Operations and Service Management

Assignment Brief

BM563 Operations and Service Management

Task requirements

Select an organisation and apply all four of the questions below. Ensure work is supported with evidence from research (academic theory and company research) A brief introduction and conclusion is also required which is included in the word count. Word count is 2,500 (+/- 10%) Identify one operation management practice within a chosen organisation Critically analyse how this operation management practice impacts the organisation in regards to efficiency Evaluate how technology could be embedded in this process or evaluate how this has already been achieved What supporting functions are linked to this operation management practice and evaluate how can they assist with ensuring organisational success?

Sample Answer

Operations and Service Management

Introduction

Operations management lies at the heart of organisational success, shaping how efficiently goods and services are produced, delivered, and improved. Starbucks Corporation, founded in 1971 in Seattle, is a global leader in the coffeehouse sector, known for its commitment to quality, customer experience, and operational innovation. The company’s core operations revolve around the consistent production and service of coffee-based products across thousands of international outlets.

This essay identifies and analyses Starbucks’ lean supply chain management as a key operations management practice. It evaluates how this practice contributes to efficiency, explores the role of technology in enhancing it, and examines the supporting functions that ensure operational success. By applying key operations management theories and industry insights, this report highlights how Starbucks’ operational excellence has been central to maintaining its competitive advantage in the global coffee industry.

Starbucks’ Lean Supply Chain Management Practice

A defining operational practice at Starbucks is its lean supply chain management system, which integrates procurement, production, distribution, and service delivery into a streamlined, cost-effective process. Lean management, derived from the Toyota Production System, focuses on minimising waste while maximising value for the customer (Womack and Jones, 2003). Starbucks applies this philosophy to achieve consistency, quality, and sustainability across its international operations.

Starbucks’ supply chain is vertically integrated, controlling coffee sourcing, roasting, distribution, and retailing. The company sources high-quality Arabica beans through its Coffee and Farmer Equity (C.A.F.E.) Practices, ensuring ethical and sustainable procurement. The beans are roasted in strategically located facilities before being distributed to regional centres and stores worldwide. This approach not only reduces dependency on external suppliers but also ensures control over quality and cost.

Lean principles are visible in Starbucks’ use of Just-In-Time (JIT) inventory systems, which reduce storage costs and prevent waste from overproduction. Stores receive regular deliveries based on real-time demand data, ensuring fresh inventory without surplus. Moreover, Starbucks implements Kaizen, or continuous improvement, encouraging staff feedback and process adjustments to maintain high performance standards.

Through this lean approach, Starbucks has achieved a reputation for operational excellence, balancing efficiency with customer satisfaction across a diverse global network of stores.

Impact of Lean Supply Chain Management on Organisational Efficiency

Starbucks’ lean supply chain practice directly enhances organisational efficiency by reducing operational waste, improving quality, and increasing responsiveness. Efficiency in operations management is typically defined by the optimal use of resources to produce desired outcomes (Slack, Brandon-Jones and Burgess, 2019). Starbucks achieves this by aligning supply chain operations with demand forecasts and sustainability targets.

Firstly, Starbucks benefits from process standardisation, a key lean principle. Every Starbucks store follows uniform operational guidelines for product preparation and service, ensuring predictable quality and faster service times. This reduces variation, a major form of waste in operations, while enabling new employees to integrate quickly into existing systems.

Secondly, the company’s supplier integration strategy enhances logistical efficiency. By maintaining long-term relationships with certified coffee growers and suppliers, Starbucks secures stable input quality and price predictability. These partnerships reduce transaction costs and supply volatility. According to Chopra and Meindl (2021), integrated supply chains promote efficiency through better coordination and communication across stakeholders, an approach Starbucks exemplifies through its global sourcing network.

Thirdly, lean management supports cost efficiency and resource optimisation. By employing demand-driven production and JIT delivery, Starbucks minimises storage and obsolescence costs. This is especially important in perishable goods like coffee and milk. The reduction in waste contributes directly to profit margins and sustainability objectives, both central to Starbucks’ brand image.

Lastly, Starbucks’ lean operations enhance service efficiency and customer satisfaction. Employees, referred to as “partners”, are trained to execute tasks with precision and empathy, combining standardised processes with personal service. High service efficiency leads to faster turnaround times, reduced queues, and increased customer loyalty. In a competitive market, these operational advantages translate into higher profitability and market share.

However, while lean operations deliver significant benefits, they also carry risks. JIT systems can make the organisation vulnerable to supply chain disruptions, as seen during the COVID-19 pandemic. Nonetheless, Starbucks’ strategic flexibility and diversified supplier base have helped it recover quickly, demonstrating the resilience of its operational model.

Continued...