|Type of paper:||Essay|
|Categories:||Sales Starbucks Supply chain management|
The main transportation objective developed by Starbucks is to develop an efficient model for delivering non-coffee products and coffee beans to its potential processing plants (Kordestani & Khalilzadeh, 2007). The delivery of the goods to the predetermined destination is to promote efficient manufacturing processes in the marketplaces. The established transportation objective would enable Starbucks Company to determine and the cost drivers, ensure timely delivery to all its stores, and increase the profits from the sales.
Modes of Transportation Used by Starbucks
Starbuck Company has been using different modes of transportation to deliver its raw materials and processed products to various stores. The type of transport applied by Starbucks depends on the geographical distance and the market forces because an increase in demand for the products in the marketplaces makes the company use a faster delivery model. First, Starbucks use ocean shipping to transport coffee beans from different parts of the world. For example, the company imports coffee beans from Latin America, Asia, and Africa in ocean containers. The raw materials are taken to United States of America and Europe for processing (Tuzkaya & Onut, 2009). The other type of transport is trucking through roads. After roasting and packaging of the coffee beans, the finished products are trucked to the distributions stores/centers located in the United States of America or other Europe countries. Air transport is an appropriate model to be recommended for Starbucks. The use of airplanes provide the fastest means of transport; therefore, enabling Starbucks to increase its performances when the market demands for the finished products is high.
Locations of Factories and Warehouses
Distribution Centers (DCs) are located in different parts of the world. Five regional centers are located in the United States of America, two in Asia, and two factories in Europe. The warehouses include the central distribution centers whereby thirty-three are located in United States, seven in Asia, five in Canada, and three in Europe. The warehouses located in various parts of the world form the central distribution centers that carry baked goods, dairy products, and paper items like napkins and cups (Tuzkaya & Onut, 2009). Also, the warehouses combine the coffee with the identified products to make regular transportation through the fleet of trucks to retail stores owned by Starbucks Company.
Advantages and Disadvantages of the Location of the Factories and Warehouses
The factories and warehouses of Starbucks are located in strategic positions that enable the company to improve its performance in the marketplaces. For example, the factories and warehouses located in Asia reduce transportation costs because some of the coffee beans are obtained from the same region. The second advantage of the strategic locations in the provision of the value chain, especially in primary activities like inbound logistics and business operations. The main disadvantage that arises from areas of the factories and warehouses is increasing the production and transportation costs incurred by Starbucks Company. Transporting coffee beans from Africa and Asia to factories and warehouses located in Europe increases production costs; therefore, affecting its performance. Improving communication through the use of modern technology is one of the effective strategies used in mitigating the disadvantages caused by the inappropriate locations of factories and distribution stores (Lattila, 2012). Modernized technology system leads to effective communication between factories and retailers; therefore, reducing the cost of production.
Economic and Political Factors that Affect Transportation and Warehousing in Starbucks
To start with the economic factors, differences in currency rates affects the profits obtained by Starbucks Company from its operations. For example, the price of selling finished products in United Kingdom and America vary due to differences in the value of the currencies used in transactions. Another economic factor results from the lack of rains in the coffee plantations. The quantity of and quality of coffee harvested from the farms vary depending on seasons. Higher costs incurred while shipping the coffee beans from Asia and Africa also affects the operations and the number of profits gained by Starbucks Company (Lattila, 2012). The political factors include civil wars in countries that produce coffee beans. Conflicts and wars in the African and Asian countries discourage Starbucks Company from importing their coffee beans. Government policies and regulations also affect the transportation and warehousing operations of Starbucks Company because different nations impose high taxation on all business activities undertaken in their territories.
How Technology is Used to Manage Operations at Starbucks
Technology has been used for managing the transportation and warehousing activities of Starbucks Company. For instance, databases are used to contact all cardholders through email. Also, databases help in keeping track of all transportation activities in the between factories and warehouses of Starbucks. Technology has been used to maintain a log of the company's progress within the distribution centers and stores (Kordestani & Khalilzadeh, 2007). The application for tablets and phones have been created to contact and convince cardholders in Starbucks. Lastly, technology has provided internet services that are utilized by Starbucks to identify new customers and establish an appropriate market segmentation.
Recommendations for Improving Transportation and Warehousing in Starbucks
To improve its profits and attain business success, Starbucks Company should incorporate various supply chains. For example, Company-oriented channels include licensed and franchised stores that contribute to rapid growth in Starbucks. Another example of a supply chain to be applied by Starbucks is non-company-based channels that improve cooperation between the company and other enterprises like Pepsi, Hyatt Hotel, and Albertson Supermarket (Lattila, 2012). Joint ventures with other companies increase the sales made by Starbucks and reduce unfavorable competition.
Kordestani, A., & Khalilzadeh, N. (2007). Managing and Integrating Supply Chain: Case of Starbucks. In International Conference on Supply Chain Management and Information Systems: 20/10/2007-21/10/2007. Retrieved from: http://www.diva-portal.org/smash/record.jsf?pid=diva2%3A1001676&dswid=-4824
Lattila, L. (2012). Improving Transportation and Warehousing Efficiency with Simulation-based Decision Support Systems. Acta Universitatis Lappeenrantaensis. Retrieved from: https://core.ac.uk/download/pdf/39947064.pdf
Tuzkaya, U. R., & Onut, S. (2009). A Holonic Approach based Integration Methodology for Transportation and Warehousing Functions of the Supply Network. Computers & Industrial Engineering, 56(2), 708-723. Retrieved from: https://www.sciencedirect.com/science/article/abs/pii/S0360835207002069
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