Evaluating Supply Chain Management Strategies in Hospitality Business

This report provides a comprehensive analysis of supply chain management within the hospitality industry, using Starbucks as a case study. It delves into the concept of supply chain management, its stages of resourcing, product design, and development, highlighting Starbucks' centralized system and its journey from bean to cup. The report evaluates the integration of supply chain principles and processes, emphasizing their role in enhancing efficiency and achieving competitive advantages. It also examines the importance of effective supply chain management from the perspectives of various stakeholders, including customers, suppliers, retailers, and distributors, and explores the interrelationship between supply chain functions and other functional areas within the organization. Furthermore, the report critically evaluates Starbucks' supply chain strategy, proposing improvements and justifying recommendations to optimize the supply chain for sustained business growth and customer satisfaction. This analysis underscores the significance of a well-managed supply chain in the hospitality sector, particularly in ensuring quality, cost efficiency, and customer loyalty.

Exploring the nature, role and
contribution of supply chain
management to a hospitality
business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Supply chain concept, throughout the stages of resourcing, product design and
development................................................................................................................................1
M1 Evaluate how integration of supply chain concept, principle and processes improve
efficiency for hospitality organisation........................................................................................2
D1 Critically evaluate supply chain concepts, principles and processes for effective supply
chain management.......................................................................................................................3
TASK 2............................................................................................................................................3
P2)The importance of effective supply chain management from the perspective of customers,
suppliers, retailers, distributors and retailers...............................................................................3
M2 Critically evaluate importance of physical information and financial management within
supply chain................................................................................................................................5
TASK 3............................................................................................................................................6
P3)Cross functional and integrated approach of supply chain management with other
functional areas with in a hospitality organisation......................................................................6
M3 Evaluate implication of interrelationship between supply chain and other functional areas
using theories concepts...............................................................................................................8
D2 Critically evaluate supply chain interrelationship with other functional areas within
hospitality organisation and making recommendations..............................................................8
TASK 4............................................................................................................................................9
P4) Evaluation of supply chain management strategy................................................................9
M4 Critically evaluate supply chain strategy within hospitality company and present
proposals for improvements......................................................................................................10
D3 Justify and recommend improvements of supply chain strategy for hospitality organisation
...................................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Hospitality industry is a huge field which comes in service industry, that involves the
lodging, food and drink service, event organising, theme park and transportation, that all terms
comes under the hotels, restaurant, bars, coffee shops. Supply chain management is mainly focus
on the administration of supply chain. These activities take the benefits of consumer value and
also accomplish a sustainable competitive advantage. It shows the effort through supply chain
firms to develop and run supply chain in most significant and best possible way. This report
includes the supply chain concept, throughout the stages of resourcing, product design and
development. It also involves the importance of supply chain management that can interrelate
between the supply chain and other areas within the context of Starbucks. At last it involves the
recommendations that are useful to improving the supply chain strategy for hospitality business.
Along with the overview aspects of the organisation in terms of customers, retailers. This whole
report is based on the context of Starbucks. The Starbucks is a leading American multinational
chain of coffeehouses that is headquartered in Seattle, Washington. Within United State it is one
of the second largest waves of coffee culture(Barata, Da Cunha, P.R. 2018). The company was
founded on 1971, March 30. It is situated in around 31256 locations in worldwide. Starbucks can
majorly deals in coffee beverages, smoothies, tea, sandwiches and bakes goods etc.
TASK 1
P1) Supply chain concept, throughout the stages of resourcing, product design and development
The concept of supply chain management is about the flows of product and services. It
involves the process that convert raw material into finished goods. It includes the present contour
of a enterprise supply side activities to enhance the consumer value and gain competitive benefits
in the market. The concern brand which is, Starbucks it uses centralized system to lead its supply
chain management and arrangements network around in six continents. This organisation is
looking forward to operate and manage various global statistical distribution centres with overall
control. Supply chain works in circular motion which keeps the business on track, in which
business will smoothly and efficiently with effectiveness of work (Tiwari, Wee, and Daryanto,
2018). The stages of resourcing Starbucks changed its supply chain. This organisation wasn't
sure about that supply chain acquired that goal, but they come from bean to cup. Starbucks is
known for its services quality of product along with taste. It enhances the productivity also
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generate high revenue and profit maximization. This organisation take well run supply chain to
sure about barista pours a adorable cup of Starbucks coffee. That journey bean to cup is a
sophisticated. Coffee and other trade goods should be sourced from over all the globe and
acquired successfully delivered to Starbucks organisation. It’s around 16700 retail store which
serve around 50 million consumers in various countries(Fantazy, and Tipu, 2019).
