• Identify one example of an organization that created value for
itself through outsourcing part of its supply chain. Provide a link
to one resource.
https://www.dynamicinventory.net/starbucks-supply-chain-
management/
Starbucks is an example of an organization that created value for
itself by actually reinventing and reorganizing its fragmented supply
chain. As a result of a huge increase in revenue between 2003 and
2008, the company’s suppliers were having trouble keeping up with
the increase for demand. a “Starbucks supply chain system could not
keep up with the global growth of the company and this resulted in
huge transportation expenses” (dynamicinventory.net, 2018). a This
inevitably began to increase costs as well as cause late store
deliveries nationwide.
o Identify the benefit that occurred.
Starbucks decided to reorganize and simplify its supply chain by
identifying and eliminate non-value added activities. “The company
simplified its supply chain by leaving only the necessary roles divided
into four functional groups: plan, source, make, and deliver”
(dynamicinventory.net, 2018). The groups focused on identifying
factors that were causing price increases and by analyzing data, they
gained better insight into product costs and were able to negotiate
better contracts with vendors as a result. They also determined they
could reduce costs and delivery time by opening a fifth U.S. roasting
plant. They also committed to sustainable business practices all along
its supply chain.
o How did this benefit help the organization create value?
Who was the value created for—the organization, or the
customer?
These actions have benefited the organization by reducing their
supply chain costs and the company remains consistent in reaching
their sustainability goals. Starbucks improved processes and supplier
relationship management, bringing value to the company. As a result,
Starbucks continues to also improve their customer experience.
A look inside Starbucks' Coffee Supply Chain. Dynamic Inventory.
(2018, July 10). Retrieved February 8, 2022, from
https://www.dynamicinventory.net/starbucks-supply-chain-
management/
