Starbucks is the world’s number one specialty coffee retailer. Currently, Starbucks has over 21,000 locations in over sixty countries. Starbucks has an incredible manufacturing and distribution process, which Team C has found extremely interesting. Team C will discuss Starbucks’ process design and cover a few interesting points regarding Starbucks’ manufacturing process.
While researching Starbucks’ manufacturing process, Team C learned that Starbucks uses the Make to Stock (MTS) process design. In general, a make-to-stock process ends with finished goods inventory; customer orders are then served from this inventory (Jacobs & Chase, 2011, p. 114). Currently, the manufacturing and distribution process starts with receiving the coffee beans. The next step is storage, then the sifting process followed by assortment and roasting. After that, there is a quality tasting. If the quality tasting is failed, the product is discarded, and the process is started again from the beginning. If the product passes the quality tasting, then it goes on to cooling, blending, and final testing. If the final testing is failed, again the process is started from the beginning. If the final testing is passed, the next steps are packaging, palletizing, and fulfillment of the finished goods to each of the thousands of retailers worldwide (Natasha Barrett, 2014). The MTS production system can meet customer orders fast, but confronts inventory risks associated with short product life cycles and unpredictable demands (Teimoury & Fathi, 2013). Fortunately, Starbucks has found a way to get ahead of this problem for the most part and has set themselves up for success with the MTS process.
There are two points that stand out in the manufacturing and distribution process at Starbucks. The first point is that Starbucks is very serious about the bean selection process and the ultimate quality of the coffee beans. Before the coffee beans are shipped to the distribution centers, they are tested. Of the huge amounts of prospective coffee beans Starbucks screens, only approximately 3% make it through to the distribution centers. Starbucks follows the Coffee and Farmer Equity Practices to evaluate and reward producers of high quality, socially responsible and sustainably grown coffee (Natasha Barrett, 2014). This proves that quality starts at the beginning of the process. In addition, another interesting point that the 3% that does make it to the distribution centers go through a quality tasting and a final testing phase. Starbucks takes no chances when it comes to quality, and it is shown in their processes.
Team C learned a lot about Starbucks this week. The team learned that Starbucks uses the MTS process. Team C also learned how serious Starbucks takes quality during the manufacturing and distribution process. The emphasis on this quality helps Starbucks continue to reach their goal of reducing costs and improving efficiency.
Jacobs, F. R., & Chase, R.B. (2011). Operations and Supply Chain Management (13th ed.). Retrieved from The University of Phoenix eBook Collection database. Natasha Barrett. (2014). Supply Chain Process: Starbucks [PowerPoint slides]. Retrieved from http://www.slideshare.net/NatashaBarrett/starbucks-supply-chain-39449671?next_slideshow=1 Teimoury, E., & Fathi, M. (2013). An integrated operations-marketing perspective for making decisions about order penetration point in multi-product supply chain. International Journal of Production Research, (). Retrieved from http://web.b.ebscohost.com.contentproxy.phoenix.edu/ehost/pdfviewer/pdfviewer?sid=25b120f8-cc67-4033-a179-da927b35940f%40sessionmgr115&vid=8&hid=109