Starbucks is world’s number one coffee and coffeehouse company; Jerry Baldwin, Zev Siegl, and Gordon Bowker founded it on March 30, 1971. The company’s first branch was at Seattle, Washington; currently it has outlets in more than 55 countries (Starbucks Corporate website). The company has one of the most respected and effective supply chain-management systems. This paper discusses the supply chain network adopted by Starbucks.
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What methods do they use?
The company has an internal robust supply and logistic department that has the role of pioneering all supply demands in the company. In other countries, where it gets it coffee, the company has collection points that it can get coffee beans in raw and roasted form.
The system aims at ensuring the company gets adequate supply of coffee and other material used in production at the right time, at an appropriate cost and quality. The company buys raw materials from the United States where it has its head quarters, but it has diversified its team to coffee producing countries like in the East African countries where quality coffee is grown.
To maintain good relations with suppliers, the company has a favorable buying price and bases the buying on the quality and the production method as adopted by the farmer. In countries like Ethiopia and Kenya, the company has implemented farmer’s education programs with the aim of facilitation the production of environmentally friendly coffees.
Quality and efficiency in delivery of coffee beans and other material in the company has the main concern in the system.
The company supply chain has the following goals:
- Quantity goals: Adequate supply of materials in a company when they are needed
- Supply of quality materials for various purposes in a business at all times (quality objective)
- Supply of materials at a competitive price (price objective) (Simchi-Levi, Kaminsky and Simchi-levi 12-23)
What is their system for evaluating the program in terms of quality, social responsibility, and success factors?
The initial approach that the company has to ensure it gets quality is to procure for the commodity from those countries that are known for their quality coffee, they include countries like Kenya, United States, Brazil and Ethiopia. After having the appropriate channels to get the commodity, they then have to vet for its quality.
When supplies are made, they have to be graded as a measure of determining the quality they have. The higher the grade the higher the cost of the commodity, in large consignments, after every fifty bags, the one must be opened and contents verified.
As a matter of social corporate responsibility, Starbucks operates a fair trade policy in areas that it collects coffee; it is involved in projects like road maintenance and education systems. In the hunger of protecting the environment, the company has started training centers for farmers on how they should farm without polluting the environment, to support environmental conservation further, the company pays a higher premium for coffee produced with minimal use of chemicals.
The following are the critical success factor of the company:
- Offer quality services and products
- Increase the welfare of stakeholders (stakeholders include suppliers)
- Conserve the environment
- Attain and maintain customer loyalty
- Respect for the people and teamwork (Starbucks Corporate website).
Simchi-Levi, David., Kaminsky Phillips, and Simchi-levi, Edith. Designing and Managing the Supply Chain. New York: Mcgraw Hill, 2003. Print
Starbucks Corporate Website. Starbucks, 2011. Web.