GM732 - Supply Chain Management of Starbucks Assignment

Assignment Task

Case Study on Starbucks

Starbucks is pretty much a household name, but like many of the most successful worldwide brands, the coffee shop giant has been through its periods of supply chain pain. In fact, during 2007 and 2008, Starbucks's leadership began to have severe doubts about the company’s ability to supply its 16,700 outlets. As in most commercial sectors at that time, sales were falling. At the same time, though, supply chain costs rose by more than $75 million.

Supply Chain Cost Reduction Challenges: When the supply chain executive team began investigating the rising costs and supply chain performance issues, they found that the service was indeed falling short of expectations. Findings included problems such as fewer than 50% of outlet deliveries were arriving on time, several poor outsourcing decisions had led to excessive 3PL expenses and the supply chain (like those of many global organizations) evolved, rather than grown by design, and had hence become unnecessarily complex.

Based on the given case study of Starbucks and its Supply chain challenges, learners are asked to prepare a report by answering the following questions

1. Provide a brief introduction to the Starbucks Global Supply chain and the role of supply chain function in the context of a Multinational Company such as Starbucks.

2. Develop a 10-point plan that will ensure that the supply chain function and its strategies remain relevant to Starbuck’s organizational objectives in future. 

3. Evaluate the effectiveness of strategies used by Starbucks to maintain supplier relationships and analyze the Information Technology used by Starbucks to create strategies in developing relationships with suppliers.

4. Understand the role of procurement and logistics in Starbucks supply chain management.

5. Conclude your report by providing adequate recommendations as a result of your above analysis done on the Starbucks supply chain.

Background And Objective

Power Plant International is scheduled to import a GT 6 Bladed Rotor. Exported in April 10 ^th 2022, it is now ready for importation and installation at the power plant. Timely arrival is critical since the non-availability of the unit is costing the company 1 million US dollar penalties per day. The unit is scheduled for installation on November 1 ^st 2022.

Potential Logistics Challenges Ahead

• At the Houston port, delays in loading cargo may arise
• The vessel is being shipped in the hurricane season and stormy weather is anticipated on the day of loading
• Offloading from the vessel at Point Lisas port
• Possibility of damage at Houston port
• The agent or supplier not following proper lifting protocol
• Sea blast during inclement weather
• Industrial unrest at the Port of Guaira
• Unsuitable incoterms for the shipment
• Injury of workmen causing delay in loading
• Poor choice of shipper leading to damaged ship and incompetent crew
• Berthing delay due to rough seas

Freight forwarder’s plan:

Collect cargo on the 10 of October.

• Deliver to Houston port on the 14 ^th October
• Load on the ship on the afternoon of the 16th October
• Arrive at the port in Venezuela on the 25 ^th October
• Deliver to the port of Point Lisas on the 28 ^th October

Develop and discuss a risk assessment plan for the foreseeable challenges ahead. Consideration must be given to the choice of incoterms and transport mode applied in your review. Any risk template of the learner's choice can be used for this scenario. 

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