’s in order to successfully reach a
number of innovative platforms and also improve their relationship with their suppliers as well as

their customers. This will increase the quality of product by increasing the quality of raw
materials which are procured by company. It is very necessary for company to make sure that its
suppliers are satisfied along with customer satisfaction. Enhancement of both of this is well
focused on by Starbucks (Hitt, Xu and Carnes, 2016).
Recommendations
There are some recommendations which may improve the supply chain network of
Starbucks mentioned below:
 It is necessary to make sure that the overall roasting process of Starbucks is made in such a
way that the quality of the coffee which is provided in every outlet throughout the world
stays in a standard quality. It is a necessary step company needs to take in order to make sure
did the level of satisfaction achieved by customers all around the world are equal.
 Starbucks is using a lot of efforts and applying a lot of innovation in making sure that best
quality ingredients are used to make the products for customers at affordable prices. It is
necessary for company to make sure that they are using adequate raw materials for roasting,
manufacturing as well as packaging (Hoyos, Morales and Akhavan-Tabatabaei, 2015).
 Is necessary that the model of supply chain Starbucks is different from that of its customers
in order to provide distinguished advantage for the company. It is necessary for them to make
sure that the supply chain is more affective and officiant than that of the suppliers.
 Value chain and leases is an important factor in the framework which helps in analysing the
relationship between a number of operations. It helps the company in contributing to
revenues. Value chain can be divided into two parts that are primary as a second.
 Another situation Starbucks is facing is related to the rise in price of raw materials. Company
needs to make sure that they have efficient and effective relationship with their suppliers.
This will help them attain raw materials from suppliers at list prices leading to less cost of
production (Merigó and Yang, 2017).
CONCLUSION
From the above discussed report, it can be said that there are a number of aspects in the
process management operation in an organisation. All these factors mentioned above helps in
functioning of the organisation adequately. Operation management is basically related to a
number of administration functions which are being performed by employs and all the managers

present in an organisation. The importance of supply chain management for an organisation has
also been proved in this report. Supply chain is an important aspect in every organisation which
describes supply of input as Willis supply of output from the organisation play store in order to
survive in the market it is very important for an organisation to build a strong supply chain so
that their production of things can reach the potential customers in right condition and in right
time.

REFERENCES
Books and Journals
Zdeblick, M.J., PROTEUS DIGITAL HEALTH Inc, 2019. System for supply chain management.
U.S. Patent 10,305,544.
Durach, C.F., Kembro, J. and Wieland, A., 2017. A new paradigm for systematic literature
reviews in supply chain management. Journal of Supply Chain Management. 53(4). pp.67-85.
Uygun, Ö. and Dede, A., 2016. Performance evaluation of green supply chain management using
integrated fuzzy multi-criteria decision-making techniques. Computers & Industrial Engineering.
102. pp.502-511.
Luthra, S., Garg, D. and Haleem, A., 2016. The impacts of critical success factors for
implementing green supply chain management towards sustainability: an empirical investigation
of Indian automobile industry. Journal of Cleaner Production. 121. pp.142-158.
Cimorelli, S., 2016. Kanban for the supply chain: fundamental practices for manufacturing
management. Productivity Press.
Bernhardt, K.L., Hand Held Products Inc, 2017. Package physical characteristic identification
system and method in supply chain management. U.S. Patent 9,727,840.
Tseng, M., Lim, M. and Wong, W.P., 2015. Sustainable supply chain management: a closed-loop
network hierarchical approach. Industrial Management & Data Systems. 115(3). pp.436-461.
Ayers, J.B. and Odegaard, M.A., 2017. Retail supply chain management. CRC Press.
Chen, D.Q., Preston, D.S. and Swink, M., 2015. How the use of big data analytics affects value
creation in supply chain management. Journal of Management Information Systems. 32(4). pp.4-
39.
Marshall, D. and et. al., 2015. Environmental and social supply chain management sustainability
practices: construct development and measurement. Production Planning & Control. 26(8).
pp.673-690.
Laari, S. and et. al., 2016. Firm performance and customer-driven green supply chain
management. Journal of cleaner production. 112. pp.1960-1970.
Heizer, J., Render, B. and Munson, C., 2017. Operations management. Sustainability and Supply
Chain Management, 12th Ed., USA.
Reid, R.D. and Sanders, N.R., 2019. Operations management: an integrated approach. John
Wiley & Sons.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management. 41. pp.77-94.
Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India.
Hoyos, M.C., Morales, R.S. and Akhavan-Tabatabaei, R., 2015. OR models with stochastic
components in disaster operations management: A literature survey. Computers & Industrial
Engineering. 82. pp.183-197.
Merigó, J.M. and Yang, J.B., 2017. A bibliometric analysis of operations research and
management scie
nce. Omega. 73. pp.37-48.