Case Study Adopted from Logistics Bureau
Starbucks is pretty much a household name, but like many of the most successful worldwide brands, the coffee-shop giant has been through periods of supply chain and logistics 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 and logistics costs combined rose by more than $75 million.
When the supply chain and logistics executive team began investigating the rising costs and supply chain and logistics performance issues, they found that service was indeed falling short ofexpectations. The findings included the following problems:
- Fewer than 50% of outlet deliveries were arriving on time.
- Several poor outsourcing decisions had led to excessive 3PL expenses.
- The supply chain and logistics network had, like those of many global organizations, evolved rather than grown by design and had hence become unnecessarily complex.
Starbuck is currently on a path to achieve improved performance and supply chain and logistics cost reduction.
1) Identifies Starbucks and uses the principles of logistics to improve performance and reduce supply chain costs.
2) Identify the importance of implementing a supply chain and also a logistics strategy and how these can impact the operations of the company.