Supply Chain of Starbucks

BySaphalya Mohanty(138)

Ashish Nirwani(140)Anant Suryawanshi(154)

Introduction & Agenda

• About Starbucks • The Supply Chain• Procurement• Overall Strategy• Assessment• Outlook

Quick Facts

• Number one specialty coffee retailer in the world

• Broad product offering • Astounding world presence • Unique and always changing variety

of coffee blends• Strong procurement and SC

relationship management

Product Offerings

• Product offering: coffee beverages, complementary type breakfast foods, sandwiches, salads, coffee accessories, music and games.

• Alliances: – Dreyer’s Ice Cream – Jim Beam Brands – PepsiCo

Markets

• Strong global presence. • Locations: North America, Latin America,

Europe, the Middle East, India and the Pacific Rim.

Country # StoresUnited States 7,353Japan 572China 209

Number of Stores in Main Regions

Supplier CountriesStorage FacilitiesRoasting Plants(Amsterdam x 1, U.S. x

3)

From Arabica to Latte

From Arabica to LatteRoasting PlantsWashington, Nevada, Pennsylvania

Distribution Centers (DC)

Approx. 9000 storesCompany Owned & licensed

Warehouses are near roasting plants

Everywhere in the US!

Individual Retail Stores

Supply Chain Revisited

Coffee Growers

Roasting PlantsStorage Facilities

Warehouses

Distribution Center

Retailers RetailersRetailers

Coffee Growers

• Operations:– Equatorial Belt– High quality and service– Send dried beans by ship

• Inventory: – Storage facilities

• Information Technology:– GPS tracking devices

Growers

Storage Facilities

Ship

Vendors

• Operations:– 40,000 suppliers– Commodities products

• Inventory:– Sends to Distribution

Center by truck

Vendors

Distribution Center

Truck

Roasting Plants & Warehouses

• Operations– 3 in US, 1 in Amsterdam– Roast, de-stone, taste profile– Packaging:

•Automated boxing•Palletizing systems

• Inventory:– Store palletized café in warehouse

Roasting Plants

Warehouses

Truck

Distribution Centers

• Operations:– Located regionally– 24 hours / 5.5 days a week– Outsources distribution to 3PL

• Inventory:– Push/Pull boundary– Order supplies from vendors– Hold packaged products and merchandise

• Information Technology– HighJump Software's Supply Chain Execution

Solution to • Streamline Product Distribution• Prepare for Future Growth

Distribution Center

Truck

Retailers

Warehouses

Retailers

• Operations– 10,500 Stores located globally– Company owned and licensed– Standardized regulations– Relationship Management

• Inventory– Periodic Review

• Coffee, milk and paper products: Once per week

• Food products: Four times a week• Information Technology

– Computers information systems

Truck

Retailers

Procurement: Quality

• Focus on high quality and service• Pays premium prices• Preferred customer

Procurement: Relationships

• Long-term relationships• Mutually beneficial• Relationship management

“ Losing a vendor is like losing an employee — you lose the money and time you put into training them,” -John Yamin, Starbuck’s Vice President of food.

Corporate Social Responsibility

• Fair Trade Movement– Price setting– Focus on value of entire supply chain

• “Coffee for Conservation” Project– Improves quality while focusing on

environmental sustainability– Current Regions:

• Tanzania• Rwanda• Kenya• Ethiopia

Overall SC Strategy

• Maintains “relational capital”

• Focuses on quality and purity

• Education• Strategic retail

locations

Future Outlook

Starbucks can…• leverage their unique skill set• develop relationships with and procure

from other countries• expand into other markets. • continue assisting African coffee growers • improve demand forecasting at the retail

levels • expand product offerings