Starbucks Supply Chain Needs: Coffee Vs. Tea Essay

Excerpt from Essay :

Starbucks Supply Chain Needs: Coffee vs. Tea

There is an intrinsic difference in the supply chain needs of Starbucks in regards to its production of coffee (which is largely based on its access to, refinement and transportation of coffee beans) and that of tea (which hinges upon the access to, processing and manufacturing of tea leaves into tea bags). The principle difference in the these needs explicitly related to Starbucks has to do with the quantities involved -- Starbucks is principally a coffee company, and produces considerably more coffee beans than it does tea bags as a result. Therefore, its supply chain needs for tea will always be considerably less so than for coffee, a fact which is most notably underscored by the reality that as of 2010, the organization had five coffee roasting plants owned by the organization in the four corners of the continental U.S. versus a single tea processing plant (Cook, 2010). It is also worth noting that the process for converting coffee beans into a product that can be marketed and shipped throughout the world is less arduous than that for tea, since "Compared to the value chains of other commodities, such as cocoa or coffee, the tea value chain is less fragmented and significantly shorter" (Braga and Strebel, 2011, p. 2).

As previously alluded to, the sheer expense associated with operating facilities pertaining to coffee leaves is much greater than that associated with tea leaves. In addition to the five roasting plants (including one located in Holland) there are also 6 "green coffee" warehouses owned by Starbucks -- the only facility dedicated to just tea is the aforementioned processing plant (Cook, 2010). Additionally, there are also expenses pertaining to the procurement of coffee beans coming from all over the world which require payment to overseas vendors and transportation costs. Once these beans have reached the U.S. (or Holland), they are manufactured at roasting plants and transported to distribution centers. Starbucks has distribution centers all throughout the world and store locations that require their products internationally as well.

The principle difference in the supply chain process between…

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References

Braga, T., Strebel, Heidi. (2011). "Unilever Tea: revitalizing Lipton's supply chain." www.saiplatform.org. Retrieved from http://www.saiplatform.org/uploads/Modules/Library/unilever-tea-a_revitalizing-liptons-supply-chain.pdf

Cooke, J.A. (2010). "From bean to cup: How Starbucks transformed its supply chain." Supply Chain Quarterly. Retrieved from http://www.supplychainquarterly.com/topics/Procurement/scq201004starbucks/

No author. (2007). "Global value chain of the coffee industry." www.web.duke.edu. Retrieved from https://web.duke.edu/soc142/team8/Supplychainoverview.htm

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