Starbucks Coffee Company’s business success is linked to the proper application of the 3 decisions of operations management (OM). These 3 decisions refer to the different areas of operations where the firm’s management must address specific business objectives. As a global business, Starbucks addresses these 3 decisions of operations management through different approaches and policies. For instance, the company applies its Coffee and Farmer Equity program in supply chain management. Starbucks cafés also exhibit the firm’s organizational culture as a way of optimizing quality of service. Thus, Starbucks has integrated strategies for streamlining the 3 decisions of operations management.
1.Supply Chain Management. Starbucks Coffee’s supply chain is global, although majority of the company’s coffee beans come from farmers in developing countries. The company’s strategy for its supply chain involves diversification of suppliers to ensure stability of supply. Starbucks also uses its Coffee and Farmer Equity (CAFE) program to select and prioritize suppliers. This program uses criteria for ethical practices, including emphasis on sustainability. Thus, in this decision area of operations management, Starbucks integrates ethics and corporate social responsibility with supply chain efficiency.
2. Inventory Management. Inventory management at Starbucks is linked with the firm’s supply chain and various facilities. At the cafés, inventory management involves office automation and manual monitoring. In Starbucks’ supply hubs, automation is more comprehensively used. The company aims to minimize stockout and ensure continuous supply of coffee beans to its cafés. Starbucks addresses this decision area of operations management by focusing on supply adequacy and automation.
3.Quality Management. Starbucks also uses the premium character in quality management. For instance, the company carefully sources its coffee beans from coffee farmers who comply with Starbucks quality standards. The firm also prefers to buy coffee from farmers certified under the Starbucks Coffee and Farmer Equity (CAFE) program. Premium quality service is ensured through servant leadership and a warm friendly culture. In this decision area of operations management, Starbucks implements high quality to align with the firm’s premium brand image.