Starbucks Logistics sample essay
To help Starbucks on its way to successfully reach the supply chain goals they redefined and changed their distribution and warehousing strategy too.
In March 2011 Starbucks signed the agreement with Green Mountain Coffee Roasters to distribute Starbucks coffee and teas for Keurig single-serving systems (2) Green Mountain Coffee Roasters owns the biggest distribution network for the single-serving systems in North America and Starbucks was able to increase their stock prices significantly after singing this deal. Also, leaving out the old partner Kraft Foods out of the distribution of its coffee in supermarkets and grocery shops Starbucks can generate some surplus income and invest it into business (3). Another example of changes in distribution is the intention of Starbucks to capitalize the distribution channels of Tevanna and continue to open more stores in malls tweaking the model (4).
The relationship with their long-standing 3 PL partner company OHL has been redefined after Mr.Schultz returned as chief executive and have been improved enormously implementing day-today and peer-to-peer relationship instead of having a relationship ‘within arm reach’ as per Greg Javor, Vce President of Global Logistics for Starbucks Coffee Company (1). The relationships were leveraged to the key levels between the partners and allowed OHL to react quickly and in a more effective way to a changing and Starbucks strategy. Also, the improved communication helped to introduce more innovation into the business and now Starbucks and OHL use voice picking technologies, finger scanning technology and introduced the EDI labeling in their warehousing system.
All this definitely allow Starbuck to secure a reliable supply of high-quality products and reduce the cost using all the opportunities, technologies and re-defining their distribution and warehousing objectives. Doing it in a smart way and using effectively integration of various activities for reaching the goals the company not only solves the current problems while recovering after the recession hit but builds a new capabilities and opportunities for expanding business for the future.
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