Case Study 3: Starbucks Corporation: Building A Sustainable Supply Chain

CASE STUDY 3: STARBUCKS CORPORATION:
BUILDING A SUSTAINABLE SUPPLY CHAIN

BY: M NEHA REDDY
MBA 1ST YEAR
SECTION-B
1. What type of information system do you suggest for Starbucks to help

them gain economic transparency?
Ans. The organization's information strategy, or information technology

strategy, establishes its requirements for a variety of information system
applications and the development of the organization's overall systems.
The information technology plan guarantees that the organization's
information system requirements are met.
Starbucks' information strategy is intertwined with the company's overall

success plan. Starbucks understands the importance of information in the
current day for an organization's survival, thus it has built a strong
information system to ensure its competitiveness in a quickly changing
and diversified era.
Information System Used by Starbucks to gain economic

transparency:
Business data is analyzed using a Decision Support System(DSS).
DSS is a semi-structured or unstructured decision-making computer
application system that assists decision makers with data, models, and
knowledge via human-computer interaction.
Starbucks uses Online Analytical Processing (OLAP) to perform large-
scale data analysis and statistical analysis for decision making.
DSS is a computer programme that analyses and shows business data so

that users can make more informed business decisions. Starbucks' parent
firm in the United States employs a single DSS system called "oracle."
Oracle generates monthly reports that are used to make key choices. Only
the parent corporation has the authority to make product decisions.
Challenges:
To drive better informed business choices at the corporate, regional, and
store levels, create a powerful, 24/7-available enterprise data warehouse
comprising sales, marketing, store management, point of sale, customer
loyalty, and supply chain data. To continue to drive innovation, improve
your capacity to assess and act quickly on customer loyalty, coffee sales,
and supply chain data. Ensure scalability to meet rapid data volume
growth.
Functions of management information system:
 Provide Information in various departments:Different forms of

information are required by different departments at Starbucks in
order to make good decisions that will lead to organizational success.
Starbucks has created a corporate web gateway to make information
available to any department or level. There are two ways to get into it.
The first is the Store portal, which employees at retail stores use to
enter and collect information, and the second is the Partner portal,
which employees in fields and corporate sites utilize.
 Facilitate decision making at all levels of organization :Starbucks'

capabilities have been substantially enhanced by Microsoft Office's
SharePoint Server, which ensures the availability of essential
information at all levels of the organization. It offers two types of
interfaces. The first is the partner portal, which is accessible by
management at the top and intermediate levels of the organization. It
gives more general, qualitative data to help strategic planning and
tactical level decisions. It utilizes a decision support system for
middle and upper management, as well as data from the transaction
process system.
 Efficient Mean for managing business processes: Starbucks'
functional capabilities have been enhanced thanks to Microsoft
Office's SharePoint Server. Starbucks was able to deploy the
application of event cycle and request because of the workflow
functionality of business documents. As a result, store personnel now
have centralized access to the company's critical information as well
as web linkages to various vendors. The efficiency of the sales
process and inventory control system is also improved as a result of
this. The system's privacy control is also quite good, since it aids the
organization in properly managing and securing the information
obtained from employees and consumers.
2. How can Starbucks effectively communicate the revised requirements

and practices to farmers and suppliers and other members of the industry?
Ans. Starbucks' C.A.F.E. (Coffee and Farmer Equity) Practices

programme verifies the economic, social, and environmental elements of
coffee production against a set of evaluation criteria, ensuring that
sources of coffee are produced in a sustainable manner.
Third-party verification organizations examine the selected producers,

