A REPORT ON 

STARBUCKS BREWING BEVERAGE

OPERATIONS
Prepared by: Nguyễn Ngọc Mai Lan 

    Tô Lan Nhi

   Nguyễn Quỳnh Anh

   Nguyễn Hoàng Dung 

Phạm Yến Ly 

Đinh Thị Hương Giang

Instructors:  PhD. Tran Cong Thanh 

Year 3, Semester 2, 2019-2020

Subject: Operations Managament (INS 2023)

03 OPERATIONS STRUCTURES
Focus on
describing Starbucks
brewing beverage examination operations in
which all the processes are clarified.

04 PERFORMANCE OBJECTIVES
Discuss the key objectives
of the operations in the context of
maket analysis.

06 OPERATIONS MANAGEMENT
ISSUES
Explore some management
issues and approach/methods,
solutions to achieve operational
objectives.

19 RECOMMENDATIONS
Recommend some solution to
improve the operations.
 Examination
Operations
The operations begin with the point when Starbucks partners after take payment, call

customers entering the store and order to Espresso Bar.

Starbucks partners greet them. Baristas at Espresso Bar repeat the order again

Receiving customers order: note down to maximize the guarantee that customers'

which drinks they want, note some requirement are made correctly.

marginal information if the customer Make drinks and serve: Roasting/ Grinding/

want (determine if there are some Brewing/ Espresso Making/ Steaming and

specialty drinks or type of drink in the Foaming Milk/ Presentation.

menu). Make sure that the barista confirm Fail points: If the beverage is not delivered in

the order with customers again to serve accordance with the order and does not meet

the right beverage. the customer's requirements, it will be poured

Barista takes payment. out immediately and the barista will make a

new drink for the customers.

Customers walk away with their drinks.

Objectives

Quality

Starbucks has a promise to customers: “Your drink should be

perfect, every time. If not, let us know and we will make it right.”

The coffee industry is a fairly well-known industry and many

businesses have started to build their own chain of coffee shops. So

the key factor that can sustain the coffee industry is the quality.

Starbucks suppoes that doesn't always give its customers what they

ask for. If the operations gives customers something higher enough

that it takes time for them to develop their taste, it will create a

sense of discovery and excitement and loyalty, pulled them towards

Starbucks. If the production chain makes a great product, it can

educate customers on how to love it instead of trying to invoke the

whole market. Customers can accept an expensive drinks but the

quality of it must be worth the money. A business in the field of

coffee can hold on to customers’ brand royalty when the quality of

coffee they serve must be a top priority. The quality of the

product will determine whether customers return to enjoy its

drinks or not, if the drinks are delicious, to attract customers. This

is the factor that many businesses have competed for many years to

be able to attract the attention of customers.

 Time

While quality is what customers focus on the most, the time it takes to prepare a drink will affect the

customer's mood to enjoy the drink. They do not require a drinks to be served perfunctorily but they

also do not want to wait too long for their beverage. Beverages are required to meeting the expected 5-

minute maximum wait time. When managing such a professional and reputable brewing process, the

manager will have to pay attention to every detail to make a goods beverage but at the same time ensure

that baristas will not spend too much time making drinks and cause trouble to customers. This requires

the operation to know how to train their partners very meticulously, which Starbucks knows how to

train their staffs, then that firm will have an advantage.

Price

Price is also a factor that when competing businesses also need to pay attention. When the price of a

beverage is too high compared to the market price, customers will tend to against the idea of going to that

place. Businesses need to control prices in a way that balances the overall market. The price of a cup of

coffee is now fluctuating in the range of $3 to $5, if any business set a higher price for coffee they will have a

lot of difficulties to continue to survive in the industry. To save money when brewing requires the presence

of the baristas, they are the factors that directly affect this. A drinks must meet the standards of quality but

also have to think about saving costs for businesses that require the accuracy and carefulness of the

baristas. They need to make sure that they will measure the exact porpotion of each ingredients as well as

avoid making mistakes when producing a cup of coffee leading to waste of ingredients and raw materials
 Service Inventory
Management

To Starbucks, there are some type of inventory:

Other service: Before opening hours, the
Product: Stock and display luggage of whole bean coffee to appeal
partners will prepare inventories, ingredients
to espresso enthusiasts who choose to make their very own cup of
and clean up all the seats to start a new day.
coffee from freshly floor beans.
First, partners will set up the ingredient, how
Equipment: Make specialty drinks, espressos, smoothies or
many coffee beans and milk they need for a day.
cappuccinos, upload an espresso device, ice gadget and blenders on
There is a small refrigerator to stock milk and
the list. Starbucks intends to offer bags of coffee beans, snacks or
help barista make the drink faster. Specially
baked goods, they invest in display shelves in addition to
with coffee beans, there are some sacks in front
refrigerated displays for beverages and ready-made sandwiches.
the bar for customers could smell and test the
Other consists of microwaves and toasters for heating up or
taste of the beans directly showing that they are
preparing sandwiches or toasting bagels.
the quality beans
Others: consisting of paper cups and containers for sporting extra

than two drinks. Clear plastic cups to maintain iced drinks, such as

smoothies, are some other requirement. Add in lids, napkins,

straws and stirrers that want to be handed out with the drinks.

