Starbucks Supply Chain Balances Efficiency with Sustainability

By University Alliance
Starbucks Supply Chain Sustainability

Coffee colossus Starbucks has developed a supply chain spanning 19 countries that funnel everything from cups to coffee beans into nearly 20,000 retail stores in 60 countries. This is while maintaining the corporate commitment to green and sustainable practices.

Tapping resources from around the globe makes it easier for the company to expand and reach more customers. Yet Starbucks maintains only six roasting centers where beans are roasted and packaged for delivery.

The Starbucks supply chain operates on an integrated make-to-stock supply model, focusing on tracking demand in real time to meet the requirements of several different distribution channels. Starbucks uses Oracle’s automated information system for manufacturing, GEMMS, to monitor real-time demand, allowing production plans and schedules to be developed and modified as needed. To coordinate supply levels with multiple distribution channels, the company must have constantly updated access to information detailing demand, inventory, storage capacity, transportation scheduling and more to keep things running smoothly.

A Green and Sustainable Supply Chain
Starbucks tries to balance its supply chain demands with the company’s green and sustainable corporate practices of maintaining quality while buying coffee grown responsibly and traded in an ethical manner. The company’s efforts include responsible coffee purchasing practices, providing farmer support centers, running farmer loan programs and participating in forest conservation.
The company also sets social responsibility standards for its suppliers and will work with suppliers to improve business practices, though Starbucks will stop doing business with one until problems are resolved.

The company website notes that a 2012 assessment of 128 factories found that 36 failed to meet the standards and stopped doing business with 15 of those that did not implement adequate standards.

Supply Chain Best Practices
Established in 2004, the company’s Coffee and Farmer Equity (C.A.F.E.) Practices program provides social, environmental, economic and quality guidelines for Starbucks farmers to follow. Developing these standards allows the company to ensure its products are sourced according to company guidelines and provides information to improve the supply chain verification program. Many companies develop supplier certification standards but Starbucks has created a method that can determine if the investment in the program yields results. 

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