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StarbucksGeoffrey HoRujuta NarwekerMamta PatelChristina Ratusznik
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Introduction & AgendaAbout Starbucks The Supply ChainProcurementOverall StrategyAssessmentOutlook
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Quick FactsNumber one specialty coffee retailer in the world Broad product offering Astounding world presence Unique and always changing variety of coffee blendsStrong procurement and SC relationship management
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Product OfferingsProduct offering: coffee beverages, complementary type breakfast foods, sandwiches, salads, coffee accessories, music and games. Alliances: Dreyers Ice Cream Jim Beam Brands PepsiCo
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ConsumersAge range: 18-24 years Higher than average incomes. Highest usage of coffeehouse brands: self-employed or work full-time.
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MarketsStrong global presence. Locations: North America, Latin America, Europe, the Middle East and the Pacific Rim.Prospective expansion into Brazil, India and Russia.
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From Arabica to Latte
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From Arabica to LatteApprox. 9000 storesCompany Owned & licensedWarehouses are near roasting plantsEverywhere in the US!
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Supply Chain RevisitedCoffee GrowersRoasting PlantsStorage FacilitiesWarehousesDistribution CenterRetailersVendorsRetailersRetailers
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Coffee GrowersOperations:Equatorial BeltHigh quality and serviceSend dried beans by shipInventory: Storage facilitiesInformation Technology:GPS tracking devices
GrowersStorage FacilitiesShip
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VendorsOperations:40,000 suppliersCommodities productsInventory:Sends to Distribution Center by truck
VendorsDistribution CenterTruck
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Roasting Plants & WarehousesOperations3 in US, 1 in AmsterdamRoast, de-stone, taste profilePackaging:Automated boxingPalletizing systemsInventory:Store palletized caf in warehouseRoasting PlantsWarehousesTruck
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Distribution CentersOperations:Located regionally24 hours / 5.5 days a weekOutsources distribution to 3PLInventory:Push/Pull boundaryOrder supplies from vendorsHold packaged products and merchandiseInformation TechnologyHighJump Software's Supply Chain Execution Solution to Streamline Product DistributionPrepare for Future Growth
Distribution CenterTruckRetailersWarehouses
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RetailersOperations10,500 Stores located globallyCompany owned and licensedStandardized regulationsRelationship ManagementInventoryPeriodic ReviewCoffee, milk and paper products: Once per weekFood products: Four times a weekInformation TechnologyComputers information systemsTruckRetailers
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Responsive or Efficient?
Predictable demand with seasonalityLong term fixed and future contractsPeriodic review inventory systemHigh inventory levelEfficient Responsive Efficient Efficient Efficient!
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Procurement: QualityFocus on high quality and servicePays premium pricesPreferred customer
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Procurement: RelationshipsLong-term relationshipsMutually beneficialRelationship management
Losing a vendor is like losing an employee you lose the money and time you put into training them, -John Yamin, Starbucks Vice President of food.
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Corporate Social ResponsibilityFair Trade MovementPrice settingFocus on value of entire supply chainCoffee for Conservation ProjectImproves quality while focusing on environmental sustainabilityCurrent Regions:TanzaniaRwandaKenyaEthiopia
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Overall SC StrategyMaintains relational capitalFocuses on quality and purityEducationStrategic retail locations
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Future OutlookStarbucks canleverage their unique skill setdevelop relationships with and procure from other countriesexpand into other markets. continue assisting African coffee growers improve demand forecasting at the retail levels expand product offerings
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Development Opportunities
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Fun Facts (Optional Slide)Starbucks only purchases 2% of the worlds coffeeCoffee beans are originally greenCoffee is the 2nd most valuable commodity after oilCoffee trees can grow up to 30 ~ 40 feet
