Supply Chain Management in Hospitality: Starbucks Corporation Report

This report provides a comprehensive analysis of supply chain management (SCM) within the hospitality sector, focusing on Starbucks Corporation as a case study. It begins by defining key SCM concepts, principles, and processes, illustrating their application across various stages, including resourcing, product design, logistics, and distribution. The report then analyzes how the integration of SCM concepts improves organizational efficiency, followed by an evaluation of the importance of effective SCM from the perspectives of customers, suppliers, distributors, and retailers. Furthermore, it explores the cross-functional and integrated approach of SCM within hospitality organizations, specifically examining the implications of the interrelationship between the supply chain and other functional areas of Starbucks. The report concludes with an evaluation of Starbucks' supply chain strategy, including recommendations for improvement, and a discussion on physical information and financial management within the supply chain, considering both their positive and negative impacts.

Hospitality supply change
management

Table of Contents
Section1............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1: Explain how key supply chain concepts, principles and processes are applied throughout
stages of resourcing, product & service design and development, logistics and distribution
with using hospitality examples..................................................................................................1
M1: Analyse how integration of supply chain concept and process improves efficiency of
chosen organisation.....................................................................................................................3
D1: Critically evaluate supply chain concept, principles and processes for effective SCM......3
TASK2.............................................................................................................................................3
P2: Evaluate the importance of effective supply chain management from perspective of
customers, suppliers, distributors and retailers...........................................................................3
M2: Critically evaluate the importance of physical information and financial management
within supply chain.....................................................................................................................5
TASK3.............................................................................................................................................6
P3: Explore cross functional and integrated approach of SCM with other functional areas
within hospitality organisation....................................................................................................6
M3: Evaluate implications of interrelationship between supply chain and other functional
areas of Starbucks.......................................................................................................................7
D2: Critically analyse interrelationship of supply chain with other departments of chosen firm.
.....................................................................................................................................................7
Section2............................................................................................................................................8
Task4................................................................................................................................................8

P4: Evaluate a supply chain strategy within hospitality organisational context and present
proposal for improvement...........................................................................................................8
M4: critically evaluate a supply chain strategy within Starbucks corporation...........................8
D3: Justify and recommend improvements of supply chain strategy based on critical
evaluation within respective organisational context...................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

Section1
INTRODUCTION
Hospitality is defined as the relationship between guest and host, where host receives
guest with goodwill. For instance warm welcome and entertain guests, visitors, strangers
throughout the travelling. It is important for effective managements of hospitality business that
has prominent impact over tourism industry (Hugos, 2019).
Supply chain management is refers as the optimization of creation of products and flow
form raw material that are important for sourcing effective production, logistics and deliver of
goods and services to final customers and end users (supply chain management, 2020).
Starbucks corporation is American multinational chain of coffee house and roastery
reserves. It is known as world's largest coffee house chain considered under 2nd wave of coffee
culture within United States. The company founded in 1971 with headquartering in Washington,
US by Gordon Bowker, Zev Siegl, Jerry Bald win.
This report is based on supply chain management of Starbucks corporation in which
principles, processes applied throughout design and development of product, logistic &
distribution are considered with suitable examples. Furthermore, importance of effective supply
chain management from perspective of key people, cross functional & integrated of SCM with
respect to other areas are considered within the report. In addition supply chain strategy within
chosen hospitality organisation are evaluated with improvement proposal.
TASK1
P1: Explain how key supply chain concepts, principles and processes are applied throughout
stages of resourcing, product & service design and development, logistics and distribution
with using hospitality examples.
Supply chain management is important aspect of any business that has prominent impact
in terms of effective logistic and distribution of goods and products in order to makes it easy for
consumers for obtaining goods and services as per preferences. Following are the principles that
helps in effectiveness and efficiency in different stages of supply chain management in context
of Starbucks corporation:
Planning: The first and most important stage within supply chain management process of
respective organisation includes create and build effective short term and long term range supply
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chain strategies. It is associated with principle of adapt supply chain to customer's needs which
includes dividing customers within different groups known as segments so as to understand the
needs and expectations of customers based on prediction of consumer demands, develop
integrated supply chain strategies. Thus adapt supply chain to customers needs is effective
principle that has prominent impact over effective planning of goods & services, effective
distribution based on expectations and needs of customers in order to meet market preferences.
For instance planning for what are the demands of customers and what action should be taken in
order to satisfy customers (Koberg and Longoni, 2019).