Starbucks developed the product through the social media, it is a most perceptible coffee
house in the global nation. The success behind the Starbucks it providing great ambiance, store
fun, which a different menu items as per the taste of people. This organisation pushing their
competitive advantage to other domestic coffee houses through changing the customer previous
aspects by their use of social media such as Facebook, twitter, Instagram which reach the high
million followers. Starbucks covered the all social media, which helps to innovate and improve
their goods in crowdsourcing horizontal surface. The surface encourages the consumers to give
their ideas for making the better product. This things shows the customer priority, in which
customer feel happy and it seems familiar towards the organisation. It also improves the
consumer previous aspects, and gives the customer authority to provide feedback on what they
like and what changes organisation need. Starbucks replaces the cognitive content and need for
lengthy and expensive focus groups to leverage thoughts for product development. This process
gives authority to give urgent feedback where users of the level after comment on improvements
they wish too look and have other users vote to them. These all factors structured the
organisation in ethical manner which gives advantage to the organisation. Customer also involve
in this process to introduce new flavours such as cafe mousse, mocha coconut frapino. This thing
gives proper customer satisfaction and looking forward to grab more attention towards the
consumer.
The evaluation of SCM in term of hospitality, if company changes their menu items
according to season and also include some complementaries, company will generate more
revenue and also customer will happy. It creates the expansion of business(Stipanović, and
Rudan, 2018).
M1 Evaluate how integration of supply chain concept, principle and processes improve
efficiency for hospitality organisation
From the above explanation it is evaluated that Starbucks is a leading coffeehouses in the world
and in this supply chain management is very essential. Within hospitality organisation supply
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chain includes the processes, designing and many more that helps in gaining the higher profits
and revenues. To understand the supply chain management, it is evaluated that Starbucks can
focus on changing their food items as per the seasons and processed accordingly so that more
and more customers are to be included as it satisfy the needs of customers. In this and highly
focus on the processed food that can enhance the image of the company and their overall profit
margin so that firm will sustain for a longer period of time. The integration between supply chain
and processes of the company can improve the overall efficiency of the organisation so that best
results can be enjoyed by company. Supply chain plays a important role in the business
enterprise to gain the long term advantage(Motta, and Sharma, 2020).
D1 Critically evaluate supply chain concepts, principles and processes for effective supply chain
management
From the above analysis it is critical evaluated that supply chain is very effective to gain the
high profitable results. In this Starbucks can convert their raw material into finished goods
as per the season so that more customers are to be attracted. In this manager of the company
can mainly focus on adapting the supplying chain for segmenting the customers that is
useful to align the demands as per the supply chain. In this they can differentiate the
products for the customers by offering the seasonal products so that high profitable can be
received it will reflected as a positive factors for the firm. But at the same time it also impact
negatively because due to this more cost can be invested by the organisation which affect the
overall business operating cost and also enhance the price of the products that they will
offered to their customers.
TASK 2
P2)The importance of effective supply chain management from the perspective of customers,
suppliers, retailers, distributors and retailers.
The importance of effective supply chain management which give direct changes to
customer service. The actual good and correct quantity should be delivered in given time, in term
to pacify both manufacturer and supplier. Customer looking forward to know the actual
destination they should acquire the products which they need. It boost the customer service
which give the actual assortment of product and actual quantity. It deliver their product on right
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time, Starbucks giving the home delivery on acceptable time which mandatory for organisation.
This thing gives the proper customer satisfaction (Al-Aomar, and Hussain, 2018). It also
reduces the operating cost, in term of purchasing cost retailer based upon supply chain to fastly
deliver expensive parcel to reduce retention expensive stock in stores any longer than essential.
