The process of managing how goods and services progress from concept creation and raw materials to a finished consumer product is known as supply chain management, or SCM for short. It include transportation and storing raw materials, storing finished goods till they sell, and tracking where sold goods move so you may utilize that information to boost future sales.
Logistics, purchasing, and information technology are all part of the SCM process. Materials, finances, suppliers, manufacturing facilities, wholesalers, retailers, and customers are all centralized in a single system.
The Rules of the Starbucks has a vertically integrated supply chain, which means it is involved in every step of the process from the coffee bean to the cup of coffee supplied to customers.
Starbucks value chain is service. Starbucks aim is The company’s in-store customer service strives to increase customer loyalty. Starbucks has always aimed to give customers a one-of-a-kind experience. Service training is an important part of the value chain because it helps differentiate the company’s products.
Growing, harvesting, hulling, drying, packing, bulking, mixing, and lastly roasting the beans are all part of the coffee supply chain. In between, the beans are transported internationally, sold to exporters, and sold to merchants such as grocery stores, cafes, and specialty shops.
The source of a company’s competitive advantage is every organization has procedures and activities that are connected and have an impact on the company’s value. The value chain of a business is made up of several operations and procedures.
Purchasing, product manufacture, distribution, and marketing are all common operations, depending on the sort of firm. A useful technique for strategic planning is value chain analysis. Value chain analysis’ ultimate goals are to optimize value production while also monitoring and minimizing costs.
Primary activities
• Inbound logistics
Depending on the business model, procedures can include moving raw materials, finished items, and supplies from a factory or other distribution channel to a fulfilment centre, warehouse, or retail store.
Example – appointed coffee buyers choose the highest quality coffee beans from Latin American, African, and Asian sources. Starbucks purchases green or unroasted beans directly from farms. The beans are then roasted and packed after being delivered to storage sites.
• Operations
The ultimate product is created from raw materials and items. As the product progresses through the production line, it gains value.
Example – Starbucks has locations in over 80 markets, both company-owned and franchised. There are about 32,000 stores in the company’s worldwide network. The company’s many brands include Teavana, Seattle’s Best Coffee, and Evolution Fresh.
• Outbound logistics
After being made, products are ready to be shipped to distribution centers, wholesalers, retailers, or customers. The delivery of finished items is referred to as outbound logistics.
When it comes to selling Starbucks products, there are very few, if any, intermediaries. The large proportion of items can be purchased at stores. Storage and delivery to retail locations, on the other hand, are critical.
• Marketing and sales
Promoting, advertising, selling, and marketing are all terms that are used to describe the activities of promoting, advertising, Any activity that involves increasing product or service awareness and developing valued customer relationships in order to generate trust and close sales.
Rather of focusing on aggressive marketing, Starbucks prioritizes high-quality items and excellent customer service. When launching new items, the corporation does demand-based marketing by sampling in store areas.
• Service
Anything required to sustain the product’s quality and worth during and after a sale, from customer service to your finance team. The goal of Starbucks’ in-store customer service is to boost customer loyalty.. Starbucks has always strived to present its clients with a one-of-a-kind Starbucks experience. Each of these key duties has a set of supporting activities that help them be more effective or efficient and Porter claims that (1985),
Secondary activities
• Research and development/technology development.
Any budget set aside for innovative activities such as developing and improving new and existing products and services is known as research and development/technology development.
Starbucks is well-known for its use of technology, not just in coffee-related procedures (to maintain consistency in taste and quality while saving money), but also in connecting with its customers. Because of the free and limitless Wi-Fi, many customers utilize Starbucks as a makeshift office or meeting space.
• Human resources management
Employee recruiting, hiring, training, development, retention, and remuneration are all activities that fall under this category.
A number of awards and incentives are used to incentivize Starbucks employees. The company’s reputation for caring for its employees is one of the reasons for its low employee turnover and efficient human resource management. It has a number of employee training programs in place, as well as a work culture that stimulates and keeps its employees productive.
• Procurement
Purchasing raw materials, components, equipment, and services are all activities associated to sourcing.
Starbucks manages 100% of its own coffee bean procurement, which it sees as a competitive advantage.
• Infrastructure
Finance and planning are activities related to the company’s overhead and management.
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