Resourcing: This phase comes after completion of successful planing of business objectives,
customer needs and preferences. The next phase of process includes procurement of resources
such as- raw material, goods and component required for effective successful operation and
functioning of business that has prominent impact over firm's performance. For instance
allocation of required resources like raw material, machinery, equipments, financial requirements
etc. In context of respective organisation uses principle of align demand planning across supply
chain so as to used demanded data wisely by mangers of supply chain management (SCM).
designing & development of goods and services: Next phase of supply chain management is
related to design goods and services as per the requirement of target customers and then develop
products & services in such a way that meets expectations and demands of customers. In context
of respective organisation uses principle of product differentiation close to customers so as to
standardise and differentiate two opposite which helps in effective selection of goods and
services with customer's point of views. For instance clarify difference between Starbucks coffee
and regular coffee.
Logistic and distribution: The next step of SCM process is manage logistics flow of goods and
products across supply chain. For instance ensure quick and safe flow and movement of goods
through effective transportation companies, third party logistic firms and some more that brings
effectiveness within process. Here Starbucks corporation adopted principle of customized
logistic network in order to bring effectiveness and efficiency in logistic and distribution process.
In context of SCM manager of respective organisation have to tailor effective logistic network to
serve various needs of different segments (Abdel-Baset, Chang and Gamal, 2019).
Customer interface: In final stage demand process revolves around all issues that are related to
planning for customer interface, needs satisfaction of customers and order fulfilment of
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customers in perfect and effective manner. In context of respective organisation SCM manager
uses principle of outsourcing strategically that based on factor that core expertise should not be
outsourced ever. This principle stands for test of time that helps in strategic decision maki8ng of
firm leads to successful implementation of supply chain management activities and process of
respective organisation.
M1: Analyse how integration of supply chain concept and process improves efficiency of chosen
organisation.
As per above discussion over stages within the process of supply chain management
(SCM) that has prominent impact in terms of performance of Starbucks corporation leads
towards higher profits of firm through higher customer satisfaction given by firm. Planning and
resources process helps in acquiring knowledge about needs and expectations of target customers
so as to produce effective products in order to satisfy customer. Effective principles of supply
chain management plays significant role in making timely distribution of goods and products so
as to make convenient for customers that leads to demand satisfaction of consumers needs
requires for effective operation and raising performance standards of respective business.
D1: Critically evaluate supply chain concept, principles and processes for effective SCM.
Although it is concluded that supply chain management principles and processes has
significant impact over firm's position and performance such as- it helps in saving cost and time
of business included in ineffective business results due to delay in distribution and transportation
activities. It also plays significant impact in terms of ensuring customer satisfaction in design and
development of goods and products . It has some negative impacts on respective firm including
requires more time and money for planning, resourcing and distribution of goods and services in
order to fulfil consumer needs.
TASK2
P2: Evaluate the importance of effective supply chain management from perspective of
customers, suppliers, distributors and retailers.
Supply chain management is important aspect that helps in provide effective business
operations and smooth functioning that has prominent impact in terms of customers, retailers,
distributions as well as retailer. In context of Starbucks corporation uses effective changes for
effective management of supply chain process of firm with efficiency. For instance in 2000s it
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had to deal with struggling supply chain, but economic downturn set in forcing organisation to
re-engineer its supply chain (Meredith and Shafer, 2019). In 2010 company removes $700
million from cost of supply chain and used an innovative metrics in order to achieve remarkable
results. That has prominent impact in organisational as well as customer perspective. These are
considered below in context of respective organisation:
Importance of SCM in customer perspective: Customer act as an important aspect of any
business organisation related to several areas like planning, development of goods and services,
supply of effective quality at effective prices that has prominent impact over customers
satisfaction. In context of respective organisation effective supply chain management plays
significant importance for customers benefits are considered as follows:
Convenient for customers: In context of Starbucks corporation has effective
management of supply chain in several countries that leads to make it continent for customers to
assess its goods and services in effectual manner that has prominent impact for customers
towards fulfilment of needs and desires in effective manner. This is beneficial for customers to
easy & quick assess of goods and products and leads to enhance experience of better products.
Allow effective & efficient services: Another importance of successful supply chain
management of respective organisation in terms of customers perspective it makes it easy for
customers to receive better goods and products quickly and as per prier promise made by firm.
