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Published by:
IBS Center for Management Research (2019)
Length:
7 pages
Data source:
Published sources

Abstract

This is part of a case series. US-based coffee company and coffeehouse chain Starbucks Corporation (Starbucks) was popular for giving its customers a highly enjoyable experience through its hand crafted cold and hot beverages. The coffee company, spread out globally, sourced its supplies from different corners of the world and offered customers what was known as the unique 'Starbucks Experience'. Every customer who visited Starbucks in any of its stores in 76 countries enjoyed a similar experience of great coffee and service, thanks to its highly agile supply chain. In 2008, after a wave of rapid expansion, Starbucks witnessed a downturn in its fortunes. On examining the reasons, Starbucks found out that its existing supply chain was unable to cope with the massive development and needed an overhaul. Starbucks then went about eliminating the complex procurement, transportation, warehousing, and distribution systems and substituting it with highly responsive systems, which made Starbucks a company with the most admired and efficient supply chain in the world. Case (B) deals with the supply chain transformation initiated in the company by Schultz with Peter D Gibbons, Vice President of global supply chain operations. Gibbons started the process by studying the existing supply chains, and its ability to serve the stores. He also found that the supply chain was inadequate, poorly manned, expensive to run, and most of all, unable to provide customers what they wanted on time. The huge system that was spread across continents, included coffee, milk, other items like cups, furniture, machines, distribution centers, and warehouses. He planned to integrate all these into a global logistics system. The case then describes the steps initiated to bring about changes in the system, the results, and the impact these changes had on Starbucks.

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Topics

Starbucks; Supply chain; Procurement; Warehousing; Distribution; Process innovation; Leadership; Ethical sourcing; Logistics; Store management

Setting

The events covered by this item took place in 2000-2017.

Geographical setting

Region:
World/global
Country:
United States

Featured company

Company name:
Starbucks Corporation
Employees:
10000+
Turnover:
USD 24.71 billion (2018)
Type:
Public company
Industry:
Food & beverage

Featured protagonists

  • Howard Schultz (male), CEO and Chairman
  • Peter D. Gibbons (male), Vice President of global supply chain operations

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