Logistics and Supply Chain Management at Starbucks

Question: Discuss about theLogistics and Supply Chain Management at Starbucks. Answer: Introduction The report examines the role of a procurement manager at Starbucks and describes his duty while providing supplier selection criteria and issues faced by the organization. It further describes the role of information technology in delivering designated duties. The report provides information related to the purchasing cost analysis in order to manage the flow of goods while dealing with the suppliers. It analyzes the effectiveness of three aspects of the purchasing manager in marinating the cost of the goods. It is evident that every organization needs to keep a check over the supply chain in order to find the relevant solution to the problem. The purchasing manager is responsible to buy best quality goods and products at a competitive price that enables an organization to operate well (Gencer Grpinar, 2007). Their duty involves working with the different organizations to oversee supply chain management and procurement on a wide scale. It is there duty to effectively negotiate with v arious suppliers and buyers. An efficient purchasing manager helps in increasing profit and saves organization from further losses. There duty is to work in a sustainable environment by managing risk and ethical issues (Ho, Xu Dey, 2010). Companys Overview Starbucks Corporation is an American coffee company and a chain of coffee house founded in Seattle, Washington in the year 1971. The company operates more than 23,000 stores across globe. Starbucks is considered to be the representative of second wave coffee marking history by providing same quality coffee at different region (Starbucks Company Profile, 2017). The company is known for procuring efficient quality coffee beans through the suppliers who are consistently supplying coffee beams of best quality. The procurement manager has a role to coordinate the functions by choosing the most efficient supplier and to lead an example for the rest on a long run. The procurement manager has a responsibility to keep a check over the regular supply chain at their stores located at different place. Moreover their duty includes keeping an effective relationship with the suppliers in order to manage future sales (Supplier Diversity Programme, 2017). Supplier Selection Criteria and Issues Supplier Selection Criteria Starbucks has been working for more than 40 years and has dedicated itself in inspiring and nurturing human spirit. They have developed an effective relationship with the suppliers through commitment by enhancing the Starbucks experience. As a purchasing manager it is his duty to manage cost, Quality and Safety, Delivery, Service, Social Responsibility and Risk (Ng, 2008). The process of supplier selection is driven by the cross functional team from a different sector in an organization. The common supplier selection criteria include: The previous experience and the past performance with the supplier and the product and service. It depends upon the level of sophistication of the quality system involved while meeting standards set by the company and the regulatory bodies. Their ability to meet the current and potential capacity required to deliver goods and services. Financial stability is essential for an organization while matching the companys standard. The availability of technical support and willingness to participate as a partner while developing long term relationship with the suppliers. To measure the total cost included while dealing with the suppliers. The supplier track record is kept under consideration in order to improve the business performance. The measure related to total cost assessment involved in it. Methods to evaluate the potential of a supplier criteria: Obtaining information related to the quotes as furnished by the supplier. Requesting formal quotes from the supplier as per the specification and requirements. By conducting visits to the supplier in order to select the quality of goods. Confirming with the quality status in order to retrieve proper information as mentioned by the authority (Huang Keskar, 2007). Through discussion with the customers served by the supplier. The purchase manager can review the performable and database of industry in order to serve the correct product line. Evaluation of the various suppliers and issues related to them while dealing with the individual or a group of people. Issue in Supplier Selection Criteria The major issue faced by the purchase manager is while dealing with the group failure. At certain time the organization faces majority of issues that are caused due to implementation puff decision making. At times there is a problem in implementation of the plan as per the requirements which are causing deviation in results. Secondly the overconfidence in the judgment can cause failure in attaining desired results (Christopher, 2016). The market is dynamic and subject to majority of fluctuations that can affect the overall productivity in an organization. Thirdly, relying inappropriately on the rule of thumb may impose major issues on receiving desired results. Starbucks believe in managing an efficient supplier chain in order to attain sustainable result. The motto of the company is to deliver desired growth by ensuring quality coffee beans. For the purpose company is managing its own farms to keep a check over the quality of coffee beans. Lastly it is necessary to keep a follow up measure in order to attain desired results. Maintaining a regular supply chain is an issue for an organization as it has to oversee each and every task related to the particular procedure. The role of purchase manager includes a regular supply of goods in order to attain sustainability (Amindoust, Ahmed, Saghafinia Bahreininejad, 2012). Hence supplier selection is a major issue that cant be ignored if an organization wants to succeed on a long run. It is hence the necessity to look into the procedure while ensuring desired results (Ballou, 2007). ICT for Purchasing Operations Starbucks has focused on supply chain by taking initiative through performing essential role in managing regular stock. Information and communication form to be an important part while managing the supply chain management.ICT is considered to be one of the important components while managing the supply chain management. ICT is used to exchange information in the supply chain. The operational model set is based on six views of enterprise operations that help in managing the internal and external supply chain management. The ICT system at