·     
One of the issue of Starbucks’ inventory is storage. Normally, coffee beans and milk are stored in a large

warehouse. But with a large number of customers each day, Starbucks' inventory model have to include a

storage room behind the bar. The question is how they can calculate the number of customers each day and

provide enough coffee beans but avoiding bad affect for flavor. However, the storage issue is if the store stocks

too much coffee beans before using, the quality could be effected. In this giant coffee chain, Arabica and

Robusta coffee beans are the main ingredient in most Starbucks beverages. Recently, coffee beans save to store

in requirement temperature to keep the flavor and preventing musty. The standard to keep the best quality of

coffee is avoiding light and high temperature. Partners sometimes, who think that some kind of flavoring gets

roasted with the coffee. This is incorrect. The only thing that goes into a Starbucks coffee roasting for roasting

is high quality, green, unroasted coffee. After roasting coffee beans, the barista should grind immediately for

the best standard flavor. In addition, coffee beans will not grind before requirement that will make beans

oxidized, causing the acrid taste of coffee. In the inventory room, unused coffee beans are packed in silver pack

to avoid light. They taste more than 1000 cups of coffee a day to verify the superior taste that all of us

(including customers) have come to expect. A batch of coffee is tasted at least three times before it’s approved.

If the coffee is not perfect, Starbucks calls it “not in specifications” as known as NIS and rejected it. Other

ingredient like tea and syrup has to preserve in the right way but easier than coffee. Each pack of tea has to be

vacuum to avoid humid, the very first tea’s enemy. Milk has to be stored in refrigerator 24/24.
TOTAL QUALITY
MANAGEMENT Customer Focus

The  first, and  overriding,  feature of  TQM  is the 

company’s  focus on  its  customers. Quality is

defined as meeting or exceeding customer

expectations. The goal is to first identify  and  then

meet  customer  needs. TQM  recognizes  that  a 

perfectly produced  product has little value if it is not

what the customer wants. Therefore, we can say that

quality is customer driven. However, it is not always

easy to determine what the customer wants because

tastes and preferences change.

Voice of customer is defined as the expressed requirement and

expectations of customers relative to products or services, as documented

and disseminated to providing organization’s member. VOC is a process

for capturing customer’s requirements. There are two basic of VOC data,

in this situation is used reactive data which is found in customer

complaints, compliments, and their feedback. In the brewing process

which is mentioned above, there is a “fail point” will lead to some negative

feedbacks. For example, customer order season beverage with special

required no sugar, but the barista does not notice the special tick box on

the cup, then follow the recipe and serve the wrong order. If the customer

is easy to deal with, they will return the product and ask for a new cup,

but if the customer is strict, they will return the product and also give the

barista some negative feedbacks. Another example, Starbucks has a

special workshop each month for customers try and compliment called

Coffee Tasting. In this workshop, customers directly try new ingredient

and observe the brewing process, Coffee Tasting is the way barista tells

the story behind the coffee bean. The goal of this workshop has the same

function as a survey, give the customer the sample of the upcoming

seasonal beans then collect the feedback. Customers are the assessors

who examine the ingredients, were they have the good flavor, suitable for

the seasonal beverage. The brewing process is the most important part for

customer to give the compliments. Customers will taste each kind of

beverage in the workshop, then use descriptive sensory words to express

the dominant characteristics of the aroma, the flavour and the way the

coffee feels in their mouth. The own past experiences provide great

reference points. There are 5 to 6 drink to try, customers can choose the

drink they want to try or taste all. In the process, barista also explain

other details for educating about coffee industry for customers. After

collecting all the results, based on their responses, barista will decide

what to change or improve in the recipe, which drink will be chosen for

the new seasonal beverage. Most of the product is decided based on the

customers’ experience in the workshop.

TQM places a great deal of responsibility on all workers. If employees are to identify and correct quality

problems, they need proper training. They need to understand how to assess

quality by using a variety  of  quality control  tools,  how to  interpret findings, and how to

correct problems.

