Final Task Performance in Supply Chain

Management

Submitted by:
Norly Jun C.Locsin
BSHM 401

Submitted to:
Daryl Joe C. Mercado
Instructor
 Starbucks Corporation

Starbucks Corporation is an American multinational chain of coffeehouses and

roaster reserves headquartered in Seattle, Washington. As the largest coffeehouse in

the world, Starbucks is seen to be the main representation of the United States' second

wave of coffee culture. Since the 2000s, third wave coffee makers have targeted

quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while

Starbucks nowadays uses automatic espresso machines for efficiency.

Supply Chain Framework of the Establishment

 The Starbucks have Porter’s value chain model type of supply chain framework.

Inbound Logistics

First is the inbound logistics for Starbucks refer to company-appointed coffee

buyers selecting the finest quality coffee beans from producers in Latin America, Africa,

and Asia. In the case of Starbucks, the green or unroasted beans are procured directly

from the farms by the Starbucks buyers. These are transported to storage sites, after

which the beans are roasted and packaged.

Operation

Starbucks operates in more than 80 markets, either in the form of direct

company-owned stores or licensed stores. (Starbucks does not follow the traditional

franchising terms.) The company has more than 32,000 stores globally. It is also the

owner of several brands, including Teavana, Seattle’s Best Coffee, and Evolution Fresh.

Outbound Logistics

There is very little or no presence of intermediaries in product selling for

Starbucks. The majority of the products are sold in stores. However, storage and

distribution to retail locations are important.

Marketing and Sales

Starbucks invests more in superior quality products and a high level of customer

service than in aggressive marketing. However, need-based marketing activities are

carried out by the company during new product launches in the form of sampling in

areas around the stores.

Service

Starbucks aims at building customer loyalty through its in-store customer service.

A signature retail objective of Starbucks has always been to provide customers with a

unique Starbucks Experience.

Infrastructure

This includes departments like management, finance, legal, etc., which are

required to keep the company’s stores operational. Starbucks employs business

managers in its corporate offices. It also has store managers on-site that help to

oversee well-designed and pleasing stores complemented with good customer service

provided by the dedicated team of employees in green aprons.

Human Resource Management

The committed workforce is considered a key attribute in the company’s success

and growth over the years. Starbucks employees are motivated through generous

benefits and incentives. The company is known for taking care of its workforce, a key

reason for a low turnover of employees, which indicates great human resource

management. There are many training programs conducted for employees in a setting

of a work culture, which keeps its staff motivated and efficient.

Technology Development
 Starbucks is very well-known for the use of technology, not only for coffee-related

processes (to ensure consistency in taste and quality along with cost savings) but to

connect to its customers. Many customers use Starbucks stores as a makeshift office or

meeting place because of free and unlimited Wi-Fi.

Procurement

Procurement is integrated across various aspects of the supply chain. Porter

discusses procurement as a support activity. Many companies will establish broad

terms, requirements, and standards for all of their procurement dealings. However,

procurement relationships typically vary widely. Starbucks handles all of the

procurement for its own coffee beans, which it sees as one of its competitive

advantages.

The concept of Porter’s value helps business managers to better identify useful

and wasteful activities. By looking beyond standard means of efficiency analysis while

also seeking to integrate and capture value chain analysis in business metrics,

stakeholders can make important insights related to operational processes.

Advantages of Supply Chain Framework on the Establishment’s Supply Chain

 It provides a generic framework to analyze both the behavior of costs as

well as the existing and potential sources of differentiation.

 Activities that are not adding value can be identified and addressed. For

example, improved so they do add value or outsourced if this is not

possible.
  It emphasizes the importance of regrouping functions into activities to

produce, market, deliver and support products, to think about relationships

between activities and to link the value chain to the understanding of an

organization’s competitive position.

 It makes it clear that an organization is multifaceted and that its underlying

activities need to be analyzed to understand its overall competitive

position.

 The strategic framework can be applied to any type of business regardless

of the industry and the size of the business.

Disadvantages of Supply Chain Framework on the Establishment’s Supply Chain

 By focusing too granularly on micro details, the broader strategic view can get

lost. After all, the main purpose of value chain analysis is to evaluate company

operations, segment by segment, to increase efficiency in each area. But chain

analysis does a poor job of linking each activity in the chain together.

Consequently, it's possible to lose sight of how the activities broadly interrelate.

 It may be difficult to find all the required information in order to conduct value

chain analysis in an appropriate manner.

 Application of the tool in practice can be overly time-consuming process, since it

requires a comprehensive analysis of all business operations.

Recommendation
  Communicate the timeline to stakeholders. I recommend clearly organized Gantt

charts. Communicating these with clients and managers demonstrates

organization and dependability. Update your timeline with the progress you’ve

made as you move forward. This will help you build trust.

 Standardize whenever possible. Is there a repeatable task that your company

duplicates in numerous projects or jobs? If so, find the most optimal approach for

that task and standardize it. This will increase efficiency substantially.

 Build in time that allows to react to uncontrollable interruptions; that is, make a

contingency plan. If you don’t need it, great. If you do, it’s better to have planned

for unforeseen delays.

References:

1. Robert D. (2017, June 12). Comprehensive Guide to Value Chain Analysis with

Examples by Industry. Smart Sheet.

https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting_and

_style_guide/reference_list_electronic_sources.html

2. Bondarenko P. (2020, May 11). Starbucks Corpotarion. ENCYCLOPÆDIA

BRITANNICA. https://www.britannica.com/topic/Starbucks

3. BAJPAI P. (2020, May 6). Analyzing Starbucks’ Value Chain.Investopedia.

https://www.investopedia.com/articles/investing/103114/starbucks-example-

value-chain-model.asp