Starbucks Supply Chain Plan
Starbucks has a supply process involving its internal management with the external market. The internal process includes the factory production units and the logistics within the company process, which link each other to ensure regular production and sales. The chain comprises the inbound and outbound materials supported by management and other external factors for continuous performance. The materials are stored in the warehouse where the final consumers can purchase them. Starbucks has highly equipped storage systems that ensure that the products are maintained and delivered in the right quantities and value. The company plan entails the logistics operations from the supplier point to the consumer sales through the factory production unit. In addition, the company’s management offers systems that enable the supply chain to move effectively and ensure that the products access the market within the shortest time.
Value Chain and Flow of Structure
The Starbucks value chain process involves the movement of products from the vendors to the production unit and finally to the consumers. Therefore, the value chain consists of inbound logistics, operations, outbound, marketing and sales, and later the service delivery to the final customers. The value chain is facilitated by company infrastructure, procurement process, human resource activities, and technological advancement available within the firm. All the processes involved in the value chain link to each other to ensure that productivity is consistent and the products delivered to the final consumers are of high quality. Starbucks has ventured into a long value chain process that enables the value process to be effective. The available products access the market when they are in their safe conditions. At the company premises, there is well-structured equipment for proper storage of the inputs before they are processed and later dispatched to the final consumers.
Inputs
The Starbucks company deals mostly with beverages and other related products. The inputs, therefore, involve raw coffee which has not been processed. In addition, the company uses its available resources to ensure that the production of coffee is effective and consistent. The company has differentiated its inbound logistics system to ensure that they have high-quality products as the inputs and enable the final products to be of high quality. In addition, the Starbucks company ensures that all its input is properly handled to reduce the damage levels and maximize the profits, which would later facilitate the growth plan. Therefore, the key inputs include the raw materials needed to ensure the product’s success.
Outputs and Customer Service Structure
When the production unit has completed the transformation of the inputs to beverages and is ready for delivery, Starbucks has well-equipped storage and warehouses that enable the products to be kept to retain their quality and sales level. In addition, the systems implemented in the company ensure that the final outputs reach the market without any distortion. The company has flexible manufacturing systems and a wide range of products it produces for the market. Starbucks has established proper mechanisms within its production units to ensure that high-quality products are manufactured and there is the prevention of product failures in terms of their maturity.
Starbucks also has a developed customer services structure that ensures that the company’s products are sold to the market efficiently. The company has a customer base from all parts of the world who purchase physically and through online sources. The quality products from the company have ensured that there is the retention of customers throughout its years of operations. The product line of Starbucks involves a wide range of commodities and beverages which are branded to ensure that each customer purchases the unique Starbucks commodities.
Inventory Points and Forecasting
The company inventory points are designed to ensure that there are quick and effective responses to their products specification, which enable them to have a competitive edge over other competitors in the market. The company forecasts that its production and sales will increase over the years of its operations due to its marketability and the robust quality of beverages produced in the company. The inventory points in the value chain process are also developed to improve customer satisfaction by lowering the rate of product defects and ensuring product improvement due to the technical advancement in the units of production within the company. There are equipment and a readily available support system at the inventory points that ensure effective handling and provide the shipping of the products from the suppliers to their final consumers.
Sourcing Activities
Starbucks sources its coffee beans from direct coffee farms around the world. In addition, there are other suppliers it has linked with to ensure that the materials are available and consistently supplied to the company. Starbucks company, therefore, uses its bargaining power on the various suppliers to ensure that the products are supplied regularly and there is consistent production of the products. In addition, the vendors are selected purely based on the conformities of the company and the regulatory systems developed in the firm to ensure that they select the best quality coffee for production. The company outsources the materials and other experts to ensure regular production and delivery to the final customers. The sourcing activities enable the company to continue producing the required units of products to satisfy the market and constantly review the various distribution channels.
Risks
The risks involved in the supply chain process include the inbound and outbound logistics, which occur in the proses as materials are moved from suppliers to the final consumers. The risks include; vulnerability to damages as the materials are highly perishable, the risks involving the production process, the delivery risks, and technological changes that contribute to the final process. In addition, the seasonal variations are also a risk to the Starbucks company since its products depend on suitable weather conditions to reduce distortions and frequent damages. There are consistent threats of competition from other companies, which is a risk to producing quality products since Starbucks is exposed to irregular competition to match the consumers’ demand from the market full of various manufacturing companies.
Locations
Starbucks has a well-established distribution channel with various storage facilities across six continents. These storages add value to both the company’s supply chain and value chain, ensuring that the logistics process is effective and efficient. In addition, Starbucks has a central warehouse unit where all the products are stored before they are distributed and transported to warehouses in other parts of the world. The central storage unit streamlines the logistics of commodities in its various stores from various countries (Yoo & Seo, 2017). The packaged beans are moved to the distribution units from the company, which are later moved to the regional and large storage facilities in other parts of the world.
Logistics
The Starbucks company has a large production unit with an average of 70,000 bags of processed coffee daily. To ensure these products access the market effectively and easily, Starbucks has a developed logistic process that involves the movement of the products from the company warehouses to the final consumers. The company deals with physical logistics, which involves using rail, roads, and air to transport its products to customers (Chatterjee, 2017). In addition, there are established online delivery services for customers who may wish to purchase online through smartphones and other digital forms. The processed coffee is packaged and branded using the company name to easily identify and ensure that the customers can easily identify them in the market.
References
Chatterjee, S. (2017). Two efficiency-driven networks on a collision course: ALDI’s innovative grocery business model vs. Walmart. Strategy & Leadership, 45(5), 18-25. Web.
Yoo, S., & Seo, Y. (2017). Effect of supply chain structure and power dynamics on R&D and market performances. Journal of Business Economics and Management, 18(3), 487-504.