Starbucks Case Study: Business Operations Management, BA50037E, UWL

This case study analyzes Starbucks' operational challenges and turnaround strategies, focusing on the 2008 financial crisis and subsequent recovery. It examines the company's operational principles, the implementation of the 4Ds (Discover, Dream, Design, Deliver) and five performance objectives (quality, speed, dependability, flexibility, and cost), and the adoption of an agile supply chain. The study further investigates Starbucks' supply chain objectives, emphasizing responsiveness and adaptability to changing consumer demands. The analysis includes an assessment of customer arrival rates and wait times at drive-throughs, highlighting the importance of efficient service delivery. The case study concludes by emphasizing how Starbucks simplified its processes to improve profitability and market share, demonstrating a strategic shift towards cost reduction and enhanced customer service.

MANAGING BUSINESS
OPERATIONS
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TABLE OF CONTENTS
QUESTIONS..................................................................................................................................3
1 Analysis of crisis of Starbuck from the perspective of operational principle...........................3
2. Principle of 4 D s and 5 performance objective, the way they are turned around Star buck..4
3 Most-likely supply-chain Objective.........................................................................................6
REFERENCES................................................................................................................................8
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QUESTIONS
1 Analysis of crisis of Starbuck from the perspective of operational principle
Starbucks is company that has expanded its business from single location in Seattle,
Washington to multibillion-dollar enterprise having more than 17000 retailer’s stores in more
than 50 countries. The company has initially involved in selling of products related to coffee
beans but recently have expanded to food items, beverage related accessories, equipment and
ready to drink beverage. Operational principles can be defined as set of rules and regulation that
company abided while operating its system, that are essential for putting the organisation value
into practices and getting things done in effective manner (Han and et.al., 2020). Therefore, the
key issue from the point of view of operational principle, analysed with the case study can be
described as follows:
Likewise, in 2008, the company to suffer financial crises because it was not sure that its
supply chain was not meeting the set goals, such as the overall cost of the company is increasing
day by day. Despite of the fact that the overall sales have been decreased to maximum extend,
for examples: supply chain expense pertaining to United States rose from US $750 million to
more than US $825 million, yet sales has decreased by 10 %. So, the company have neglected
reality as it has not focused on large problem that has resulted because of increasing cost of
supply chain for growth of firm. From the perspective of operational principle, company have
effectively grown its business in different parts of the world at rapid pace, but not lay emphasis
on creating effective supply chain. That could be helping in offering distributing range of
products and services from one destination to another for satisfaction of customer’s wants as well
as increase in profitability of the company. Hence, the results were that the overall price
pertaining to operational expense and supply chain were rising at steeply rate. It has also not
follow the principle of organisation in which it has not effectively plan and control the operation
that yield company in increasing cost and reducing overall sales (Besiou and Van Wassenhove,
2020). If, the manager has planned and analysed the total cost that company have to bear because
of outsourcing supply chain then such crises want be faced by the firm in any circumstances.
Furthermore, the cost analysis has helped in identifying that the 65-70 % of excessive
cost is because of outsourcing the supply chain or tied outsourcing agreement for contract
manufacturing, transportation and third party logistic. Thereby, the outcome was that the supply
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chain has expanded at fast speed but the cost significantly increases with situation of inflation
across worldwide. In addition to this, there are too many stores that company have started
operation during 2008 that has laid pressure on enhancing its supply chain so that the product can
be reach to final customers (Helo and Hao, 2019). Likewise, the Starbuck has also not adhered to
the principle of humility which means company should emphasis on saving its overall cost.
However, the organisation with an motivate to have operation in different parts of the world has
ignored the overall additional cost that will be incurred to outsourced supply chain.
At last it can be stated, from operational perspective that Starbucks operational was
success in delivering products to customers at set time frame. But the overall price that they have
to pay is being increased which lead in making them dissatisfied. Moreover, the manager has not
lay efforts on understanding the key issue or problem that has lead in increasing the overall cost
to the company despite sales volume has been decreasing (Abbas, Murtaza and Smarandache,
2020). Therefore, after that company by simplifying the process is able to improve its
profitability and market share in external environment.