Supply chain management has significant importance in acquiring effective and efficient services
that has prominent impact over need accomplishment of customers (Caro and et. al., 2018).
Importance of SCM in supplier perspective: Suppliers are important part of any organisation
that influenced by supply chain management of a firm. In context of Starbucks corporation has
effective SCM that helps suppliers in timely supply of goods and products to end customers that
saves the cost of breaking and damaging of perishable raw materials used for Starbucks products.
Suppliers are also beneficial in terms of getting advantage of higher supply of materials due to
enhanced demand from Starbucks raise because of higher demand of its products from
customers. Thus successful management of supply chain plays prominent impact for suppliers as
well.
Importance of SCM in distributor perspective: Effectiveness and efficiency of SCM of
Starbucks not only important for suppliers and customers but also plays significant impact over
business performance. For instance successful supply channel management helps in timely
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distribution of goods and products from supplier to customers in order to meet customers
expectations. This leads to building effective goodwill of firm that ha prominent impact over
business performance in terms of rising profit and market share of firm (Zaid Jaaron and Bon,
2018). There are some points that defined how SCM is important for respective business
perspective:
 It helps in satisfying needs and expectations of customers in time and assure
convenience for them.
 Successful SCM has important role in rising market share and goodwill for firm
through enhancing distribution channel.
 It saves the time and cost of business indulge in variety of activities for instance
breakage of goods in warehouse and transportation processes of firm.
 This makes effectiveness for firm in terms of balancing supply of goods and
products as per then requirement of target market.
Importance of SCM in retailer perspective: Retailers of respective firm are also benefits from
effective supply chain management. It helps in attaining competitive advantages over rivalries
within industry so as to lead to deliver better quality of goods and services to its customers. This
helps in win customer attention by offering attractive shipping costs from customers in exchange
of effective quality of goods and services.
M2: Critically evaluate the importance of physical information and financial management within
supply chain.
As per above discussion over importance of supply chain management (SCM) it is
observed that physical information includes requirement of raw material, equipments to covert
raw materials into finished products so as to satisfy customer needs in effective manner.
Financial management includes effective use of financial resources in order to successful
implementation of business activities associated with supply chain management. Both physical
information and financial management has prominent impact on SCM of respective organisation
in terms of positive as well as negative impacts. Positive influence are as- higher profits of firm,
rising customers satisfaction as well as market share enhancement of business. Negative impacts
of SCM arise from physical information and financial management over Starbucks corporation
includes requirement of huge money for effective distribution of goods and products over
efferent countries (Waters, 2019).
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TASK3
P3: Explore cross functional and integrated approach of SCM with other functional areas within
hospitality organisation.
Interrelationships of SCM with other functional areas of Starbucks
Supply chain management is important part of any business that has prominent impact
over entire performance of business organisation in terms of rising profits and market share of
business through diverse needs and expectation of customers. Supply chain management is
interrelated with several other departments of Starbucks corporation that has prominent impact
over entire business performance and effectiveness in distribution processes (Bastas and
Liyanage, 2018). All departments such as- human resources, production & operation, marketing
and finance department are interrelated with supply chain management of firm. These are further
explained as follows:
Relationship between operation & production department: Supply chain management of
Starbucks are related with operation and production department as it plays significant role in
analysing needs and market trends & then production department responsible for manufacturing
and producing of effective goods and services as per the requirement of customers. Supply chain
management helps in strengthen the operation and production department of respective firm
through ensuring effective and timely allocation of resources for instance better quality of coffee
beans, required equipments and forecasting demand of target customers needed for successful
operation of firm.
Relationship between marketing department: Effectiveness in supply chain management
plays positive role in successful operation and management of respective organisation. Supply
overseen by SCM personnel of firm which includes functions like sourcing, procurement,
inventorying, logistic and distribution of goods and products to potential customers. Demand is
overseen by marketing managers like advertising, differentiation, sales, and customers feedbacks
through focus groups and surveys. Thus both statements reflects as interrelationships between
marketing department of respective organisation with supply chain management. This will leads
to effectiveness of firm's performance and productivity( Liu and et. al., 2018).
Relationship between human resource department: Human resources management
practices used to unify supply chain of any business entity that are essential part for business. In
context of Starbucks corporation HRM is interrelated with supply chain management used to
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encourage supply chain partners in order to develop valuable inter-firm relationship and helps to
create knowledge sharing routines that has prominent influence over firm's position and
performance in effective manner that brings opportunities. Starbucks corporation concentrates on
developing and maintaining effective relationship between human resources and SCM of
business which results in better coordination, streamline supply chain and unlimited competitive
advantages over other players within industry (Kot, 2018).
