Task 2

P4

Introduction:

In any organization the significance of operational management includes all the administrative activities
and exercises managing the change of the assets or the contributions to the yields or the results of the
organization and doing it in such an approach to guarantee the best and proficient usage of the assets in
this way limiting the expenses and amplifying the nature of the yields. (Russell and Taylor, 2011)

Role of Operations Managers and leaders at Starbucks:

Operations manager at Starbucks should know the factors which can accelerate the overall operations
with superior results such as Quality, Speed, Dependability, Flexibility and Cost in order to meet the
growing demand of coffee. In addition to this the operational manager should plan all tasks and explain
them to the staff such as who will be taking orders, cash handling, serving the customers and so on.
(Meredith, 2001) Similarly, the involvement in the designing and innovation process of the different
items at Starbucks is sole responsibility of the operations manager. Continuous improvement in the
operations management is vital for Starbucks in order to increase efficiency. It is the duty of the
operations manager to locate the weak areas of the whole chain which limits the performance of the
whole operations. (Paryani, 2012)

In Starbucks, the efficacy of leadership is essential when it comes to operations management by

identifying the dissatisfaction of employees in top level decisions. The contingency model needs leaders
to vary with the situation so that the company’s performance will not be affected.
Related to this case, Starbucks New Zealand faced decrease in the performance of employees due to
their lack of interest on prevailing situation dealings. In these situations, the leadership should take
immediate decision to strengthen the relationship with their employees, which can be possible to
motivate them and provide a proper task description to them. An immediate meeting withthe union
leaders and addressing the issues would have kept the hopes of the workers intact and they would
perform with goodwill and efficiency. Contingency model of leadership is adopted by my companies as
an organizational behaviour to deal with worst case scenarios (Zaccaro, 2007)

Leadership development is a core element of the operations managers at Starbucks, which ensures that
the organizational culture of the company is maintained with every CEO successor. Starbucks is forward
looking in this respect and strives to attract future business leaders as well as the managers. The idea of
planning for one’s own succession can often make people uneasy, but this idea is openly embraced at
Starbucks. (Greasley,2007) The company plans far in advance to replace its top-level successors. The
importance of leadership is not only ingrained in the upper management team, but Starbucks also
ensures that this is an understood value throughout the organization. In 2004, the Coffee Master
program was introduced to teach employees about regional coffee flavours. Graduates of the Coffee
Master program earn a prestigious black apron and a special insignia on their business cards. In creating
this ethos, Starbucks excels at its ability to attract an educated workforce with a high satisfaction level
where individuals often move up to become effective leaders within the company.

P5 and M3 Importance and value of operational management in Starbucks to achieve its objectives

Quality Management is part of operations management that plays a vital role in Starbucks. In Starbucks
premium character in quality management is used for example the company outsources its sources its
coffee beans from coffee farmers that have to adhere to quality standards of Starbucks. The firm makes
sure that it buys coffee which is certified under the Starbucks Coffee and Farmer Equity (CAFE) program.
The Premium quality service is ensured through leadership and a warm friendly culture. Starbucks also
makes sure that it implements high quality in order to align with the firm’s premium brand image. This
helps the company to fulfil the objective of delivering premium quality to its customers.

Another important operational management tool refers to the processes and capacity designs that are
used by Starbucks. Process and capacity efficiency play a vital role to the success of Starbucks. Processes
that are used by the company are highly efficient and can be seen at its cafés. In addition to this
Starbucks makes use of optimum capacity by designing processes in order to the meet fluctuations in
demand. For instance, processes at the firm’s cafés are quite flexible in order to meet the increasing
demand during peak hours. By utilizing these processes, Starbucks is able to meet the its objectives that
takes into account that aims to maximize cost-effectiveness though efficiency of workflows and
processes. (Russell and Taylor, 2011)

Location Strategy is also one of the decisions that have to be made by the operational management.
Starbucks’ location strategy focuses on urban areas that are densely populated. Starbucks makes use of
strategic clustering of cafés that helps them to achieve the objective of gaining high market share and
driving competitors away. This decision area of operations management depicts that Starbucks focuses
on a target audience that can afford its premium priced products.

M4: Different external factors that would affect Starbucks’s Business and community

Political factors:

The main political factor that can affect Starbucks is about sourcing the raw materials. This has gained a
lot of importance from politicians and from where the raw materials are sourced. Starbucks can to
comply with the sourcing strategies as well as importance to fair trade practices. In addition to this
company also has to follow the laws and regulations in the countries from where Starbucks buys the raw
materials.
Economic factors
Because of global economic recession, it could greatly affect the sales of Starbucks. Customers will shift
to cheaper alternatives. The company has to deal with rising labour as well as operational costs. This
inflationary environment will affect the company’s sales drastically and will give other companies an
opportunity to capture the market.
Social factors
Starbucks can offer cheaper products but then they would have to sacrifice the quality of their product.
It has been able to expand its consumer base because of the premium quality products to its customers.
In addition to this the “green” and “ethical ” consumers are also addressed by Starbucks, the company
has established different green programs and adhering to the quality standards that has helped the
company to gain importance.

Technological factors

Starbucks has benefitted greatly because of the emerging mobile wave. Because of  Its partnership with
Apple, there are discount coupons available to customers which has helped the company to establish a
big name in the Barista industry. In addition to this the company has also introduced
Wi-Fi facilities to cater its customers. This way their customers can now surf the web and do work while
sipping Starbucks coffee. This has added value to their brand and has also enhanced the overall
consumer experience. Apart from this with the help of Apple wallet, Starbucks has also enabled mobile
payments, this way the customers don’t have to carry cash or cards with them.

