Diploma of Leadership and Management: Starbucks Operation Report

This report provides an operational review of a Starbucks outlet located in Tivoli Arcade, Melbourne, examining various aspects of its management. The report begins with a memo of transmittal addressed to the CEO of Starbucks Australia, outlining the scope and methodology of the review, which included observations on-site and interviews with staff and management. The findings highlight several key issues, including customer dissatisfaction with staff behavior, cleanliness concerns in restrooms and storerooms, and inconsistencies in the quality of beverages and food items. The report details problems with staff courtesy, hygiene, and inventory management. Recommendations include improving inventory tracking, creating a more transparent environment for customers, emphasizing cleanliness, and addressing bottlenecks in the operational process. The report concludes with a call for improved staff training and a focus on customer satisfaction to address the issues and improve the overall performance of the outlet.

Running head: DIPLOMA OF LEADERSHIP AND MANAGEMENT
BSB51915 Diploma of Leadership and Management
Operation Management
Student’s name:
Name of the university:
Author’s note:

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Memo of Transmittal for Operation Management Issues in Starbucks outlet, Tivoli Arcade
Dear, Mr Point, CEO of Starbucks Australia,
Sir,
In regard to your request, I visited Tivoli Arcade outlet of Starbucks twice on 8th
November and 11th November. I thoroughly checked the operation process and listened to the
customers and as well as the staffs' comments on issues of operation in the outlet. The outlet has
a severe issue in the cleaning of restroom and storeroom. The staffs do not behave well with the
customers and I observed that they did not have any courtesy towards the customers. Moreover,
the staffs are indifferent towards their job role.
In this report, I described the information and ideas from my perspectives. Read this report as
operation management report and a document of current scenario of Tivoli Arcade Starbucks. In
some sections of the report, I used my concerned in first person point of view. The only
limitation of the report is that I got very fewer chances to interact with the staffs and supervisors.
I made this report from my own perspectives. Moreover, I would like to express my gratitude to
the manager of the outlet in spending sometimes to answer my queries.
Thank you.
Regards,

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Table of Contents
1. Introduction..................................................................................................................................5
2. Discussion of Findings................................................................................................................6
3. Recommendations........................................................................................................................9
4. Conclusions................................................................................................................................10
Reference List................................................................................................................................20

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Executive Summary
This report highlights the issues faced by an outlet of Starbucks at Tivoli Arcade in Melbourne.
The customers are complaining about the services of the staffs, quality of the food items and the
cleanliness of the cafe. I have visited twice in the cafe and noticed the operation management
system that has been followed the cafe. At a time, the cafe has seating facility for at least 70
customers and there are 20 staffs work at a time in serving the customers, in the kitchen and in
another operation process. I observed the ambience of the interior and it was fine for the
customers, however, I noticed a few flies. On the contrary, I observed the restroom and
storeroom, they are not in proper condition and they need cleanliness. I checked the sample
beverage and the coffee was light in colour and not tasted good. Therefore, the cafe needs
changes in managing inventory, the behaviour of the staffs and bottleneck approach in managing
the operation.

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1. Introduction
In this report, operation management of one of the outlets of Starbucks at Tivoli Arcade
in Melbourne will be explained. In this report, the current operational issue in this café will be
highlighted.
Background: The Starbucks Australia is a famous name in the café business and
headquarter of this business has been facing the issues when complaints are pouring from
consumers in several parts of the Australian outlets. In the Australia, Starbucks has opened more
than 83 Frappuccino-singling outlets; however, almost 60 had to close because of customers’
disinterests (Munchies.vice.com 2017). The management of Starbucks has decided to review the
operation management in Tivoli Arcade, Melbourne outlet as the customers are not satisfied with
behaviour of the staffs and the ambience of the outlet.
Problem or purpose: In the particular Tivoli Arcade outlet of Starbucks, the customers
complain that the behaviour of the staffs is very poor and the outlet does not give quality
ambience. The quality of the coffee and snacks do not justify the name of the Starbuck. The
coffee culture in the Australia is famous and there are more than 10,000 cafes that are present
already in the Australia. Therefore, the competition is high in the business and customers’
satisfaction is a necessary part of the business.
Significance: In Tivoli Arcade, one of the outlets of Starbucks has been facing the issues
when one of the consumers uploaded an image of poor coffee and snacks with a video where the
staff ill-treated with the customers. The recent news Tivoli Arcade came into news and the image
of the flavoured coffee went viral on social media (Bahmani-Firouzi and Azizizpanah 2014). Of

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late, Starbucks has been facing the losses in business too and management of Starbucks wants to
take a stance to fight back against the poor operation.
Scope: In this report, Starbucks operation management issues will be explained in the
outlet of Tivoli Arcade, Melbourne. This report will highlight the service, cleanliness and quality
of food items in this outlet. A 360-degree survey of the hotel in operation related will be
discussed in this report.
Sources and methods: This report has been explained with first-hand observation. I
visited two times at the Tivoli Arcade outlet at Starbucks and saw the operation process. Most of
the information has been gathered through primary data collection method. I took interviews
with the outlet managers and the staffs in order to collect the data about operation management.
Organisation: In this report, my experience in the Tivoli Arcade outlet has been
explained. I have discussed the customers' experiences and employees' promises in the outlet.
However, the operation process, cleanliness and system of management have been illustrated.
Moreover, issues have been identified and possible solutions have been given.
2. Discussion of Findings
Tivoli Arcade outlet of Starbucks is in Melbourne and it is situated in pose area. I visited
twice in the outlet for the observation purposes. The first time, I visited on Wednesday and
second time, I visited on Saturday afternoon. On Wednesday, I visited one afternoon and that
time there were 15 customers were there. Most of the customers were young aged and they came
with their partners. Young professionals also came there for the informal business meetings. On
the other side, on a Saturday evening, the cafe was almost full and no such seat was empty and I
had to wait for 20 minutes on the lunge to take a seat at the cafe. On both the occasions, I found

