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development). While the ERP is closely linked to the supply chain, having ownership of it has helped the team to provide support to other functions and upgrade their role in the organisation. · Total Quality Assurance: Integral to the role of the supply chain function at Starbucks is the Total Quality Assurance for the Starbucks stores and the procured product and services as well. · Project Co-ordination: The team has been at the heart of projects and co-ordinated cross- functional initiatives that span functional silos, including operations, marketing, finance, and store development. · Supplier Collaboration: The supply chain function has invested in collaborating with suppliers and developing relationships with them where this is needed. It is all about quality “It has always been, and will always be, about quality” according to the first principle of Starbucks’ mission statement. Procurement strategy is based on building partnerships with suppliers that can consistently support or exceed Starbucks’ quality expectations. The Starbucks Quality Assurance Standard and the “Never Compromise Policy” mandates a set of procedures to ensure that quality standards throughout the supply chain are met or exceeded. Cost saving is not about cheaper products or services. It is about a better relationship between price and value and it is directly connected with opportunities, the environment, technology and needs. Compromising quality may deliver savings in the short term but it will definitely be more costly in the long term and may damage the brand. Supply chain is not only a cost-out function but it also contributes to revenue growth. Examples of Starbucks’ philosophy about quality include the decision to offer fresh milk in Starbucks’ stores and the continuous refresh of Starbucks’ product offerings and ingredients. “Solid partnership with our suppliers is the answer to balancing cost savings and quality, which usually comes through innovation,” says Vassilis Evremidis. To support this strategy, the team is proactively undertaking a number of steps to ensure quality. These include: · Checking suppliers’ basic information prior to advanced negotiations. · Monitoring suppliers’ reputation and financial data. · Auditing suppliers’ facilities prior to contract sign- off. · Conducting audits of critical suppliers on, at least, an annual basis.
The first Starbucks store opened in 1971 and embarked on a journey offering the world’s finest quality coffees. Today, with more than 17,000 stores in over 55 countries, Starbucks welcomes millions of customers every day and provides a genuine coffee house experience. Starbucks is not only proud of its coffee quality but also of the social atmosphere of its stores. Supply chain has traditionally been well placed at Starbucks as a value-adding critical function. The company has recognised that shareholder value can be driven by supply chain excellence and that functional and business expertise is required to deliver this. Along with excelling at purchasing, logistics and warehousing, the supply chain function is expected to create economic profit, drive operational excellence and influence most aspects of customer service. The supply chain team in Greece co-ordinates all aspects of procurement and supply chain for Starbucks stores within the country, as well as for stores in Cyprus, Bulgaria and Romania. As Kalliopi Zarotiadou explains, the majority of purchasing is managed centrally by the Starbucks Company; therefore the focus of the team has been on managing local purchasing and management of the supply chain. Additionally, the structure of the company has given the supply chain team the opportunity to exploit supply chain excellence in other areas such as customer services and quality assurance. Starbucks faces the challenges inherent in a volatile environment. These include demand fluctuation, changing customer needs, cost increases, pressure to reduce prices, increasing supplier risks, and changes to the economic and social environment. In this era of tighter credit, a focus on cutting costs, higher demands and expectations, it becomes evident that the opportunity to increase shareholder value and secure profitability levels will come through supply chain practice, as it manifests itself on both the income statement and balance sheet. Address the challenges Driven by the inherent critical role of supply chain within the Starbucks Company and the principle “Love what you do”, Kalliopi Zarotiadou and her team have been leading a number of initiatives to bring results and serve the company’s mission. · Customer Service Excellence: The supply chain function is leading the Customer Service Excellence programme for the Starbucks stores (not the end customers). Everything that is related to Starbucks stores will feed into the supply chain department, which brings the team very close to where the customer experience starts.
· ERP Expertise: The team masters the use of the ERP system which results in better management of information and serves as a connection point with other functions (e.g. store training and
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