Starbuck’s Supply Chain Essay Sample

Starbuck’s Supply Chain
Name
Institutional Affiliation
Starbuck’s Supply Chain
Question 1
Starbucks is the largest coffeehouse chain in the world, which creates some challenges in describing its supply chain. The multinational has numerous stores making it difficult to track down the processes within the chain. This extensive network stretches the limit of its supply chain and it becomes challenging to quantifying specific aspects in the value chain process. Starbuck’s distribution supply chain model means it has many retail locations within its structure to serve its huge customer base. This means many players need to facilitate the efficient supply, delivery, manufacturing, and sale of their products (Garthwaite et al., 2017). This sheer complexity of Starbucks makes it challenging to describe its supply chain.
Another challenge was Starbucks has multiple channels to market its products which means consumers can buy their products from different locations. This means the existing supply chain must adapt to the process variations present in the different stores. A deeper understanding of the manufacturing process is necessary for the company to perform according to its capacity (Starbucks). The manufacturing process has multiple steps which need to be accurately followed for the store to achieve its desired lead time and deliver a high quantity of orders to the consumers every day.
Starbucks ’ supply chain has various key performance metrics which reveal the functioning of the store. These metrics make determining whether the supply is performing according to its optimal capacity a challenging task. In Starbuck’s case, key performance metrics are lead time, unplanned orders, overdue backlog, inventory efficiency, process capacity, and customer interaction time and schedule changes (Starbucks). Keeping track of these parameters within the supply requires a painstaking process that carefully and accurately monitors the processes involved in the production of Starbucks coffee.
It’s challenging to continually assess the performance of every part of the manufacturing process. But this is critical because these performance metrics affect the cash flow within the chain which in turn affects the profitability margins. A continuous improvement approach while assessing Starbucks ’ performance helps maintain the store’s high standards. Analyzing performance also becomes challenging because it is constantly affected by many variables which can comprise the quality and quantity of coffee the company produces and sales to meet its market demand (Starbucks). Otherwise, customers may become dissatisfied with the company’s services in their stores and lose its market share.
Question 2
Starbucks has a distributed supply chain model, where their coffee product is sold across numerous stores in various locations. Their coffee product is functional because it is in high demand by people who may want quality coffee and don’t have the time or equipment to prepare it. The product is also functional because it has a predictable demand as the company has a loyal customer base which maintains their market remains stable. This means with a relatively fixed revenue stream for this functional product, managers focus on reducing physical costs by maximizing production efficiency within the supply chain (Hugos, 2018). However, Starbucks is renowned for maintaining its market position by constantly releasing innovative lines of products in the coffee industry.
A physically efficient process is the best for this type of product because it has a relatively predictable demand. That is why the management is keen on minimizing the costs within the process while increasing the manufacturing rate within the stores to meet the high demand for coffee within the stores. Starbuck can achieve alignment between demand and supply which makes concentrating on the physical costs of the business possible for the company (Gaur,...