MGMT 501 - Organizational Structures and Business Processes

DeVry University / Keller Graduate School of Management

Week 3
Case Study

Martins Debo

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Table of Contents

INTRODUCTION 2

IMPACT OF OPERATION, PRODUCTION AND TECHNOLOGY ON GOODS AND

SERVICES 3

STARBUCKS SUPPLIER AND VALUE CHAIN 5

MONITORING AND CONTROL 5

CONCLUSION AND RECOMMENDATIONS 6

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INTRODUCTION

Starbucks has become the coffee giant; there is no contesting that. They started as a single store

in Seattle to become a store with over 29,000 locations worldwide. Massive expansion has

taken place with careful planning and constant improvements in their operation management.

The goal is to give customer a good experience, make it memorable and get them to frequent

the store more. The whole Starbuck corporate idea to customer is to create the right product, at

the right place, at the right time. The Starbucks Experience is a sum of its operation from the

very start of sourcing for the green coffee beans to the plant locations (they have coffee bean's

supplier flowing to these locations) where the beans is roasted.

At these different roasting locations, they have team professionals who are experts in roasting,

planning, warehouse management, packaging, maintenance, engineering, and logistics and are

engaged in continuous improvement and process optimization to produce a Starbucks product

for onward distribution.

IMPACT OF OPERATION, PRODUCTION AND TECHNOLOGY ON GOODS AND

SERVICES

The rates of consumption of coffee which has risen dramatically high, since the past 10 years and

coffee have become more popular in its daily sales more than Coke. Starbucks has put in place a

commendable operation management system and has made them in the business of coffee to

become the number one with the largest share of the market.

The goal of Starbucks is to transform all their resource both human and brewing equipment to

consistently produce high quality coffee. They use high specialty machines to produce authentic

coffee brew, baristas are trained on the job on customer service and coffee brewing. The aim is

to be able to serve customer within two minute in the store right from the moment of entering the

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store to the moment of exiting the store. From the moment a customer steps into Starbucks till it

leaves the store is a complete process:

Looking at the details of a customer experience in the store:

 Customer steps into the store

 Customer lined up for the ordering in the waiting area

 Customer reads the menu to makes the choice

 Customer makes contact with the cashier – Make the order/pay for the order

 Customer waits for the coffee

 Customer gets the coffee

 Customer leaves

Looking at the details in of a Barista in a single process:

 The Barista receive the order

 The Barista confirms the order and the payment

 The Barista makes the coffee

 The Barista delivers the coffee

 The Barista repeats the process with the next customer

This is a process because there is continuous flow of products being produced. These processes

have allotted time for it to be completed and Starbucks is continually improving on this process

to reduce the time it takes to serve their customers.

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All these activities are meant to be a beautiful experience for the customer in a well-coordinated,

designated area of the store like the entrance, waiting area, the counter, the cashier, the seats and

the recycle counter.

Starbucks also have an added advantage of their new innovation of the phone App where

customers can pre-order and pay in advance and in this process a queue is not a requirement.

STARBUCKS SUPPLIER AND VALUE CHAIN

Starbucks has a daily responsibility to deliver products to all its retail stores. Starbucks has a

distribution channels and outlets worldwide responsible for carry out this operation and it has

stand the test of time, they keep Starbucks products flowing from suppliers to customers

uninterrupted. Starbucks has a world-class Global Supply Chain organization that manages its

activities - Everything in your local Starbucks store gets their through supply chain. Starbucks is

greatly involved in the journey of the coffee bean all the way from the planting in the various

coffee farms to roasting the coffee in their roasting locations to the nice cup of coffee purchase

by customers at every store. Starbuck is involves in planning everything from raw material

through manufacturing to the retail markets. They source for the best coffee in the world.

Starbuck distribution channel do deliveries on a daily basis – the amounts of daily deliveries are

huge couple with the fact that they have to maintain the proper thermal condition for all the

products.

MONITORING AND CONTROL

Starbucks makes the coffee but they are heavily involved in sustainability of all their allied

products – Starbucks works with the manufacturers of the cups, napkin, the dairy items and all

what supports their business that is in their store

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The risk and challenges encounter by purchasing raw materials from many remote locations of

the world encumbered with many different cultures and business practices may be overcome

with the right personnel put in place with the right tools for measuring risk and militating against

them.

CONCLUSION AND RECOMMENDATIONS

The USA market is becoming over-saturated; Starbuck should start focusing more on

international growth and understand the emerging market internationally.

They can take advantage of their consumer packaged goods to enter into international market.

Starbucks should consider redesigning store for more comfortable for sitting down and enjoying

each location based on what the locality wants not just building a standard look alike store

everywhere.