From the course: Understanding Business

Efficient operations

From the course: Understanding Business

Efficient operations

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- Supply chains buy things, make things and move things, but buying coffee beans, delivering those coffee beans to stores, and then turning those coffee beans into a cup of coffee, this isn't enough. Things must be done well and they must be done using minimal resources every single day. These are the requirements for long-term success. Thus, strong day-to-day operations are vital to Starbucks and any other company seeking long-term success. So what are the hallmarks of strong daily operations? First, supply chain teams must work to be efficient and minimize waste. This helps us keep costs low. If we need 100 bags of coffee, a supply chain team that only purchased 95 bags would create a shortage, but we don't want them to waste money and storage space by purchasing 110 bags. Trucks should be full, fuel should be conserved, damage and theft should be kept to a minimum. Second, supply chains must constantly manage and improve quality. This will keep customers happy and hopefully those customers and their friends will come back and spend more money. This requires that every cup of coffee tastes good and be consistent. Customers in both New York and Los Angeles should get a similar tasting cup of coffee. This also means that coffee beans need to be tested and then inventoried in nurturing environments. And those beans must be processed consistently at every Starbucks location. Access to good equipment that is well-maintained by a competent workforce will also help to ensure quality. And of course, when new Starbucks drinks are introduced or improvements are made to any existing menu item, the supply chain team will be tasked with making sure everyone across the organization is knowledgeable about how to make any new or improved menu items. To do this, supply chain professionals have a third task, developing business processes. A business process is sort of like a business recipe. It is the documented procedure used to accomplish a task, whether it's a new coffee drink or food item, Starbucks must develop, document, and then communicate an easy to understand business process for every menu item. Business processes are the key to consistency across all of Starbucks locations. So having good ingredients in their proper amounts that are properly stored and delivered to stores with working equipment that are operated by well-trained people. These are the essential components of managing a supply chain that is capable of delivering products to make customers happy while minimizing the costs to the company. Look around your company and think about how developing excellent business processes can improve quality and minimize waste.

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