StarBucks’ Coffee Chain

Your overall objective will be the following:

Read the assigned cases and visit the Green Mountain Coffee website (or another site dealing with free trade coffee). From there you should have a good idea of the issues involved in a coffee company’s supply chain, including the issues around fair trade. You are to select any coffee company and decide on an improvement opportunity within the supply chain of the company. (There are many supply chain improvements you can select and ideas will be provided in the detail assignment). Below is a diagram of a simple coffee supply chain.

MY SELECTION IS (STARBUCKS’ COFFEE COMPANY)

Note: Thoughts To Assist You In Determining Your Initiative:

Starbucks’ goal to supply the majority of its coffee through the CAFÉ program

If Just Us! decides to compete with Kraft, Nestle, and Starbucks should they be more proactive in marketing the brand?

Should Just Us! establish more cafes? (where, how?)

Should Just Us! enter the office coffee market? Is a University market easier to work with?

Is there anything else Just Us! can do to secure supply lines to accommodate a growing demand for product? How do they support the growers so the big brands don’t bully them?

How can you maintain fair trade’s legitimacy – especially in your company?

How does Green Mountain keep the percentage of coffee pounds shipped in the Specialty Coffee Business Unit that are Fair Trade Certified at at least 28%? (Goal from their website)

Create your own improvement initiative:

Sell a different type of coffee or different product

Sell coffee in a different market (different channel)

Obtain a new supplier

Decreasing inventory of raw material held at retail location

Section 1: Gap Analysis

Your gap analysis will consist of three components:

A. Review the Current State: In order to effectively plan the improvement initiative, you will first need to identify the current state of the company and specifically, the supply chain detail in the area your improvement initiative will take place. At this stage, you will address the question, “Where are we now?” You will need to determine what types of information you need to begin your planning. The following is a sample list, which is by no means complete, but should serve to help spark your thinking.

• What is the dominant culture of your company?
• Does the culture support your initiative?
• Who will be the target market?
• What company business functions will likely support you? (finance, marketing, manufacturing, packaging, distribution, purchasing) Are there any that will oppose the initiative?
• What other stakeholder groups’ involvement will be critical for your initiative’s success?
• What similar initiatives have been successfully incorporated into other coffee companies?
• How will you market the initiative?
• Have you clearly identified how your initiative supports your company’s vision/mission statement?

Make sure to use at least 6 outside resources, resources other than those provided to you, for your analysis.

B. Establish a Clear Vision of the Desired State: At this stage you will address the question, “Where do we want to be?” The next important step in the planning process is to collaborate with your team members and establish a clear vision of what a successful initiative would entail. This involves setting specific goals and identifiable outcomes for each aspect of the improvement initiative. These goals might include quantitative measures such as:

• Amount of money saved
• Increase in sales
• Increase in speed of delivery
• Increase in number of products offered
• You will also need to consider intangibles that are still critical to the initiative’s success, such as:
• Positive attitudes towards the improvement
• A greater appreciation and awareness of the challenges and needs surrounding fair trade coffee if you have incorporated that into your initiative
• A greater level of local, national or international brand recognition

C. Perform a Gap Analysis: At this stage you will address the question, “How do we get from where we are to where we want to be?” Your research will start with your reading of the cases. From there, venture out and research other coffee companies, talk to your local barista and determine best practices, available resources, risk assessments, lessons learned, and insights gained by others. You can then use this research in developing a collaborative, systematic plan to move from the current state of the organization to the desired state. Page 19 of the Just Us! case lists additional websites.

Section 2: Identification of Relevant Stakeholders and Feedback Loops

This week, you will determine the different stakeholders and systems that will need to be considered in your planning process. Be as thorough as possible in identifying the primary groups that will have a stake or an input in the process. Identify the different groups (or systems) that would be impacted by the initiative and to what extent. This could include stockholders, customers, suppliers, employees, as well as transportation and warehousing needs, etc. A supply chain example could be that the initiative is to improve the variety of beverages offered at the retail location, so several systems would be involved such as:

• Workers – need to be trained in the creation of the beverages
• Finance – calculate the price of the new beverage and the profit margin
• Buyer – purchase new ingredients for new beverage
• A single feedback loop
• A double feedback loop
• A multiple feedback loop

Provide a graphic representation for one of each type of the following systems that will be a part of your improvement initiative:

Section 3: Multiple-Scenario Analysis

This week you will perform a multiple-scenario analysis. Be sure to address the following in your analysis:

• What are the relationships between the different systems?
• Examine where the different systems connect and describe how the various loops (or systems) work together and reinforce each other.
• Identify systems that complement each other as well as those where there could be conflicts, side effects, or externalities. For example, after calculating the sales price for a new beverage, you find raw material prices have unexpectedly increased due to unforeseen circumstances involving inclement weather affecting the coffee bean harvest.

Include strategies for balancing and reinforcing loops, planning for unintended consequences, differentiating real needs from perceived needs, and shifting of responsibilities and burdens.

Section 4: Identification of Barriers and Opportunities

• What potential archetypes do you need to guard against in planning this improvement initiative?
• Develop a plan to identify and generate commitment from key stakeholders (both inside and outside the company).
• Identify best practices for improvement initiative.
• Identify opportunities to encourage local interest in your improvement initiative (if relevant).
• Identify opportunities to encourage a broader interest in your improvement initiative (if relevant).
• Also, include the following in your analysis:
• How have you identified the key stakeholders?
• How can you assure that a critical group has not been overlooked?
• Identify individual and organizational costs, benefits, opportunities, and risks involved in developing collaborative support for the improvement initiative.
• How you can guard against unforeseen consequences?
• Week 7 – Section 5: Sustainability Measures
• What systems are important to balance and reinforce in order to provide opportunities for continuous improvement in the initiative, stakeholder involvement, insight, and application of systems thinking?
• What are potential leverage points?
• For long-term sustainability, how will you support relationships with applicable stakeholders?
• How will you avoid archetypes?

References:

Meadows, D. (2008). Thinking in systems. White River Junction, VT: Chelsea Green Publishing.

Senge, P. (2006). The fifth discipline: The art & practice of the learning organization. New York: Doubleday.

Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., & et al.(2001). Defining supply chain management. Journal of Business Logistics, 22(2). Retrieved from the Business Source Complete database

Moon, S., & Kim, D. (2005). Systems thinking ability for supply chain management. Supply Chain Management: An International Journal, 10(5), 394–401.
Retrieved from the Emerald Management Journals database

Green Mountain Coffee Roasters, Inc. (2010). Green Mountain Coffee. Retrieved from http://www.greenmountaincoffee.com/