Supply Governance Structures For Reverse Logistics Systems Essay


Describe about the Supply Governance Structures for Reverse Logistics Systems?



The chosen company for this assignment is Starbucks and in this report we will be dealing with the outsourcing decision for this company that the product which are being outsourced for this company need to be added with the value added services for their customers or not. Starbucks is one of the leading companies in coffee. They are one of the expertises in beverage sector. In the last 20 years it is found that there are no changes in the company but they have developed themselves be it during the wars or the when economies of the countries were facing any downfall. The staffs of the company are mainly recognized due to their achievements. The work atmosphere of Starbucks is so good that the staffs always get motivation to give their best work. In Starbucks there is no official structure that the organization follows but the decisions which are made by the head authorities of the organization the staffs follow them without any question. The management also asks for feedback from their staffs. The main highlight of Starbucks is their principles and the supply strategy which they have adopted for their organization which will improve the confidence of their workers. Along with all this they have taken the approval of their customers regarding the products which they will be selling in their outlets and the customers will also come there to have the taste of the products sell by them. The strategy followed by Starbucks is a very slow and steady process and the diversity adopted by Starbucks is very pleasant for their customers. All this are adopted by Starbucks because like this they can keep a control in the market (Aitken, and Harrison, 2013).

Decisions made to outsource the Starbucks service and products which will be adding value for their customers:

The Coffee served by Starbucks is very well-known in the international market and also among the top products in the beverages sector. The main aim of Starbucks is to create a competitive and exclusive product for the market (Aitken, and Harrison, 2013).The process through which Starbucks makes their products shows that how they choose the raw materials for their products and along with that they buy the raw materials for their product from different countries like Africa, Asia and Latin America. The unroasted coffee is bought by Starbucks which they collect from a farm house then they refine that unroasted coffee according to their own way. After they refine the coffee accordingly then they pack it and store in the ware house and whenever required they use those for making their coffee or sell the coffee beans in the market for the customers to use it according to their way. The business done by Starbucks is not only done with the help outsourcing whereas they always guarantees that they will serve the best to their customers for that they always collect the best quality coffee beans for their customers (Lee, and Baker, 2011).

The policy adopted by Starbucks is that they will target the place and the customers which will keep their company into existence within the customers and also give Starbucks the confidence so that they can get the number one position which will they will be getting if they implement new things in their outlets which will be attracting the customers towards their outlets (Nadeem, 2015).

In every Starbucks outlet it has been found that to get the feedback from their customers they have adopted the card system where the customers will be writing about the experience which they will get after they will be visiting the outlet (Mishra, and Mahanty, 2015). Along with that the customers can also write there that if they want any changes in the outlet or in the product which they are having in the outlet and also they can mention if they want any changes in the ambience. As Starbucks is one of the well-known companies so they give warranties to their customers that they will try to bring changes or varieties as much they can. Starbucks has also made a rule that the products which they will be serving to the customers if not according to their satisfaction then they will prepare another for them until and unless the customers are satisfied with the products with which they are served.

Figure-1- Satisfaction level of the Customers

The Factors which are influencing the outsourcing decision of Starbucks:

The main factors which are influencing the outsourcing decision of Starbucks is that the help which they are offering to the customers and along with that they will also entertain to their customers so that they can satisfy their customers with the passion which they have towards coffee. To satisfy the passion of the customers towards their coffee, Starbucks have to keep them organized so that they can fulfill the satisfaction level of their customers and for that they need to complete the work with the help of which they will attract their customers towards their outlets and products. The function performed by Starbucks is totally different from the functions which are being performed by other companies which will help them in producing the zeal which will help them to keep the good relationship with their customers (Sanchez?€ђRodrigues, 2010).

The main objective which is performed by Starbucks is their supply chain system which they need to operate in such a way that their products reach to their customers and also to their outlets. Starbucks has the habit of highlighting their promise which they make to the source from where they extract the raw materials and also buy and sell their products which they distribute worldwide (Fleming, and Konstantaras, 2014).

A relation has been created by Starbucks with their distributors and cultivators that they always buy or take products directly from the farmers, which they cultivate in their fields. All this process which is done takes a lot of money but all this covers up with the fund they incur which they collect after selling their finished goods to their customers. A fixed cost has been allocated so that contract price does not fluctuate that much. As if the price fluctuates then it will create a lot of problems for the customers (Fleming, and Konstantaras, 2014). The funds which they have covers up all their family requirements and also the manufacturing requirements. Henceforth, all this also increases the hazards which are connected with the climate of the business as they can be biased and the cost problem can also be solved. The advertising done by the organization plays a very important role as it increases the sales of the goods and also incurs profit for the organization and also implement different types of schemes which will keep the organization rationalize and which will keep the cost of Starbucks in the top position (Fleming, and Konstantaras, 2014).

