2024 GLOBAL SRM RESEARCH REPORT
INTERVIEW: STARBUCKS - MEASURING OUT VALUE
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Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with nearly 39,000 stores, the company is the premier roaster and retailer of specialty coffee in the world. Through an unwavering commitment to excellence and their guiding principles, the unique Starbucks experience comes to life for every customer through every cup.
teams engaging with the suppliers on a day-to-day basis. At Starbucks, the technology business unit is where supplier relationship management happens to reside. We have a strong partnership with sourcing. It is highly interdependent with orchestrated focus areas throughout the supplier lifecycle.” Another benefit to having supplier management in technology is for the supplier management
supplier management team has been built to support each one of those business verticals, and their risk-based approach to supplier management enables them to prioritise the suppliers for each vertical that are critical to delivering on business objectives. Return on investment is measured in both value terms as well as in risk mitigation. “The rigour in which we are managing these relationships
“Technology is a key enabler to all parts of the business, so it makes sense that we would have a supplier management practice in an area.” Debra Derickson , Director of Technology Supplier Management at Starbucks
Starbucks has an ambitious strategy which aims to elevate the customer and partner experience, drive growth, enhance customer loyalty, and maintain Starbucks position as a leader in the coffee and retail industry. In 2023, CEO Laxman Narasimhan unveiled the ‘Triple Shot Reinvention with Two Pumps’ strategy. The ‘Triple Shot’ is tasked with elevating the brand through purpose-defined stores, an accelerated renovation of its network and further product innovation, strengthening and scaling digital, and becoming truly global. The extra ‘Two Pumps’, which is a take on beverage customisation, is to unlock efficiency and reinvigorate the partner culture. The word ‘partner’ is the nomenclature for Starbucks employees. Debra Derickson, director of Technology Supplier Management, leads a team of supplier relationship professionals who help to strengthen and scale the digital experience at Starbucks. She says: ‘‘Supplier management, as a concept, takes place within procurement and sourcing organisations as well as customer
organisation to be closer to the stakeholder’s business needs and priorities than a sourcing team member is, she adds. The Starbucks leadership team understands the value that technology suppliers can deliver. Derickson says: “If you think about it, technology is a key enabler to all parts of the business, so it makes sense that we would have a supplier management practice in an area that is a hub to the many enterprise-wide spokes.” While Derickson herself has spent her career in sourcing and supplier management, her team comes from diverse backgrounds, including supplier management, risk management, and technical roles. Partners stepping into the team are assigned a portfolio of suppliers, and bring subject matter expertise that is leveraged to mature and scale the supplier management programme such as risk or performance measurement and tracking. Within the technology organisation at large, there are a range of verticals that align to the functional business areas of Starbucks. The
increasingly gets better each year,” says Derickson. “It starts with cross- collaboration by having supplier management team members participate alongside sourcing and technology partners for supplier selection and contracting. Ongoing supplier management is that mechanism for retaining the contracted value.” An example would be a supplier’s obligations around uptime availability and ensuring business continuity. Tracking and holding suppliers accountable is measured through avoidance of revenue loss and negative impact to the brand, both which are impacted when technology is the cause of a retail customer’s experience. Forging stronger connections On an annual basis, Derickson’s team produces the Chief Technology Officer-hosted Supplier Relationship Forum (SuRF), which has become a cornerstone of the supplier management programme. It is the one time each year that messages are curated for the collective, and where suppliers hear the same thing, at the same time, with the same context.
State of Flux COO Patrice Day speaks to Debra Derickson, director of Technology Supplier Management at Starbucks, about its partner culture. Measuring out value
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