Executive Briefings

How Starbucks Meets the Challenges of a 'Same Day' World

Steve Lovejoy, senior vice president for the Starbucks global supply chain, discusses initiatives that the company has under way to meet the "whenever, wherever" demands of today's consumers as well as projects aimed at understanding the consumer of tomorrow.

How Starbucks Meets the Challenges of a 'Same Day' World

Along with other consumer-based businesses, Starbucks Coffee is feeling the shift in buying habits and expectations. "What we are seeing is more instantaneous, on-the-go demand, and Starbucks is working to meet consumers where and when they want our products," says Lovejoy.

One initiative Starbucks recently rolled out in the Northwest is mobile order and pay. Consumers on the go can use a smartphone app to find a nearby store, order products, and have the order acknowledged with the number of minutes until it will be ready for pickup. "Customers can walk into store and go straight to the pickup counter," says Lovejoy. This grab-and-go service will be rolled out to the remainder of the U.S. later this year, he says.

“Another thing we have done is focus much more heavily outside our own team,” says Lovejoy. “Even though we are growing and innovating as a company, we need to be smart about managing resources and costs, so we are focusing more on connecting in three areas: with universities, strategic suppliers, and other companies.”

With universities, Starbucks already is one of five global strategic partners with MIT’s Center for Transportation and Logistics. “As the global lead point person on this partnership, I am able to work with some of the most incredible researchers and innovators in the world to help solve problems,” he says.

One research area of particular interest involves improving efficiency at the back door. “In any big city around the world, we can’t just send in truckloads of stuff multiple times a day,” he says. “That is not only very expensive, but with traffic and congestion in urban areas it is just not feasible. So we are working on those next generation research opportunities, such as smaller, autonomous vehicles that can go without a driver through and around traffic. We need to move goods into our stores in a more efficient manner, and we see some real opportunities in these solutions for tomorrow.”

To more closely connect with its strategic suppliers, Starbucks is working to supply the web infrastructure to enable closer cooperation. And finally, the company is looking to connect with other companies. “Right now we are doing some business with a company that not only is a customer and a supplier of ours, but in a couple of categories is a direct competitor,” says Lovejoy. “These are things that weren’t heard of in the past, but we believe we need to benefit more from all resources, not only from our internal world.”

To view the video in its entirety, click here

Along with other consumer-based businesses, Starbucks Coffee is feeling the shift in buying habits and expectations. "What we are seeing is more instantaneous, on-the-go demand, and Starbucks is working to meet consumers where and when they want our products," says Lovejoy.

One initiative Starbucks recently rolled out in the Northwest is mobile order and pay. Consumers on the go can use a smartphone app to find a nearby store, order products, and have the order acknowledged with the number of minutes until it will be ready for pickup. "Customers can walk into store and go straight to the pickup counter," says Lovejoy. This grab-and-go service will be rolled out to the remainder of the U.S. later this year, he says.

“Another thing we have done is focus much more heavily outside our own team,” says Lovejoy. “Even though we are growing and innovating as a company, we need to be smart about managing resources and costs, so we are focusing more on connecting in three areas: with universities, strategic suppliers, and other companies.”

With universities, Starbucks already is one of five global strategic partners with MIT’s Center for Transportation and Logistics. “As the global lead point person on this partnership, I am able to work with some of the most incredible researchers and innovators in the world to help solve problems,” he says.

One research area of particular interest involves improving efficiency at the back door. “In any big city around the world, we can’t just send in truckloads of stuff multiple times a day,” he says. “That is not only very expensive, but with traffic and congestion in urban areas it is just not feasible. So we are working on those next generation research opportunities, such as smaller, autonomous vehicles that can go without a driver through and around traffic. We need to move goods into our stores in a more efficient manner, and we see some real opportunities in these solutions for tomorrow.”

To more closely connect with its strategic suppliers, Starbucks is working to supply the web infrastructure to enable closer cooperation. And finally, the company is looking to connect with other companies. “Right now we are doing some business with a company that not only is a customer and a supplier of ours, but in a couple of categories is a direct competitor,” says Lovejoy. “These are things that weren’t heard of in the past, but we believe we need to benefit more from all resources, not only from our internal world.”

To view the video in its entirety, click here

How Starbucks Meets the Challenges of a 'Same Day' World