Operations and Supply Chain Management

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Ferr05

Business Finance

Description

Describe the challenges faced by the company from a Global Perspective in Distributing its Products or Services. How is the company going to minimize cost and maximize profits through warehousing and transportation cost? What are the options? Which is the best option? Make recommendations to resolve the challenges.

submission should be a minimum of 4 pages and contain enough detail to show that you understand factors about the company that will permit you to specify high-level recommendations to develop and/or improve the company’s operations. Think of yourself as a newly hired employee charged with improving operations, or a consultant being retained to make recommendations to the President and his/her senior level staff. Your recommendations should show a level of professional expertise that will impress the management team.

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Explanation & Answer

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Running Head: CHALLENGES FACING STARBUCKS IN DISTRIBUTING ITS COFFEE

Challenges Facing Starbucks in Distributing Its Coffee Products
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CHALLENGES FACING STARBUCKS IN DISTRIBUTING ITS COFFEE
Starbuck Distribution Network
Starbucks has faced numerous challenges in the distribution of its coffee products to the
final consumer. Among the many challenges, the company face arise from its supply chain
distribution networks that to some extent hinder the smooth operation of the activities of the
company. The company is now focusing on integrating its global distribution network into one
global logistics system that will combine all the physical movement of supplies and distribution.
The company hopes that this will include all the inbound shipments that come all over the world
coffee market. As a result, Starbucks hopes to have one logistic system managing its distribution
network (Starbucks, 2017).
The current distribution network of Starbucks comprises of five regional distribution
centers (DCs) located in the United States. It has leased one of the DC to a third-party logistics
companies (3PLs) in Europe and two in Asia (Starbucks, 2017). Therefore, the stores and shops
that sell Starbucks coffee products are sullied trough theses distribution centers or by central
distribution centers (CDCs) which are mainly smaller warehouses. It is important to note that the
distribution and logistics costs also make up over 76% of the company' operating expenses due
to the multi-channel distribution network adapted by the company. It has faced challenges in
bringing such costs under its control for quite a long time.
The Challenge of Fostering Relationships with Suppliers.
Starbucks has for quite a long time faced the challenge of creating strong and long-lasting
supplier relationships with all its stakeholders in the distribution challenge. There has been a lot
of report of lack of trust and loyalty in the distribution of the company’s coffee products, making
it is difficult to create a conducive environment ...


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