Cause - and - Effect Diagram:

Cause-and-effect diagrams identify potential causes of particular quality problems. They are often

called fishbone diagrams because they look like the bones of a fish.  The “head” of the fish is the quality

problem, such as damaged zippers on a garment or broken valves on a tire. The diagram is drawn so

that the “spine” of the fish connects the “head” to the possible cause of the problem. These causes could

be related to the machines, workers, measurement, suppliers, materials, and many other aspects of the

production process. Each of these possible causes can then have smaller “bones” addressing specific

issues that relate to each cause.

The previous fishbone diagram show issues that led to customers’ complaints. First of all, Starbucks employee

problems are scarce, the commonly issues are inexperience, bad attitude and untrained partners. To the left is

a measurement problem which is incorrect quality of supply, this will lead to lacking of materials and

equipment then have influence on quality of services and products. Below is material branch, which contain

issues such as not fresh milk, outdated syrup and stale coffee beans. Next, Starbucks has issues with product

design since they still use plastic take away cups and straws for hot drinks.

TQM is a process to ensure that all work aims toward the common goal of improving product quality of service

(Sander, 2012: 298). TQM also enhances the production process of delivering service. This part will make clearly

about TQM in Starbucks brewing operation with others principles. One of the important factors of TQM is

employee involvement. The brewing process might have many baristas and partners in the bar but making each

cup of drink, only one person will make it from the beginning to the end. That is the reason why they have to be

trained and improved to be more productivity, healthier coworker and be creative in thinking in case there is

some problems in the process. Employee involvement and empowerment translates directly into increased

productivity. It gives to the employees’ representatives the right to criticize, to offer constructive suggestions

and to become aware about the issues involved in decision-making. In short employees’ involvement enhances

employee ability to influence decision making with corresponding assumption of responsibility. When

employees are given independence and expected to be more self-sufficient, they become more efficient, as they

learn to navigate their responsibilities and relying less on managerial staff for direction. As above mentioned,

in brewing process, only one barista makes a cup for each order. With simple drink like espresso or signature

teas, they must be make it right formula and be on time to serve. With the drink needs more creative like

mocha especially cappuccino has a special technique called “latte art” requiring experience barista who has

been trained by Coffee Master. Making a coffee like an art but also has to be punctual is the first challenge

working in Starbucks bar.

JIT Production

In each store of the chain, Starbucks Coffee usually has some

special partner called Coffee Masters setting goals for the work

group, developing organizational capability, and modeling how

partners work together. They have ability to manages smooth

transitions thereafter to keep store operating to standard and to

set a positive example for the store team. Coffee Master who have

been educated about coffee at the higher level that other trainees

could be trained by them. The Masters directly observing and

helping partners make a decision while they are brewing. Start

from receiving customer order, barista notes the name of

beverage, marginal information of customer if they have any

special order. Then barista will repeat the order and confirm

before payment and start to brew. During the brewing process

which has many complicated steps, if that partner is experience,

Coffee Master only supervises the process before serve, but if is

newbie, Master baristas will observe and guide them more

carefully. After the brewing process, beverage will be checked

again by the Master and announce the customer’s name then

served. Sometimes the brewing process has the fail points such as

wrong ingredient, wrong size or anything related to, barista has to

make the drink and serve again. Their responsibility is supervising

the brewing process, evaluate the quality of beverage before serve.

According to a broad view of operation, everyone which are

baristas in the organization should work toward the same goal,

that is serving the customer. To do their workload by themselves is

very easy for barista, they will have a narrow view of the teammate

and all people in the store. In brewing process, individual

completing is important, but the whole process from every

position is teamwork. A broad view of operations involves

understanding that all employees are ultimately responsible for

serving the customers.

 Product
Design
Positioning the product
design in the quality management issue as an innovation process to guarantee
customers' satisfaction everytime Starbucks present their beverages
Starbucks product design is considered as one of the characteristics separating the company from

other coffee brands by the way Starbucks brings unique experience to customers and continually

innovates its product design. The company did not miss any special day or festival of the year to

launch a special colorful beverage line with many new packaged whole coffee beans and

merchandise with eye-catching designs. All these products are available for a limited time only.

Coming with the seasonal beverage menu design, Starbucks doesn't hesitate to launch new

decorations on its plastic and paper cups, especially in the Spring, Mid-Autumn or Christmas. 

The arrival of the Starbucks cups always tell us about the return of the most festive time of the year.

