SUPPLY CHAIN MANAGEMENT

When Starbucks' supply chain transformation was first getting under way in 2008,
the company brought in professionals from the outside to support its re-enginee
ring program.
But the coffee retailer is taking a different approach to recruitment these days
. "Now, we want to grow our own talent to support the growth of our business, in
North America and globally, and to support normal staff turnover," says Peter D
. Gibbons, executive vice president of global supply chain operations. "Creating
a strong pipeline at all levels is part of our core mission to improve service,
lower cost, and develop talent."
The initial phase of the recruitment program will be aimed at building out the U
.S. organization, followed by a similar staffing process for the company's inter
national operations. After that, Starbucks will focus on creating an internship
program with an eye toward recruiting underclassmen interested in a supply chain
career with the company.
Throughout the fall of 2010, executives at Starbucks visited six universities to
interview undergraduates and graduate students with backgrounds in logistics, e
ngineering, and operations research. From this process will come a select group
of young talent who, starting in July 2011 and continuing for an undetermined nu
mber of years, will be hired and groomed to head Starbucks' supply chain for per
haps as long as the next two decades.
The company will only consider the top 10 percent of the graduating class of the
schools it partners with. The ideal candidates will have exposure to Fortune 50
0 organizations either through prior work experience or through internships. In
addition, they must demonstrate prior leadership experience and be willing to ro
tate between domestic and international positions.
To help improve employees' skills and knowledge, the company has developed progr
ams covering 30 supply chain capabilities, as well as training manuals for new h
ires, Gibbons says. "The point is to ensure that development plans cover skill-b
uilding and development for each individual," he explains. The company also is t
esting a supply chain training system that will "provide the bulk of our technic
al training and will add formal coaching and mentoring to round the process out,
" he adds.
If successful, the strategy will yield multiple benefits, according to Gibbons a
nd his team. It will brand Starbucks as a bona fide supply chain organization wi
thin both academia and industry. It will ensure a seamless human resources trans
ition over time as Gibbons and his team near retirement. And the company will re
ap the intellectual windfall of advanced concepts that graduates take out of sch
ool and into the workplace. Gibbons says Starbucks expects to learn as much from
its new hires as they will learn from the company.
OPERATIONS MANAGEMENT
After successful test marketing, local baristas (brew masters) were given traini
ng for 13 weeks in Seattle.
Starbucks did not compromise on its basic principles. It ensured similar coffee
beverage line ups and No Smoking rules in all its stores across the globe. When
Starbucks entered into a joint venture with Sazaby Inc. to open Starbucks stores
in Japan, analysts felt that Starbucks was unlikely to succeed. They even advis
ed Starbucks to forego its principles such as No Smoking, and ensure that the si
ze of the stores would not be more than 500 square feet due to the high rents in
Japan. However, Starbuck stuck to its No Smoking principle, which attracted you
ng Japanese women to the Starbucks stores, and the size of the stores was 1200-1
500 sq ft
similar to the stores in the U.S. Proving analysts wrong, Starbucks be
came successful and, in the first year itself, it opened more than 100 stores. A
ccording to Starbucks sources, listening to its local partners also helped. Starb

ucks took advantage of its localpartner Sazaby s knowledge about Japanese coffee d
rinking habits and introduced new products such as Green Tea Frappuccino, which
became popular. Starbucks was successful in attracting a young crowd in all its
Asian markets, as young people in these markets were eager to imitate the Americ
an culture. It even adapted itself to the local culture to gain market acceptanc
e.For instance, Starbucks offered curry puffs and meat buns in Asian markets as
Asians generally prefer to eat something while having coffee.
Analysts felt that the strong coffee drinking culture in Europe posed both chall
enges and opportunities for Starbucks. It would face tough competition from the
sidewalk cafes of France, coffeehouses of Vienna, and espresso bars of Italy, th
at had developed a strong coffee drinking culture across the Continent, exposing
Europeans to the best coffee in the world. However, Starbucks executives commen
ted that Europe used to make
great coffees, but, by the late 1990s, the taste had gone away.
In 1998, Starbucks opened its first store in England, and soon expanded its pres
ence to Switzerland, Germany, and Greece. It was generally felt that though old
people would stick to the existing coffee houses, the young would be
attracted to Starbucks. Helmuth Spudich, editor, Der Standard (a Vienna-based pa
per), said that The coffeehouses in Vienna are nice, but they are old. Starbucks
is considered hip.
Another important factor that could lead to the success of Starbucks in Europe w
as its ambience and No Smoking environment, unlike traditional European coffee b
ars. The self-service mode of operation also attracted the young crowd as it was
observed that youngsters did not like to wait for the waiter to come and take or
ders. According to Starbucks sources, it was successful because it was not just
selling coffee but an experience, which was unique only to Starbucks stores. Mas
len, President of Starbucks International, said The coffee id good, but it s just t
he vehicle. The romance of coffee, the occasion, the community is what Starbucks
is selling. In the Middle East, Starbucks
went for licensing (except in Israel where it had a joint venture). Respecting t
he culture in the Middle East, Starbucks stores offered segregated sections for
ladies. In September 2002, Starbucks announced that it would increase the number
of international stores to 10,000 by
2005. However, analysts pointed out that it would be difficult for Starbucks to
make profits in international markets, and they were soon to be proved right.
CONTROVERSY
In certain pockets of the US, it speaks to something larger than the vessel from
which we drink our hot, caffeinated beverages. To some, the naked red cup, unad
orned with symbols like holly or snowflakes, is an affront against the Christian
faith, a cut against Christianity. For others, it's a chance to beat their ches
ts and scream about Christian and conservative stupidity into the faceless void
of the internet.
The culture wars have come to disposable paper Starbucks cups.
Americans fighting over what is printed on a coffee cup designed by a billion-do
llar company to promote conformity sounds like cold German satire: While the wor
ld rages on and problems like starvation, a massive refugee crisis, and homeless
ness remain unfixed, people in America including an American presidential candid
ate are arguing over a red beverage container.
But there's nothing satirical about this. The conflict over this dumb cup is so
passionatethat the original version of a viral "Starbucks' War on Christmas" vid
eo has more than 14 million views. It's also an unflinchingly real slice of Amer
ican internet culture and the outrage machine that fuels it.
COMPANY BACKGROUND
We offer the finest coffees in the world, grown, prepared and served by the fine

st people. Our employees, who we call partners, are at the heart of the Starbuck
s Experience.
Our store partners are committed to coffee knowledge, product expertise and cust
omer service.
We believe in treating our partners with respect and dignity. We are proud to of
fer two landmark programs for our partners:
Comprehensive health coverage for eligible full- and part-time partners and equi
ty in the company through our Bean Stock program.