Starbucks is based on managing the purchasing operation. The database is kept by the manager in an effective manner that help in retrieving maximum benefit out of all the process taking place at Starbucks. Starbucks is efficiently using NCR-POS Hardware and In-Store technology to manage the supply chain. The organization is using intelligent restaurant information system to keep a check over the inventory management, labor management, time attendance and financial reporting. It helps in managing the resources. This is considered to be one of the efficient tool to access effective results within the given time period. Recommendation It is necessary for accompany like Starbucks to develop a strong information and communication system in order to receive effective result. Implementing a synchronized single information system will help in managing suppliers. This will however increase the efficacy of an organization in order to retrieve efficiency in managing the record as per the necessity. The supply chain is necessary to be managed in order to attain effective results. Having a synchronized data across the organization helps in managing resources at Starbucks located at different places. ICT system helps the purchase manager to handle the situation in an effective manner by single handling the overall data. Suppliers information is kept under the single domain that help in effectively ascertaining the information according to the requirement. It is necessary for an organization to keep a proper record of the stock and supplier as per the necessity arising in the organization (Fawcett, Ellram Ogden, 2014). Infor mation and technology helps in handling tee complex data and keeps a check over the role of suppliers in attaining efficacy. Computerized shipping and tracking system help in simplifying the whole process and help in reducing the overall shipping errors. The system like TMS, ERP and CRM helps in enabling business owners to consolidate all the aspects of the supply chain management. This softwares help in keeping a synchronized data which help in attaining desired results within the domain. These technologies reduce the overall time spent on shipping, receiving, tracking and compiling order data. This will save the time and money of both the buyer and the supplier (Monczka, et al, 2015). Purchasing Cost Analysis Purchasing is considered to be one of the most important parts of the business to be undertaken in order to ensure that the business is making the best usage of money earned. Purchase analysis is a process through which the cost related to the purchases is necessary to be decided in advance. The strategy related to purchases and inventory management need to be kept at an optimum level in respect with the suppliers. The analysis is managed by keeping coordination with the size of the company. The bigger organization involves more critical issue as compared with the small organizations (Stadtler, 2015). The cost analysis is the first thing conducted by the supplier that reflects the actual cost to purchase the cost. There are numerous overhead cost involved with the delivery of goods that cause hindrance in attaining required results. A full procurement analysis helps in analyzing the total cost of purchase from a particular supplier (Lambert, 2008). Inventory Analysis The next important part while managing the supplier is related to management of the inventory. The cost of storing and the cost of not having an item need to be kept efficiently. The optimum inventory level is necessary to be kept in the organization in order to avoid negative influence on sales and productivity. At Starbucks it has become evident to manage machines in order to keep a check over it. Cost analysis is necessary for Starbucks to efficiently utilization of the cost efficient tools (Van Weele, 2009). Purchasing cost analysis is a necessary role played by the purchasing manger by considering the most important tools in dealing with the problems occurring at the organization. Firstly it is necessary to focus on the cost charged by the supplier in order to avoid the unexplained cost (Mangan, Lalwani Lalwani, 2016). It is the duty of the purchase manager to keep a check over the price trends in order to attain possible growth. It is mandatory for Starbucks to conduct a specific cost breakdown analysis in order to manage the critical situations. Cost analysis is a complex process and requires breakdown of the product in order to manage the data in an effective manner. Keeping an open line of communication with the supplier will help in evaluating the data in a proper manner which will ensure proper growth. Starbucks is a renowned organization known across the globe for its specialized coffee. They have attained effectiveness by implementing the purchasing cost analytical tools in ord er to generate revenue (Wisner, Tan Leong,2014). Purchasing cost analysis needed to be implemented at each level by focusing on all the cost that s involved while estimating the cost of a product. Starbucks has efficiently achieved desired targets by focusing upon the cost analysis (Chopra Meindl, 2007). Conclusion The report incorporates the role of purchasing manager at Starbucks. It includes all the necessary supplier selection criteria that is necessary for an organization to attain sustainable results. Starbucks is a renowned coffee chain known for its exquisite flavors of coffee. It has become important for the company to choose the suppliers to minimize the cost. This will help in reducing the overall cost charged by the supplier on the company. The role of information and technology is equally important for an organization in order to maintain a regular supply chain. This process is necessary to be incorporated to achieve desired results. The coffee beans at Starbucks are imported from the African countries which are managed on the standard made by Starbucks. The last part of the report describes the purchasing cost analysis which is necessary to keep a check over the cost of a commodity. It is necessary to manage each and every activity at Starbucks in order to attain desired results. References Amindoust, A., Ahmed, S., Saghafinia, A., Bahreininejad, A. (2012). Sustainable supplier selection: A ranking model based on fuzzy inference system.Applied Soft Computing,12(6), 1668-1677. Ballou, R. H. (2007).Business logistics/supply chain management: planning, organizing, and controlling the supply chain. Pearson Education India. Chopra, S., Meindl, P. (2007). Supply chain management. Strategy, planning operation. 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