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that customers had to wait for at least 20 minutes after they ordered their food items. Waiting
time of the organisation should be less in the cafe and restaurant (Heizer 2016). Most of the
customers ordered coffees and snacks and they asked several times to the staffs about their
orders. Staffs were indifferent about the customers' remarks. When the cafe was not full the
waiting time of the customers was same as the peak hours. The staffs are reluctant to do their job
roles and the manager of the outlet did not take any action. There was all equipment present what
they need to run the cafe, however, they did not utilise the equipment. In addition, the staff did
not greet the customers courteously when they entered the cafe. The staffs were busy with their
working and the customers themselves had to go the counter and put their orders. The counter-
staff gave the coupon and asked the customers to sit over there. The customer satisfaction issue
was there as the customers were not treated courteously. I found 8 staffs were working over there
to serve the customers and three more staffs were preparing coffee and snacks. 2 supervisors
were there who manage the staff and did the billing.
The cafe was clean and it was maintained nicely by the staff. The coffee machine, the
toaster, the cooking equipment and the dishes all were neat and clean. The seating area was
decorated properly and the staffs who were preparing the food wore apron and gloves. The cafe
maintained the cleanliness, however, the hygiene factor in food did not maintain accurately. The
Cafe did not put the certificate that they had got from the medical and sanitary inspection service
as this would be the first sign that the quality of the food item is safe for the customers. The
tables and chairs were clean and the ambience smelt like a refreshing cafe. I did not notice any
cockroaches, rats that could be a sign of the unhealthy cafe. However, as the cafe is on the
second floor of a shopping mall, I found flies that were present in the outlet. Some of the flies
were flying near the food items also. The uniforms of the staffs were not clean and it looked like

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they did not wash the uniforms on regular basis and have been wearing these for a long time. I
found one staff who was sweeping the floor at the present of the customers and it is an unhealthy
practice. In addition, the restroom was not clear and it smelt filthy. The management should not
overlook the restroom (Zhnag et al. 2013). In the Starbucks outlet, the tap was dripping. The
restroom was not tidy and the towel was missing over there. Moreover, the cafe had only one fire
extinguisher. I observed the kitchen area, this section was clean and minimum dust was there that
could harm the customers.
On Wednesday, I asked the staff to show me the storeroom of the cafe where they stored
their raw materials and unnecessary things. At first, they did not like me to show the restroom
and after pleading a few times, they allowed me to show the restroom. I was flabbergasted to see
that the storeroom had cockroaches and it was unlike the cafe interior. It was not clean and it
smelt bad. They did not clean the storeroom and the raw materials were stored for future
purposes without taking any measure of this. Food remains and dirt of the cafe was kept here and
cleanliness and hygiene factors were missing in the restroom. Cross-contamination of the food
products could be harmful to the employees and customers. In addition, the exterior of the cafe
was maintained properly and the staffs were lazy enough to clean the exterior also. When a
customer left the table, the staff took a few minutes to clean the table, cups and dishes.
I took the sample of espresso beverages and hot chocolates. The quality of the espresso
was not up to the standard of Starbucks and it was light in colour. The milk was not condensed
properly and the sugar packet contained a little dust sugar. Moreover, the cakes that the
Starbucks offered were kept there for a long time. The sandwiches and wraps were good as the
staff made them instantly.

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3. Recommendations
Managing of inventory
In Tivoli Arcade, the management does not maintain a proper inventory and they need to
prepare Point of Sale to track the inventory. The staffs need to enter each ingredient that goes to
the kitchen on the sheet to track the account. In the outlet, inventory routine helps the cafe to
lower the waste and forecast the expenses on the stock. While managing the inventory, they
could check the supply chain and quality of raw materials that could improve the quality of
coffee and food items.
Creating open environment
The opening environment gives the better option to the customers to learn the process of
preparing their food items and coffee (Idea generated from Parisio et al. 2016). This would help
the cafe to increase the transparency and the process of preparing food can give them
satisfaction. This open process can be applied to manufacturing operation of food and business
operation process as well. The management should train the staffs in a way that could understand
their job role.
Cleanliness in restroom and emphasise bottleneck process
The restroom must be cleaned in a proper way and managing inventory could help the
cafe in the cleaning of the restroom. The dirt and the waste must be processed in right way that
could help the cafe. Bottleneck process is a chain of a process, in the limited capacity that can
reduce the capacity in the whole process. Supply overstock can be managed through this and the
restroom can be managed this way.

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Improve the staffs’ behaviour
The management of the cafe does not motivate the employees so that it could help the
staff to work and behave properly. The management can hire people with right values and
communicate the staffs with an example. The staffs could be reinforced to behave politely and
courteously with the customers.
4. Conclusions
In Tivoli Arcade outlet of Starbucks, the issues remain in the restroom, cleanliness of
restroom, the staffs’ behaviour with service quality and in managing the inventory. The outlet
has been facing the issues of consumers’ complains and my observation of the operation of
outlets found out severe issues in cleaning, quality of food items and services of the staffs. The
storeroom and restroom must be cleaned on proper time and staffs need to behave in a proper
way with the customers with courtesy.

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