The Coffee And Farmer Equity Practices Of Starbucks

3.0 Elements of Supply Chain Management

A simple supply chain is the integration of business process from the end customers through original suppliers that provide products, services and information, and the function of supply chain management is to plan, guide and coordinate all the supply chain’s activities. it includes several elements such as purchasing, production planning, logistics, inventory control and distribution.

3.1 Purchase

1. The C.A.F.E Practices (Coffee and Farmer Equity Practices) of Starbuck has a set of industry-leading, comprehensive coffee buying guidelines.it address the quality of coffee, financial transparency, and social and environmental responsibility. The C.A.F.E Practices Program helped Starbucks to maintain

Each products and service of Starbucks has their own characteristics in order to meet customers ‘demand. Other factors that determinant demand include the prices of related goods, consumer income, consumer preferences, the quality of coffee, size, and buyer expectations. finally, there is a really important point is demand curve that shows the relationship between the price and quantity demanded of a good, and then help sellers forecasting the trend and change supply time. “the law of demand holds that, for virtually all goods and services, a higher price leads to a reduction in quantity demanded and a lower price leads to an increase in quantity demanded (Lewin & Varangis

In Starbucks’ supply centers, automation is more comprehensively used. For example, it uses a P-system and a EOQ system for manage inventory on a store level. This order is placed P-system orders every seven days with a three-day lead time. The entire inventory of Starbucks sets 15% on its over stock, to ensure that supply have enough retail for customers. The second order use EOQ which it has a two-day lead time. EOQ is placed for all the materials, including espresso, milk, and so on (Stapp & Dennis 1999). These systems help Starbucks decline unnecessary waste in production process and shrinkage within their inventory. What’s more, Inventory system uses advanced computer technology, set the sale, purchase, storage, multiple links in one information platform. The aim of inventory management is to minimize stock out and ensure continuous supply of coffee products (Stapp & Dennis 1999).

3.7 Customer

Unlike almost other countries, Starbucks customer satisfaction scores began to decline in Australia. The first store opened in 2000 in Sydney. To date, Starbucks Australia has 23 coffee houses in Sydney, Brisbane, the Gold Coast and Melbourne. Customers say Starbucks has become the Third Place in their daily lives (Michelli 2008). The atmosphere of Starbucks stores is designed to be homey and intimate, at the same time providing customers with their own personal space to use as they wish. In there, customers