2. Principle of 4 D s and 5 performance objective, the way they are turned around Star
buck
The Starbuck has turnaround through making use of 4 Ds and 5 performance objectives is
that it has focused on making transformation in the supply chain so that the overall cost can be
reduced to maximum extend. Such as it “reorganizing Starbucks' supply chain by simplifying the
complex structure with an aim that every job feels into four basic functions that is: plan, source,
make, and deliver. For example: planning group is being made in which all the individual that
are planning for production, new products launch and other are place in it (Liu, Zhu and Seuring,
2020). Moreover, the coffee and "non-coffee" procurement is two activities in which sourcing
activities of the firm has been grouped. Starbuck manufacture by contract manufacturing or in
house all these task were assigned to make" functional unit, while person responsible for
transporting products, distributing services to customers were grouped under deliver.
Moreover, after the reorganisation of supply chain has been done by organisation it focus
on reducing the cost and improve efficiency so that it is able to delivered range of products and
services to customers at minimum price possible. Likewise, it has lay efforts on understanding
the overall price paid, shipping cost incurred and type of contract the company have with its
outsourcing supply chain. All these has helped in access the actual cost incurred by company in
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supply products thus, it has decided to implement the 'should cost' models that set benchmarking,
process and ingredients (Tarafdar, Beath and Ross, 2019). Hence the company is able to
negotiate better prices, all these has helped in improving overall performance of the organisation
in retail sector.
The 5 performance objectives which Starbucks coffee has been focusing towards
providing higher quality goods and services for premium quality to customers are based on fast
and efficient service delivery, faster services promises. It also heads on profound focus on
embracing technology change advancing among operations and adopting flexibility for achieving
best cost advantage rapidly. Brand has been further extending huge range of higher quality
structure aspects, for strengthening developed domains reach in terms of machinery investments
and developed competitive goals. This has been also found to be also essentially specific, where
Starbucks aims to be one of the best brand globally for serving huge international demands
among consumers best preferences. Also, brand investments are proper for gaining best
principles in line with long term retained functional goodwill and enhanced working keen
expertise within longer run. This further heads on profound focus towards 5 performance
objectives timely completion, enhanced quality return goals and strengthening brand
engagement rapidly for higher quality optimisation. Also brand witnessed huge surge in recent
time, based on productive new decisions engagement and larger leadership within industry with
best premium products (Birke and Müller, 2021).
5 Performance objectives further retain to best determined productive outputs and
strategic vision for extending towards larger technical functional scope With faster adoption of
latest technologies, best marketing goals and higher multi platforms international reach
company has been found to be witnessing huge optimistic space. This further signifies
consumers productive quality output for strengthened vision, within longer run and also technical
determined growth within upsurged demand pace. Also Starbucks higher competitive
engagement with best global brands has been found to be highly effective, with global market
presence and strengthened performance benchmarks diversely enhancing. It can be also
analysed that with huge brand leadership in food and beverages industry globally, brand has been
leading consumers goodwill.
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3 Most-likely supply-chain Objective
The supply chain objective for Starbucks has to be in accordance with high end
specific aspects to reach long term objectives of faster customers orders delivery and high end
long term working scenarios. It can be analysed that Agile supply chain management has been
found to be most productive, for strengthening long term working proposition within competitive
industry framework. Starbucks, by adopting agile supply chain management will be adopting to
fast responsive strategies for business expansion, strengthening response time among consumers
preferences for fast expanded paradigms. It can be also analysed that further determined
pathways have been found to be also correlated towards deployed inventory timely effective
utilisation, where by further adopting to flexible suppliers will be done. It can be also analysed
that responsive supply chain objectives signifies consumer engagement to be varied based on
extended domains. Starbucks, being one of the best global brand, has been building best
innovation supply chain networks and enhancing working expertise for faster retaining surge
among consumers (Caiado and et.al, 2021). Also determined functional enhanced working
paradigms further open up huge scope for company to enhance extended channels, and develop
timely services for customers. Agile methodology has been found to be also competent based on
extended domains, where utilization of faster technology and specific correlated objectives
signifies best consumers services to be enhanced on. Further, the new determined long term
supply chain structure can be also critically analysed.
Agile supply chain method further signifies consumers engagement for services to be
widely fast as per demands further expanding within recent business goals for higher quality
determined growth. Starbucks will be able to deliver huge determined pace significantly,
enhance supply chain mechanism functionally for further competent functional rise based on
extended derived benchmark (Maheshwari, Gautam and Jaggi, 2021). The brand with rising
working corporate mechanism within structure goals, aims to further advance up rise, by using
best supply chain technologies and retaining consumers best standards goodwill dynamically.