You have probably noticed that the company has a diversity of cherry holiday cup designs. Last year,

they launched four festive designs for the highly anticipated red cups which are called: merry

stripes, merry dance, polka dots and candy cane stripes with a meaning behind them, "every mini

moments of joy for our customers and partners, it's fun, festive and uniquely Starbucks". The

company’s famous red cup designs were first introduced to the customers in 1997 and got lots of love

from customers.
 WORKING WITH SOCIALLY

INFLUENTIAL ARTISTSTHIS TO BUILD THE IMAGE OF

A COMMUNITY-BASED ENTERPRISE
 There is always a meaning behind innovation in Starbucks product design. One of the smartest

moves of Starbucks is always working with socially influential artists to create a limited product line

or launch seasonal beverage at the busiest and most jubilant times of the year to stimulate customer

interest, including for new customers who have never been to Starbucks, and this makes Starbucks

launches a much larger customer than usual in stores. This builds the image of Starbucks as a

community-based enterprise and is very smart in improving product design to satisfy customer

curiosity.

Accompanied with meaning and influence, Starbucks designs are extremely eye-catching, the

company also does not swing to produce too large quantities, the seasonal beverage or seasonal

merchandise are very limited and it motivates customers to go to Starbucks stores to own more. If

looking at every new product launch is a habit of loyal customers, then the classy and thoughtful

designs that make customers who have never been to Starbucks stores pay attention to . This

assures the company that the budget for each new product design launch will not cost too much and

there is a guarantee of customer base and attention to new designs.

They also introduced two new drinks to

Vietnamese customer in the 2019 Christmas:

The first is call "Holiday French Vanilla

Latte, which takes rich, smooth and creamy

steamed milk and French Vanilla flavor and

makes it fun with an exciting blue twist. The

beverage is topped with blue and white

sprinkles for a festive, snow-like finish.

Second is named after a star, which is called

“Wishing Star Dark Mocha”, a dream come

true for chocolate lovers, this rich, dark

chocolate mocha with an added bit of

holiday cheer that ensures every sip is

merry and bright. The Wishing Star Dark

Mocha offers an extraordinarily chocolatey

experience that’s topped with a swirl -of

green tea whipped cream and wishing star-

shaped crisps. Starbucks always encourages

customers to experience the drink becoming

richer and more comprehensive, so the

company pays a lot of attention to the

design of mugs or tumblers, every time

Starbucks launches merchandise is every

occasion the stores receive more customers

than usual because everyone wants to buy

new merchandise designs and request to

serve drinks in that.

Ordering a cup of espresso from the store always

excites Starbucks' customers because they don’t know what decoration the barista will surprise

them with.

Some partners get the idea from sensing people’s moods. If they get the impression someone is

having a bad day, they will try to turn things around with a rose or a heart. “Whenever a customer

gets a ceramic for-here cup, seeing their faces light up with a simple heart design on their latte

definitely makes my day,” A barista from a Starbucks coffee store in Hanoi shared his experience

with excitement. A foaming art, which is considered a pattern as well as a design on the surface of

an espresso drink by pouring the steamed milk in the foam. It is considered an important part in

the process of making a drink because it enhances the flavor of the beverage.
RECOMMENDATIONS

AVOID USING AND EXCRETING TOO

MUCH TOXIC WASTE INTO THE ENVIRONMENT

1. Starbucks has been using the plastic cups for every type of drinks,

except hot drink will be stored in paper cups. Based on the

environmental status in the world, the huge amount of wasted plastic is

being excreted into environment. Each season Starbucks produces

special cups for that season. Based on the data of customers each year,

Starbucks can calculate the average number of customers each season.

From that, Starbucks will be able to produce the right amount of cups to

avoid wasting too much material. However, every season has different

number of customers, so the amount seasonal cups produced each

season should be taken under control.

2.    

To maintain the flavour of freshly roasted coffee beans for as long as

possible, Starbucks should store them in an opaque, air-tight container

at room temperature. In order to have the best flavour, the coffee beans

should only be kept in stock with a right amount of quantity, and that

amount of coffee beans should only be enough for them to sell within

10-14 days, because after half a month, the beans will begin to present

stale flavours. Ground coffee gets old even more quickly because coffee

beans after being ground will more likely to contact with the oxygen

than beans. Therefore, oxidation starts happening within just a few

hours of grinding. So, to keep coffee beans in good conditions, they

could freeze the coffee beans. Though experts don’t recommend this

way of preserving coffee as the coffee beans’ worst enemies are extreme

weathers and temperatures, this option is still acceptable. However, it

can only be done once, because the condensation can form and adversely

affect flavours of the beans, frozen moisture will melt and be reabsorbed

back into the coffee beans, losing all the flavours and essential oils

contained inside them.

3.    

One more recommendation, with the fluctuation number of customer,

Starbucks should calculate by forecasting method base on the factor

such as season will decide which drink customers will choose most, that

the inventory can provide enough ingredients without bad affect.

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