processors, and suppliers that make up the Starbucks coffee supply chain
against the criteria outlined in the "C.A.F.E. Practices Generic Scorecard"
and "C.A.F.E. Practices Smallholder Scorecard." Before applying for
participation in the CAFE Practices Program, producers, processors, and
suppliers representing the supply chain must complete two prerequisite
programme. First and foremost, there are quality criteria. The programme
is only open to vendors who meet Starbucks' coffee quality standards.
Second, participants in the C.A.F.E. Practices Program must demonstrate
economic accountability throughout their supply chain by demonstrating
a recorded payment mechanism and demonstrating that their business
activities are economically viable. 'Applicants' (i.e., potential programme
participants or suppliers) representing the supply chain may participate in
the programme if these prerequisites are met. All entities in the supply
chain (with the use of representative sample-based methodologies for
small and medium farms) must evaluate the economic, social, and
environmental criteria stated in the programme, according to C.A.F.E.
Practice.
C. A.F.E. Practices is just one of the ways in which Starbucks support their
supply chains and farming communities. They have invested more than
$150 million to date to increase the prosperity and resilience of the farmers
and workers who grow coffee around the world by investing in coffee
communities, sharing technical coffee knowledge, and innovating with
new agricultural approaches.
Starbucks can effectively communicate the revised requirements and

practices to farmers and suppliers and other members of the industry by
organizing few programs which talk about the CAFE practices and their
importance.
3. How do you analyze the impact of social responsibility taken by
Starbucks on its business?
Ans. The three pillars of Starbucks' social responsibility strategy are

community, ethical sourcing, and the environment. Here's what the
business does to make a difference in each of those areas:
Starbucks creates community stores in collaboration with local NGOs in

order to make a positive impact on the communities it works with and in.
The NGOs with which these businesses collaborate provide services
tailored to the needs of the communities in which they are located.
Starbucks then gives the charitable partner $0.05 to $0.15 every
transaction. A list of these community stores can be found here.
Starbucks has vowed to hire at least 10,000 veterans and military
personnel by 2018 and places a strong emphasis on workplace diversity
and inclusion. Starbucks also provides training opportunities for local
students and has established the Starbucks Foundation, with the mission
of further strengthening those communities. These are just a few of their
numerous community-focused projects.
Ethical Sourcing, the second pillar, governs how Starbucks sources its
goods. The company is dedicated to ensuring that their coffee, tea, cocoa,
and manufactured items are produced and purchased in a responsible and
ethical manner. They claim that their "success is connected to the success
of the farmers and suppliers who grow and create [their] products," thus
they only buy from farms and manufacturers who follow a set of ethical
guidelines.
Starbucks considers the environment to be their "most important business

partner," and they take a holistic approach to decreasing their
environmental effect. To do this, they construct LEED certified stores,
are committed to recycling and water and energy conservation, and
pursue global climate change solutions. Starbucks, in general, strives to
be as environmentally friendly as possible in all of its activities.
First and foremost, Starbucks made the decision to invest in its

employees as well as the communities in which they work. Consumers
notice when a firm prioritizes people and focuses on making positive
changes in the communities it works with and serves. In fact, studies
show that when businesses promote social or environmental causes, 93
percent of customers think of them favorably. Starbucks' strategy and
subsequent results are proof positive of the study's findings. Furthermore,
when businesses engage in their employees, they see lower turnover and
employees become brand ambassadors.

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CASE STUDY 3: STARBUCKS CORPORATION:

BUILDING A SUSTAINABLE SUPPLY CHAIN

1. What type of information system do you suggest for Starbucks to help

Ans. The organization's information strategy, or information technology

Starbucks' information strategy is intertwined with the company's overall

Information System Used by Starbucks to gain economic

DSS is a computer programme that analyses and shows business data so

Functions of management information system:

 Provide Information in various departments:Different forms of

 Facilitate decision making at all levels of organization :Starbucks'

2. How can Starbucks effectively communicate the revised requirements

Ans. Starbucks' C.A.F.E. (Coffee and Farmer Equity) Practices

Third-party verification organizations examine the selected producers,

Starbucks can effectively communicate the revised requirements and

Ans. The three pillars of Starbucks' social responsibility strategy are

Starbucks creates community stores in collaboration with local NGOs in

Starbucks considers the environment to be their "most important business

First and foremost, Starbucks made the decision to invest in its

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