Comments on: Starbucks Sign Displays Their Supply Chain http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/ Mark Graban's leanblog.org - Lean Healthcare, Lean Thinking, Lean Manufacturing, Toyota Production System Thu, 09 Feb 2012 22:59:58 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Sign supplies http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-19773 Sign supplies Thu, 24 Mar 2011 06:04:25 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-19773 I think Scooping isn’t exactly the “value added” step in that value stream. I think Scooping isn’t exactly the “value added” step in that value stream.

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]]> By: Bettieclaire http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-9956 Bettieclaire Tue, 18 May 2010 07:06:08 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-9956 I wonder if the shipping economics would allow for them to ship beans daily? You could have a pull system from the stores back to the roasting plant. Good point. <a href="http://www.procurementservices.com" rel="nofollow">Procurement Staffing</a> I wonder if the shipping economics would allow for them to ship beans daily? You could have a pull system from the stores back to the roasting plant. Good point.

Procurement Staffing

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]]> By: Anonymous http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3575 Anonymous Tue, 20 May 2008 05:02:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3575 And this morning, the Starbucks I frequent from time to time was completely out of their "fresh" roast coffee. (I'm also in the Phoenix metro area.) <br/><br/>Fresh roasting as a business concept is fairly simple - as a home roaster I've put more than a normal amount of thought into the business end of this. <br/><br/>Different coffees do better with different rest periods after their roast, but 3 to 10 days is the max for truly fresh roast, while 2 weeks is still tolerable. <br/><br/>As for discarding old beans, that shouldn't be a problem. They have a pretty firm grasp on what their main coffees are, but for the sake of example let's say that they have 5 main coffees. Those should be the fresh roast, and the 5 or more secondary coffees should be sold as before. <br/><br/>Concentrating on the 5 or so main coffees, they could reduce their overhead of green beans since at least half or more of their blends are going to share some of the same kinds of beans. <br/><br/>Point being is that it is a fairly simple process, especially for a huge company that really does know their coffee so I'm assuming that we're seeing some major growing pains here as they try to implement some new ideas. <br/>Particularly since they're not attempting to fresh roast all of their core coffees, but only one specific blend. And this morning, the Starbucks I frequent from time to time was completely out of their “fresh” roast coffee. (I’m also in the Phoenix metro area.)

Fresh roasting as a business concept is fairly simple – as a home roaster I’ve put more than a normal amount of thought into the business end of this.

Different coffees do better with different rest periods after their roast, but 3 to 10 days is the max for truly fresh roast, while 2 weeks is still tolerable.

As for discarding old beans, that shouldn’t be a problem. They have a pretty firm grasp on what their main coffees are, but for the sake of example let’s say that they have 5 main coffees. Those should be the fresh roast, and the 5 or more secondary coffees should be sold as before.

Concentrating on the 5 or so main coffees, they could reduce their overhead of green beans since at least half or more of their blends are going to share some of the same kinds of beans.

Point being is that it is a fairly simple process, especially for a huge company that really does know their coffee so I’m assuming that we’re seeing some major growing pains here as they try to implement some new ideas.
Particularly since they’re not attempting to fresh roast all of their core coffees, but only one specific blend.

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]]> By: Mark Graban http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3567 Mark Graban Thu, 15 May 2008 14:30:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3567 There's a <a HREF="http://starbucksgossip.typepad.com/_/2008/05/who-cares-when.html" REL="nofollow">dedicated post on this topic</a> at the Starbucks Gossip blog including this comment:<br/><br/>"starbucks is the only coffee manufacturer in the world who thinks when beans are "scooped" matters, and hopes that because they're such marketing geniuses they can convince the world to pay attention to what they can control (when it's scooped) and ignore what they cant control (how stale their coffee actually is)." There’s a dedicated post on this topic at the Starbucks Gossip blog including this comment:

“starbucks is the only coffee manufacturer in the world who thinks when beans are “scooped” matters, and hopes that because they’re such marketing geniuses they can convince the world to pay attention to what they can control (when it’s scooped) and ignore what they cant control (how stale their coffee actually is).”

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]]> By: Mark Graban http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3566 Mark Graban Thu, 15 May 2008 03:54:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3566 J Thatcher -- yes, unroasted coffee beans have quite a shelf life (up to a year I believe).<br/><br/>I own a small electric coffee roaster for home use. Problem is that it only roasts enough for a few pots of coffee in each batch. I buy "green" beans once in a while and the value added roasting step takes about 10 minutes.<br/><br/>But, you have to let the beans sit and "degass" for 1 or two days or the coffee is bitter otherwise. Perfect for the shipping time, eh?<br/><br/>To Mike, I'll dig up some of my old research (I had briefly flirted with the idea of a custom coffee roasting business). They DO make small roasters for coffee shops (bigger than my home roaster), that would be appropriate for that use. I'd be curious to look at the cost tradeoffs in cost of machine vs. batch size. J Thatcher — yes, unroasted coffee beans have quite a shelf life (up to a year I believe).

I own a small electric coffee roaster for home use. Problem is that it only roasts enough for a few pots of coffee in each batch. I buy “green” beans once in a while and the value added roasting step takes about 10 minutes.

But, you have to let the beans sit and “degass” for 1 or two days or the coffee is bitter otherwise. Perfect for the shipping time, eh?

To Mike, I’ll dig up some of my old research (I had briefly flirted with the idea of a custom coffee roasting business). They DO make small roasters for coffee shops (bigger than my home roaster), that would be appropriate for that use. I’d be curious to look at the cost tradeoffs in cost of machine vs. batch size.