Relationship between finance department: In context of supply chain management
finance department has also s significant impact on its effectiveness. Cost reduction is also
adopted by optimum designed financial flaws within the chain. In terms of Starbucks supply
chain management is interrelated with finance department of firm. For instance managers of
company take decisions from operational as well as financial point of views and do not recognise
impact of supply chain management and financial performance or vice versa.
M3: Evaluate implications of interrelationship between supply chain and other functional areas
of Starbucks.
Although above consideration based on cross functional relationship between different
areas of respective organisation it is analysed that all the functional departments of business are
interrelated with each other. In context of respective organisation these are includes effective
SCM possible through effective research done by operation department, production department
easily obtain raw material with help of SCM, development of products as per customers needs,
marketing department enable to gain effective customer feedbacks, financial resources are
effectively flaws so as to reduce cost of firm and human resources are important in terms of
effective cooperation business supply partners of business (Mathur and et. al., 2018).
D2: Critically analyse interrelationship of supply chain with other departments of chosen firm.
As per discussion over interrelationship between SCM and other functional departments
of Starbucks are reflects some positive as well as negative impacts over business. Positive
impacts may includes easy availability of raw material supplies, reducing unnecessary cost of
firm, effective flaw of financial resources, building cooperative relationships between partners
etc. on the other hand it has some negative aspects also for respective organisation such as- due
to interdependency, ineffective supply chain management may results in customers
dissatisfaction arise due to less satisfaction of requirements, increasing business cost due to
ineffective flaw of financial resources etc. thus in managers of respective organisation may
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ensure effective management of supply chain so as to enhance business performances (De
Angelis, Howard and Miemczyk, 2018).
Section2
Task4
P4: Evaluate a supply chain strategy within hospitality organisational context and present
proposal for improvement.
Supply chain management is defined as the process and activity of sourcing raw material
or components required by business entities to develop a product and service & deliver of goods
and services to customers (What is supply chain management,2017).
Supply chain strategies: In context of Starbucks began its growth, supply chain strategy
are not seen on priority list of business. Until late 2000's respective organisation had to deal with
poor supply chain was seen as struggling with supply chain but due to economic downfall forces
the organisation to re-engineer its supply chain. As per the requirement of respective
organisation in 2010 Starbucks removed more than 700 million dollars from its cost of supply
chain and used a innovative set of metrics so as to achieve remarkable business results. This
leads to effective At the same time company faced the recession form the times of its history.
Due to ineffective supply chain management respective organisation seen as sales of firm going
down that results in increasing supply chain cost of business (Saudi, Sinaga and Roespinoedji,
2018). Logistic metrics inside the same process and results in significant decline in supply chain
performance of firm. For instance respective firm was schedules store deliveries without
considering of its warehouse capabilities so that delivery trucks would routinely leave centres of
distribution with less than full order for a store. Thus due to lack of proper concentration and
focus over effective management of supply chain it results in rising supply chain cost of firm.
M4: critically evaluate a supply chain strategy within Starbucks corporation.
AS per above discussion over supply chain strategies of Starbucks it is observed that
there are several negative impacts are arise due to less concentration over supply chain
management of respective firm (Wong and et. al., 2020). These negative aspects from
ineffective supply chain management of respective firm includes it lacked supply chain strategy
that focused on delivering business value, it also lacked firm's celebration of benefits due to
ineffectiveness of supply chain management. It also impacts respective business in terms of it
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lacked focus over right metrics of supply chain and required to to enhance investment in talent
increment as well as acquisition. Thus all these impacts reflects ineffective supply chain
management of respective organisation that results in increasing coats and responsibilities of
firm.
D3: Justify and recommend improvements of supply chain strategy based on critical evaluation
within respective organisational context.
Although above discussion over supply chain strategies of Starbucks and how they
impacts entire organisation in terms of rising firm's profits, enhancing costs and liabilities etc. in
order to make effective management of supply chain it is recommended for Starbucks to change
supply chain strategy “retailer transformed” so as to from traditional logistics mindset of
organisation in accomplishment of purpose of develop to deliver value, monitoring and adding
value towards every step of production process. This will helps in accelerate speed of market and
sales growth of Starbucks. In order to obtain this strategy respective organisation needs to focus
on better partnership, problem solving attitude, inbound logistics as well as outbound logistics
(Jia and et. al., 2018).
