Starbucks Supply Chain

Topics: Coffee, Supply chain management, Starbucks Pages: 2 (280 words) Published: May 1, 2011
Starbucks Supply chain; Challenges & opportunities


Starbuck is the largest coffeehouse company in the world, with over 1600 stores in 50 countries.

The efficiency of the supply chain management is one of the keys of the success of this company, yet some issues has been emerging due essentially to a rapid growth during the last years.

So what are those issues, and what are the alternatives solution and opportunities.


The supply process is a complicated one. Coffee and other merchandise must be sourced from around the globe and then successfully delivered to the Starbucks Corporation's 16,700 retail stores, which serve some 50 million customers in 51 countries each week.

The company's operational costs were rising even though sales were cooling. Starbucks had been growing so fast that we had not done a good enough job of getting the [supply chain] fundamentals in place. the costs of running the supply chain—the operating expenses—were rising very steeply.

Transportation and deliveries problems: less than half of store deliveries were arriving on time.

Excessive outlays for outsourcing; 65 to 70 percent of Starbucks' supply chain operating expenses were tied to outsourcing agreements for transportation, third-party logistics, and contract manufacturing

Alternatives Solutions:

Reorganizing Starbucks' supply chain organization, that involved taking a complex structure and simplifying it so that every job fell into one of the four basic supply chain functions: plan, source, make, and deliver.

Reduce its cost to serve stores and improve execution

Lay the foundation for future supply chain capability

developing more efficient model for delivering coffee beans to its processing plants, with the goal of manufacturing in the region where the product is sold.
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