It involves the decrement of production cost, manufacturer based upon supply chain to
reliably present material to assembly production plans to avoid material shortages that would
shutdown production. Manufacturer and retailer both are depend on supply chain management
which look forward to design network that gives consumer service goals as per the overall cost
(Amiri, and et .al Banaitis, 2020). In the context of distributor supply chain management
helps in enterprise. It play a critical act in introducing the increasing complexity of today's global
supply chains. It assist and optimization the flow of goods, information and finances, allowing
organisation, to build better relationship value and change overall enterprise entity. Supply chain
management have become high taxing due to variable, unpredictable demands of today's
consumer. Supply chain management enhances the customer demand for response times as soon
as possible, followed through selecting, hiring, and bear a skilled individuals, customer demand
for lowered delivered expenditure also enhances, competitive intensity and highlights the
consumer service expectations. Which gives advantages to the organisation, this strategy save the
expenditure and reduces the cost. For instance, Starbucks always maintain supply chain with new
innovation and creation which gives the higher opportunity for increasing the productivity,
Starbucks always come up with new variations according to season which impact on customers
and they willing to by that particular product(Mardani, and et al ., 2020). Information is
important to supply chain outcome because it gives the relation on which supply chain processes
execute financial transactions and higher authority makes decision. Without any data higher
authority cannot know what consumer need and how much stock in inventory, when more goods
should be produced or transport (Porcu, and et .al., 2019).
Financial supply chain management this term involve the all financial process of the
organisation at the atomistic level, then showing them as an individual processes. It covers the
part of ordering, invoicing, reconciliation and payment. The overall objective of financial supply
chain is to acquired and cross check the visibility into all these process that supply chain of
organisation can be significant as accomplished and take advantage of cost saving throughout the
same. The concern company looking forward to build the employee for the organisation with in
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certain time of period which is very beneficial for the company. It gives training and
development and give the orientation before joining to elaborate about the organisation which is
easily understandable for the employee. Starbucks is known for his quality of product brand
value along with brand image which increase the monetary value, which is basic need of the
organisation. Company gives higher preference to its employees because if employee satisfy,
they will give customer satisfaction. This thing shows company loyal towards their employee
along with the consumer. Supply chain management gives the benefits to the organisation which
shows the overview of the company, and show the things are going on in appropriate manner.
Supply chain administration involve the vertically integrated partnership, procurement, logistics,
product life cycle management, pricing and lead times and demand management, which is
mandatory for all organisations. It makes better collaboration information flow in projecting task
for organisation. Change the quality control and also improved, high on demand, shipping
optimization, reduces the cost, changes the risk mitigation, looking forward to improve cash flow
fund which shows the stability for the organisation which gives the higher preference to business
entity. Its adopt the consumer requirements, maintain the relationship between provider and
vendors. Greater efficiency includes the product innovations, strategies, methodologies, long
term tactics and forecasting demand. This thing gives the great position to forecast and also
makes moves according to time (Soheilirad, and et.al Zakuan, 2018)
M2 Critically evaluate importance of physical information and financial management within
supply chain
From above analysis it is critical evaluate that physical information and financial management is
very vital for the supply chain because without it supply chain cannot gives the profitable results.
In this employees are the major part within the hospitality company to maintain supply chain
working smoothly. In this financial management also essential because they can reflect the
budget for supply chain so that optimum utilisation of resources can be done. Both physical and
financial resources are not working properly than firm will face the major issues related to
reducing the profits and sustainability.
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TASK 3
P3)Cross functional and integrated approach of supply chain management with other functional
areas with in a hospitality organisation.
