Question

Discuss what global factors or conditions might cause difficulties in supply chain management for starbucks coffee manufacturing.

Answer 1

Starbucks has acquired an amazing supply chain that spans across almost nineteen countries.Coco beans can come from one country while milk could come from an entirely different country hundreds of miles away. This global resource span is a great way for Starbucks to expand the company and reach more countries than ever before.

Not only that, but Starbucks Coffee is able to supply the best ingredients to their customers for a lower price. All raw materials are then sent to a roasting, manufacturing, and packaging plant.

It takes a well-run supply chain to ensure that a barista pours a good cup of Starbucks coffee. That's because the journey from bean to cup 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. But in 2008, Starbucks wasn't sure that its supply chain is meeting the goal as the company's operational cost was rising even though sales were cooling.

Starbucks became victiom of its own success as the companies were opening stores around the world at a rapid pace and hence the supply chain organisation had to focus on keeping up with that expansion. The cost of running the supply chain - the operating expenses were running very high. This were the global factors that caused diffuculties in opearting.Even though it spread production across a wide territory, transportation, distribution, and logistics made up the bulk of Starbucks' operating expenses because the company ships so many different products around the world. Getting that under control presented a daunting challenge for the supply chain group.

Although Starbucks has a raft of metrics for evaluating supply chain performance, it focuses on four high-level categories to create consistency and balance across the global supply chain team: safety in operations, service measured by on-time delivery and order fill rates, total end-to-end supply chain costs, and enterprise savings. This last refers to cost savings that come from areas outside logistics, such as procurement, marketing, or research and development.