Legal factors

Starbucks must make sure that does not violate any laws and regulations in the home market or any
other countries from where it buys its raw materials. Also it should stay alert about introduction of
caffeine production as well as consumption related policies that are enlisted by by health authorities .
(Paryani, 2012)

Total Quality Management:

TQM basically refers to the organisation’s culture which is defined the constant attainment of customer
satisfaction through an integrated system of tools, techniques, and training. This involves the continuous
improvement of organisational processes, resulting in high quality products and services.

Total Quality Management at Starbucks:

Compared to other coffee shops, Starbucks has always been, and will always be about quality when it
comes to coffee. What makes their coffee outstanding among others is that they choose exceptional
coffee beans for they believe that quality, flavor, and complexity cannot come from simple roasting.
They place coffee beans in high altitude which creates density and in turn would create to flavor. But it is
not just about the altitude. It is on all the things that they do for they have always applied higher
standards to the sorting and grating and not everybody does that. Surely, the company knows that
simply having an Arabica coffee is not enough. They do make exceptional
coffees that outshine others. (Paryani, 2012)

D2:

Evaluation of Operations Management at Starbucks:

Starbucks coffee passes through varies activities from farm to retail shop as shown in figure
below.

In first stage, the green coffee beans comes from the coffee growers situated in various places of the
world, and then mediator, and then corporative societies deal with them to distribute further. After
that, the exporters acquire the coffee beans and export them to particular location. After the import of
coffee beans, it is now store in temporary storage area then move to the roaster mills owned by
Starbucks (Hohpe & Wood, 2004). Then the coffee beans are roasted and distributed to different retail
shops which end in the hand of millions of consumers Among these major processes, there are other
various processes which guarantee the superior quality of coffee for consumers. Some of the processes
are given below:

1. It is necessary for Starbucks to have the submitted material tested for infectivity before it is
dispatched.
2. GPS tracking systems are installed in some coffee shipments for Starbucks to monitor the movement
of raw material from farm to ports. It is because it gives the surety that the coffee beans are not being
tempered or stolen within the route.

3. Starbucks employs thorough quality control measures, the coffee is examined at numerous points,
tested at many spots, and sampled several times to make sure that what arrives in retail shops is the
exact coffee that purchaser observed at the beginning.

.4. Starbucks coffee purchasers have to trek the globe in the hunt for the best coffees available, even in
areas where political or economic shakiness result hazards for trekkers.

1. After the coffee is roasted, it will be stored in the warehouse until needed by the production
schedule. The coffee is tested, roasted and cupped to make sure it is the same coffee that was
purchased. 10% of the bags will be sampled and compared to the flavour report that was made from
the point of origin. Once it has passed the taste test, the coffee will be laden into roasting chamber
(Schultz & Yang, 2007)

Factors within business environment which impact operational management.

Open communication:
At Starbucks managers and leaders play a vital role in building lines of correspondence between staff
and their associates which is a basic part of boosting workforce efficiency. Building a culture of open
correspondence guarantees that pioneers are continually sharing and accepting input in Starbucks while
additionally welcoming representatives to give significant helpful criticism about the execution of their
pioneers also. Despite the fact that it is unimaginable for administration staff to be specifically required
at each and every dimension of a business, customary correspondence with workers enables leaders to
increase essential understanding into the tasks of every division. The data can be utilized to expand
operational efficiency, more compelling works on, helping representatives comprehend that their voices
are being heard and that their thoughts are imperative to the achievement of the objectives of
Starbucks. (Ionescu and Dragomiroiu, 2014)

Organize Team Activities and Outings:

Leaders and managers at Starbucks arrange various kinds of group building activities that can be used
to enhance profitability, picking a viable action ought to be finished with the aim to enhance a particular
zone in which some colleagues might need. Aggressive amusements or athletic occasions may induce an
amicable soul among staff members urging them to do their best to acquire accomplishments in the
work environment. Festivities within the coffee shop for occasions such as Christmas or New year’s eve
may permit staff to encounter the more social parts of their associates' identities, enabling them to
interact with each other. A definitive objective of leaders would be to foster communication
allowing greater open door for higher workforce efficiency. (Hersey and Blanchard, 2019)
How Improvement in Operational Efficiencies can be achieved in Starbucks:

Although Starbucks has a propel of metrics for assessing supply chain heath and performance, it
concentrates on four advance-level classes to make steadiness and equilibrium in all over the global
supply chain team: safety in operations, service computed by on-time delivery and order fill rates, total
end-to-end supply chain expenditures, and company savings. The last one means to cost savings that
come from areas outside logistics, such as research and development, marketing, or procurement
(James, 2010). But every organization has some slackness over improving the efficiencies of the
operations. There are nine attributes of the Leadership and Management which are required to improve
company’s operational efficiency. (Panmore Institute, 2020 )

Navigation
Proper navigation of the complexities of issues, opportunities and problems which can affect
the Starbuck’s profile of distribution

Strategy Making
Setting up goals and designing a long-term course of action synchronized with Starbuck’s
objectives

Mobilization
Proactively sticks the stakeholders with common agenda and creates capabilities and resources to get
things done quickly with the achievement of objectives