Cross function approach include the sourcing of new product development of team mates
and other commodity management such teams are acquired time reduction target, cross lines
boundary ownership of undertaking and difficulties, better accomplishment of organisational
cognitive content and professional improvement of team mates. This approach buying groups are
essentially teams of specialist from individual department and buyers are also looking forward to
put together for development of the organisation along with specific sourcing strategies and
plans with changes effort are focused on integration of the buying process around from different
business unit (Gardas, ,and et .al., 2019). A cross functional supply administration refers groups
and personnel from different organisational functions in which brought together to accomplish
clear and powerful aims and objectives that unable to achieve without team member. In addition
of Starbucks is a living model of employee learning, ownership involvement and
communication. The outcome is a excellent goods coupled with consumer service that is caring
and responsive. Sales growth around 65 percent on the cake of icing present annually over the
last year while net income skyrockets by 70 to 100 percent a year. Starbucks include the self
managed work force at its coffee beans roasting plants. Even though manager of plants and
supervisor are responsible for the initial company of the teams, partners are looking forward to
take over the day to day working of the groups involving decision making. Cross functional
associate of mate and superordinate are used to make hiring decisions and plan of action (Bastas,
and Liyanage, 2019). An integrated approach to supply chain management it include building
coalition across the entity process by the supply chain petition suite. Idea it is the flow of
components and data throughout the supply chain becomes the incorporate process. In the
context of Starbucks this concern organisation uses a perpendicular integrated supply chain. In
which it involve the every step of the organisation of its supply chain process, all the direction
from the coffee bean to the mug of coffee sold to customers. Starbucks offer excellent diverse
range of opportunities and advantages to its mates. New stores are willing to open in the rate of
three to five on weekly basis. Personnel are making careers at Starbucks instead of dropping out
(Filimonau, and Naumova, 2020). Companies are built about a group of practices, each of which
gives support for the production of the enterprise. Working departments serve particular purpose
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with an corporation to acquired its objectives. Information required the individual or group for
the data of the organisation which defines the desire to locate and obtain the information to
satisfy the aware and insensible need. In which employees are aware about the organisation and
they know everything which relates the company. Information need are inseparable
interconnection which makes the excellent relationship between employee and employer.
Information need related to, distinct from data requirement (Garai, and Roy, 2020).
The other function areas of supply chain is purchasing, manufacturing and inventory
management, transportation, warehouse and consumer service.
Manufacturing: it involves the manufacture of product for use sale using labour or machine,
tools, chemical, formulation and biological processing (Boella, and Goss-Turner, 2019).
 Inventory management: it includes the active employee to maintain and optimum number
of value of each inventory items.
 Purchasing: This process includes the achieving of goods or services to fulfil the goal of
an corporation.
 Demand planning: This process forecast the consumer demand to take execution of
demands by company supply chain and administration.
 Ware housing: it includes the storage of goods and materials or stock of the organisation.
 Transportation: it includes deliver the product from one place to another place. It use
various modes road, water, cable, air etc.
 Customer service: in this process giving the customer satisfaction in term of goods and
services(Palang, and Tippayawong, 2019).
For instance, If stark bucks adopt this strategy company will raise the brand value and image
which gives higher opportunity to expand the business, and increase the customer footfall
Starbucks focus on its mission and vision which is inspire and nurture the human spirit one cup,
one person and one neighbourhood at a time and vision guest like family it will be loyal and give
all perspectives (Golubovskaya, Solnet, and Robinson, 2019). The sales team of Starbucks deal
with customers and produce the goods. This technique used to increase sales varies between
company, but some of similar are sales, advertising, direct through sales, by the representatives.
Purchase department is responsible for operating, how many goods or stock which is necessary
at particular time and purchasing according to stability. Marketing department do the promotion
activities in which they do advertising the goods or service of the company. It may be integrated
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with the sales factors. Finance is basic function of the finance area is too sure there is stability of
financial aspects with an corporation and it supports to cash flow and along with day to day
transactions. Management is work as group individual in which they are coordination to each
other and work for organisational goal for select their aims and objectives.it includes the various
activities to establish the business which can run significantly and efficiently. Human resource
department plays very important role in organisation for viewing the recruitment of candidates
and payroll along with resignations and dismissals. Which encourage the employee towards the
excellence for grab then success and make endeavour future for themselves (Ahmed, ,and et al.,
2019).
The relationship between supply chain and other functional areas is SCM include the
proper function and it works in circular motion with proper arrangements which shows the
product availability in certain time of period. Either functional area includes the planning,
purchasing, demand, customer service, ware housing etc. it is segmentation of work which attain
the over all production from starting to end. This process enhances the productivity along
revenue generation and profitability for the organisation. If these factor are proper this will give
advantage to the company in overall aspects (Huang, Potter. and Eyers, 2020).