Along with all this the organizations also have to keep into notice about the objectives that the organization is performing. The five performance objectives are-

Quality-The quality of raw products which Starbucks are importing from international countries need to be of high quality. So, that they can mould the raw materials and deliver the best final product to their customers. The brand and image of the company depends a lot on the quality which the company is trying to maintain.

Speed- The working speed of an organization, need to be very fast so that the purchasing and returning can be in minimal time. Especially, in those organizations when they are interacting with the customers on daily basis. If they work in their full speed then only they will be able to satisfy their customer needs.

Speed internally helps the organization in their operations whereas externally helps in getting the satisfaction from their customers.

Cost- Helps in understanding the market which will help in buying their raw materials from the international market. The technologies which they are using also have certain costs and the staffs who are working for them for them also the company has to bear the costs.

Dependability- The outlet need to e open on correct time o that he customers do not have to wait for the shop to open and there should be minimal number of products that can go for out of stock for that they have to keep a check on regular intervals. There should the availability of parking system for the customer coming in their outlets.

Flexibility- From time to time the company needs to introduce different varieties of product which will attract the customers towards them along with that they should have a wide range of variety of products and if any of the products is out of stock then they can easily get them. Along with all that they should have the ability to adjust large number customers in their area.

The involvement of risks in the decision making process and also recommend the strategies to overcome the risks

Few risks involved in the decision making operation process management are:

When a product is being designed then it influences a lot during the modification and the evaluation policy (Kulkarni, and Gopakumar, 2014). When the final products are made then they can easily recognize the price through which the whole procedure has gone through and also the superiority of the products which are existing into the market and also providing a very good facility so that the organization can have a look into all this products so that the organization do not face any problem and it will also keep the unity among the organization and also in the products which they are modifying and brining into the market after doing a lot of development into the whole process(Research Methods in HRM 2014). All these processes are done because this will maintain all the development process which will help the company to keep their product into the market and also keep their product among the top products in the market in their sector. If the products do well in the market then it will increase the market share of the company which will also give profit to the company and also bring success for the company in the market. Starbucks has involved themselves in the business in such a way that the venture which they have adopted for their business i.e. the buying and cooking the best quality of coffee so that they can share this with their customers and along with that they have to improve themselves in such a way that in their products the customers gets the taste of the Italian espresso in the coffee which they are serving to their customers and also serve their customers all coffee related products which will improve the sale of the company totally in the indirect way which will be beneficial both for the customers and also for the company which they are providing in their branches and outlets (Browne, and Gomez, 2011).

Another risks taken by the organization is of choosing the best place where they will be opening their outlet so that all the customers, who have their passion for coffee can easily reach to their outlets so that they can savor the taste of coffee and for that the company have to select the position of their outlet in the best position so that the customers can easily to those outlets without any difficulties. Along with all these the factories of Starbucks need to be in those places so that when they will be importing the raw materials for their companies from the international market and the raw materials can reach to their organization without any difficulties. If the raw materials do not reach to the organization then they will not be able to deliver their best product to their customers and then they will not be able to fulfill the satisfaction of their customers and this will lead to a negative feedback for the company and they cannot afford to do so (Deadrick, and Stone, 2014).

Another types of risks which they can find is the layout designs which is very mandatory for their organization as on that basis the overall structure of the company will depend (Peng,. and Chen, 2014). The policies and regulations adopted by the organization all need to be followed in the correct procedure so that they do not face any problem. The layout of the technologies also needs to be advanced so that the products which they are serving to their customers also need to be in different types of varieties (Browne, and Gomez, 2011).

As a Coffee company Starbucks has the capability to bring effort and variety in the products which they are bringing in their products and along with that there is no fluctuations in the price of the products which they are producing (Deadrick, and Stone, 2014).


In a nutshell it can be said that Starbucks is one of the companies which is identified as one of the best companies in the beverage sector in the international market. But along with this there is one important question and i.e. how they will follow all the rules and regulations which they need to follow to keep their organization organized and also keep everything in process. It is important for the operation manager of Starbucks to keep everything under control so that everything done by the organization is under control and all the process is covered up in a systematic way so that there is no error in the work process which will take the right decision so that the organization do not have to face any risks but then also if the organization has to face any risks then the company also should have the solutions with them which will help them in overcoming all the risks which is face by the company. It can be said that Starbucks is one of the company who outsource their products but all their products provides a good value to their customers which keep their customers satisfied with their products and all this helps Starbucks in making the right decision for the organization.


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