CONCLUSION
As per above report it is observed that supply chain management it an important part of
any business that has prominent impact in effective operation and performance of business in
market place. In this report principles that are used in supply chain management process so as to
make it effective with suitable impacts over business. Further, importance of supply chain
management are considered that has prominent impact over respective business organisations,
customers, retailers as well as distributors so as to make effectiveness within organisation.
Moreover this report also consists of cross functional relationship of different departments of
chosen organisation so as to help organisation in order to evaluate positive as well as negative
impacts over firm. In addition supply chain strategy of respective organisation are explained with
suitable implications and recommendations of future strategies are also considered within report
that has prominent impact over business in future growth.
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REFERENCES
Books and Journals
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Bastas, A. and Liyanage, K., 2018. Sustainable supply chain quality management: A systematic
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Caro, M.P. and et. al., 2018, May. Blockchain-based traceability in Agri-Food supply chain
management: A practical implementation. In 2018 IoT Vertical and Topical Summit on
Agriculture-Tuscany (IOT Tuscany) (pp. 1-4). IEEE.
De Angelis, R., Howard, M. and Miemczyk, J., 2018. Supply chain management and the circular
econo(Hugos, 2019)(Koberg and Longoni, 2019)(Abdel-Baset, Chang and Gamal,
2019)(Meredith and Shafer, 2019)(Caro and et. al., 2018)(Zaid Jaaron and Bon, 2018)
(Bastas and Liyanage, 2018)(Kot, 2018)Liu and et. al., 2018)(Saudi, Sinaga and
Roespinoedji, 2018)(Jia and et. al., 2018)(Wong and et. al., 2020)(Mathur and et. al.,
2018)(De Angelis, Howard and Miemczyk, 2018)(Waters, 2019)my: towards the
circular supply chain. Production Planning & Control. 29(6). pp.425-437.
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Jia, F. and et. al., 2018. Sustainable supply chain management in developing countries: An
analysis of the literature. Journal of Cleaner Production. 189. pp.263-278.
Koberg, E. and Longoni, A., 2019. A systematic review of sustainable supply chain management
in global supply chains. Journal of cleaner production. 207. pp.1084-1098.
Kot, S., 2018. Sustainable supply chain management in small and medium
enterprises. Sustainability. 10(4). p.1143.
Liu, J. and et. al., 2018. Green supply chain management and the circular
economy. International Journal of Physical Distribution & Logistics Management.
Mathur, B. and et. al., 2018. Healthcare supply chain management: literature review and some
issues. Journal of Advances in Management Research.
Meredith, J.R. and Shafer, S.M., 2019. Operations and supply chain management for MBAs.
John Wiley & Sons.
Saudi, M.H.M., Sinaga, H.O. and Roespinoedji, D.S., 2018. The role of tax education in supply
chain management a case of Indonesian supply chain companies. Polish Journal of
Management Studies. 18.
Waters, C.D.J., 2019. Logistics: an introduction to supply chain management. Red Globe Press.
Wong, L.W. and et. al., 2020. Time to seize the digital evolution: Adoption of blockchain in
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Zaid, A.A., Jaaron, A.A. and Bon, A.T., 2018. The impact of green human resource management
and green supply chain management practices on sustainable performance: An empirical
study(Hugos, 2019)(Koberg and Longoni, 2019)(Abdel-Baset, Chang and Gamal,
2019)(Meredith and Shafer, 2019)(Caro and et. al., 2018)(Zaid Jaaron and Bon, 2018)
(Bastas and Liyanage, 2018)(Kot, 2018)Liu and et. al., 2018)(Saudi, Sinaga and
Roespinoedji, 2018)(Jia and et. al., 2018)(Wong and et. al., 2020)(Mathur and et. al.,
2018)(De Angelis, Howard and Miemczyk, 2018)(Waters, 2019). Journal of Cleaner
Production. 204. pp.965-979.
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Online
supply chain management. 2020. [Online] Available through
<https://searcherp.techtarget.com/definition/supply-chain-management-SCM>./
What is supply chain management. 2017. [Online] Available through
<https://www.cio.com/article/2439493/what-is-supply-chain-management-scm-
mastering-logistics-end-to-end.html>./
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