M3 Evaluate implication of interrelationship between supply chain and other functional areas
using theories concepts
From above explanation it is evaluated that interrelationship between supply chain and
other various departments is very effective because without integration no task can be
performed effectively and efficiently. This will impact positively on the smooth
functioning of the task that will attract more and more customers that is beneficial for the
organisation. In this integration between manufacturing and supply chain helps in
producing the products properly so that cost cannot be included more. In this inventory
aspects is also be beneficial because without it supply chain cannot delivered the goods to
the customers appropriately and gaining high profit margin.
D2 Critically evaluate supply chain interrelationship with other functional areas within
hospitality organisation and making recommendations
It is critically evaluate the interrelation between supply chain and several other department is
impacted the organisation in positive and negative way. In terms of positivity effective
integration between supply chain and several other departments that are manufacturing,
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inventory etc that are helpful to attract the large number of customers and completing the task in
smooth manner. Further it will impact negatively by creating conflicts and biasedness so that
accomplishing the task is very difficult. For this it reflects the several recommendations that are
proper communication, effective leadership style so that profitable results can be enjoyed (Tipu,
and Fantazy, 2018)
TASK 4
P4) Evaluation of supply chain management strategy
Supply chain management strategy includes the business strategy in which takes the
strategy how to compete with least cost, differentiation and focus. Which gives the overview of
product. In organisation strategy it identifies the how a organisation will function in its
atmosphere. Supply chain strategy justify how to give the satisfaction to the consumer, how to
expand the business, how to compete in another atmosphere and how to lead the company,
develop their qualities with in the enterprise and how to acquired financial objectives (Verma,
Dixit, and Singh, 2018). In term of competitive advantage uses the strategy to create them,
when company able to give same advantage from a goods or service at a lower than a competitor
which is low cost advantage, give benefits that transcend those competitor goods and service
which give differentiation advantage or build a product or service that is better suited. This
strategy involves the proper planning for the company in which they build the business strategy,
which gives ideas how to increase the business how to elaborate the things. How to acquire
superior level financial and market outcomes and how to develop the competitive advantage, it is
mandatory for the organisation because, they have to know where they are standing, and take the
experience from previous aspects which they are able to fight against the competitor part in
terms of product and services gives the higher opportunity to raise the name of the organisation
which gives advantage for long term tactics and hold the market place to build their brand value.
The goods services design for huge audience along with market segment. There are many ways
that methodologies combined in strategic planning or made into hybrids such as normal
enterprises strategy that are generic to many corporation and providers involve the variations. In
which best cost build the hybrid and differentiation about product and services, low cost includes
the no frills basis that are hard to compare. Wide differentiation creates goods and services
attributes that appeal to many buyers willing to acquired different types of products. Focus
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differentiation involves the unique methodologies to target the niche market in which they meet
unique purchaser demand or need (Mehdikhani, and Valmohammadi, 2019).
M4 Critically evaluate supply chain strategy within hospitality company and present proposals
for improvements
It is evaluated that there are several types of supply chain strategies within the hospitality
sector for this some improvements can be needed so that targets can be achieved
effectively. For improving the strategy related to supply chain this report provides the
several recommendations so that supply chain can be enhanced effectively and efficiently.
It mainly involves communication, education, effective leadership and also continuous
improvements so that best results can be attained so that firm will survive for a longer
period of time.
D3 Justify and recommend improvements of supply chain strategy for hospitality organisation
From the above analysis it is justified that company needs some improvements in supply
chain strategy by educating all the department of the company so that goods can be supplied
effectively and efficiently. In this communication is very essential because without it no task
can be done appropriately. In this firm will majorly emphasis on leadership style so that
every member participation can be reflected which satisfied the needs of the workers and
helps in gaining the profitable results within hospitality organization.
CONCLUSION
From the above report it is concluded that supply chain is one the prominent term within
organisation to attracts the customers and gain the profitable results in the long term
sustainability. This report helps in acknowledging supply chain concept, principles
throughout the stages of product design which is useful to gain the competitive advantage
and enhance the high customer base. Further it includes the benefits of supply chain that is
highly reflected on customers, employees so that they are satisfied with the company and
helps in buying the products more. Further it involves the cross functional and integrated
approach within supply chain which is effective for smooth functioning of the operations
and gaining the revenues and at last this term evaluated the several strategies of supply chain
so that company will gain the profitable advantage for enjoying the long term advantage.
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