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]]> By: Mike Lopez http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3563 Mike Lopez Wed, 14 May 2008 20:40:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3563 I don't understand why Starbucks can't put small ovens in the stores to roast an hour, shift, or day's worth of beans? I don’t understand why Starbucks can’t put small ovens in the stores to roast an hour, shift, or day’s worth of beans?

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]]> By: J Thatcher http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3561 J Thatcher Wed, 14 May 2008 14:30:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3561 Although I'd personally welcome a sliding scale (while I depend on coffee, I'm in it for the caffeine more than the taste), I don't think it's a viable option.<br/>If we take Mark's second quote as truth, that means that individual franchises are receiving beans past their 14 day mark - a sliding scale then would fundamentally alter the profit margins of a local franchise due to inefficiencies of corporate culture. Not something that goes over well, usually.<br/><br/>I'm curious as to where the hold up in this occurs, and <i>have</i> to believe it's in shipping.<br/>If the value adding, if I have this correct, occurs principally at the time of roasting, then a delay in actually roasting the beans doesn't matter. They can sit for an indefinite (although I'm sure not infinite) amount of time before they are roasted, so long as they are then sold within 14 days after the roasting.<br/>The issue then, seems to lie in getting the beans from roast to franchise.<br/><br/>One possible cause: Working on economies of scale, the regional roasting facilities may roast more beans than are actually needed. This might be especially true given varying consumption rates across the region served by a roasting plant (people drink more coffee in Seattle than Boise). Although I’d personally welcome a sliding scale (while I depend on coffee, I’m in it for the caffeine more than the taste), I don’t think it’s a viable option.
If we take Mark’s second quote as truth, that means that individual franchises are receiving beans past their 14 day mark – a sliding scale then would fundamentally alter the profit margins of a local franchise due to inefficiencies of corporate culture. Not something that goes over well, usually.

I’m curious as to where the hold up in this occurs, and have to believe it’s in shipping.
If the value adding, if I have this correct, occurs principally at the time of roasting, then a delay in actually roasting the beans doesn’t matter. They can sit for an indefinite (although I’m sure not infinite) amount of time before they are roasted, so long as they are then sold within 14 days after the roasting.
The issue then, seems to lie in getting the beans from roast to franchise.

One possible cause: Working on economies of scale, the regional roasting facilities may roast more beans than are actually needed. This might be especially true given varying consumption rates across the region served by a roasting plant (people drink more coffee in Seattle than Boise).

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]]> By: DTLay http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3560 DTLay Tue, 13 May 2008 14:48:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3560 I doubt that the value of daily shipments would outweigh the cost of 15 day old beans on the shelf. <br/><br/>Maybe one way to start finding the value of the aging beans (and to really hammer home the value of "fresh" beans) is to price the packages on a sliding scale based on age. For instance, up to 14 days old is 100% of price, 15-20 days is 90%, 20-30 is 75%, over 30 is 50%. Not only does that reinforce the idea that fresh beans are more valuable for your high-end buyers, it opens up the market for those that don't want to spend quite as much and are hoping for a bargain. At the very least, it would get those people in the door on occasion, even just to look for the older packages. <br/><br/>Also, that would let you quatify the cost of the slow shipping out of the central hubs, as the days of waiting could be translated into lower revenue on the aging packages. <br/><br/>All this, of course, assumes that aging packages of beans are really an issue for them. I doubt that the value of daily shipments would outweigh the cost of 15 day old beans on the shelf.

Maybe one way to start finding the value of the aging beans (and to really hammer home the value of “fresh” beans) is to price the packages on a sliding scale based on age. For instance, up to 14 days old is 100% of price, 15-20 days is 90%, 20-30 is 75%, over 30 is 50%. Not only does that reinforce the idea that fresh beans are more valuable for your high-end buyers, it opens up the market for those that don’t want to spend quite as much and are hoping for a bargain. At the very least, it would get those people in the door on occasion, even just to look for the older packages.

Also, that would let you quatify the cost of the slow shipping out of the central hubs, as the days of waiting could be translated into lower revenue on the aging packages.

All this, of course, assumes that aging packages of beans are really an issue for them.

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]]> By: Mark Graban http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3559 Mark Graban Tue, 13 May 2008 13:56:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3559 True - it begs the question of whether Starbucks is roasting to forecasts and "pushing" beans to stores, or are the stores pulling?<br/><br/>I wonder if the shipping economics would allow for them to ship beans daily? You could have a pull system from the stores back to the roasting plant. Good point. True – it begs the question of whether Starbucks is roasting to forecasts and “pushing” beans to stores, or are the stores pulling?

I wonder if the shipping economics would allow for them to ship beans daily? You could have a pull system from the stores back to the roasting plant. Good point.

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]]> By: Anonymous http://www.leanblog.org/2008/05/starbucks-sign-displays-their-supply/#comment-3558 Anonymous Tue, 13 May 2008 13:26:00 +0000 http://leanblog.bigbigdesign.net/2008/05/starbucks-sign-displays-their-supply-chain/#comment-3558 <i>"If it takes a week between roasting and shipping, that means the store needs to use a certain supply of beans within 7 days."</i><br/>Shouldn't this be something more like... If the stores use a certain amount each day then that is how much the roasting plant should roast and ship - i.e. pull from the customer through the value stream? “If it takes a week between roasting and shipping, that means the store needs to use a certain supply of beans within 7 days.”
Shouldn’t this be something more like… If the stores use a certain amount each day then that is how much the roasting plant should roast and ship – i.e. pull from the customer through the value stream?

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