Also, by enhancing further technical goals expertise company mechanism aspects can be also
technically diversified for faster technical exposure. This has been also found to be highly
effective for best revenue goals with increased flexibility and demand driven planning, where
agile supply chain reacts as per changing consumer demands rationally.
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Also mechanisms for agile supply chain methodology has been found to be
highly competitive, for bringing responsive productive diversified growth among scenarios and
towards faster completion of orders. Agile supply chain will enhance company flexible and
receptiveness towards services, which further builds timely enhanced competitive working
goodwill. Also methodology within supply chain sector has been found to handle unpredictable
surge in demands from consumers and further develop expertise. Delivery of finished products
is at good timely term where enhanced working vision develops huge scope for higher quality
engagement, based on productive new output factors. The Strabucks has been also facing huge
specific demand decline among consumers choices, where this has impacted lower competencies
to further decline in longer run. Brand quality maintenance, will further enhance up by using
agile methodology and retain wider technical working specifics for strengthened competitive
output in timely manner (Pournader,,and et.al., 2021). This further has been also found to be
widely essential, based on extended working expertise goals and enhanced longer primitive
consumers marketing paradigms which builds wider quality return. As brand has been
witnessing huge functional rise within working domains, by adopting to agile supply chain
methodology further extended domains can be enhanced on with huge functional goals
competent engagement. Also long term supply chain objectives are further developed on, when
company vision is practically worked on profoundly based towards high quality return rapidly
for best brand value growth (Bui and et.al, 2021).
4. Average number of customers arriving at till and average time they must wait before
existing star buck drive thru
Starbucks, has been found to have huge customers arriving high end drive through where
average number of customers arriving at till and average time they must wait holds huge
importance for strengthening productive goals.
The average time required for ordering and receiving the order is 5 minute so it is
assumed that there are 12 cars are being served. Then the average number of customers arriving
at the checkout can be stated as 25/12= 2
It means that arrival rate of customers is 25 per hour and service rate is 60/5min = 12 per
hour.
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For further improving customers service, new specific working goals and technologies have to be
developed on for prioritizing best technical long term retained goodwill goals within market
domains. This shows company has to further develop best vision and high end advancement in
supply chain technologies, for fastening its services rapidly within business domains.
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REFERENCES
Books and Journals
Abbas, M., Murtaza, G. and Smarandache, F., 2020. Basic operations on hypersoft sets and
hypersoft point. Infinite Study.
Besiou, M. and Van Wassenhove, L.N., 2020. Humanitarian operations: A world of opportunity
for relevant and impactful research. Manufacturing & Service Operations
Management, 22(1). pp.135-145.
Birkel, H. and Müller, J. M., 2021. Potentials of industry 4.0 for supply chain management
within the triple bottom line of sustainability–A systematic literature
review. Journal of Cleaner Production, 289, p.125612.
Bui, T. D.,and et.al,., 2021. Sustainable supply chain management towards disruption and
organizational ambidexterity: A data driven analysis. Sustainable production and
consumption, 26, pp.373-410.
Caiado, R.G. and et.al, 2021. A fuzzy rule-based industry 4.0 maturity model for operations
and supply chain management. International Journal of Production
Economics, 231, p.107883.
Han, K and et.al., 2020. Ghostnet: More features from cheap operations. In Proceedings of the
IEEE/CVF Conference on Computer Vision and Pattern Recognition (pp. 1580-
1589).
Helo, P. and Hao, Y., 2019. Blockchains in operations and supply chains: A model and
reference implementation. Computers & Industrial Engineering, 136. pp.242-251.
Liu, Y., Zhu, Q. and Seuring, S., 2020. New technologies in operations and supply chains:
Implications for sustainability. International journal of production
economics, 229. p.107889.
Maheshwari, S., Gautam, P. and Jaggi, C. K., 2021. Role of Big Data Analytics in supply chain
management: current trends and future perspectives. International Journal of
Production Research, 59(6), pp.1875-1900.
Pournader, M.,and et.al., 2021. Artificial intelligence applications in supply chain
management. International Journal of Production Economics, 241, p.108250.
Tarafdar, M., Beath, C.M. and Ross, J. W., 2019. Using AI to enhance business operations. MIT
Sloan Management Review, 60(4). pp.37-44.
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