Executive Briefings

Supply Chain Innovation at Starbucks

A rapid growth rate and a difficult economy posed twin challenges for the company's supply chain. Peter Gibbons, executive vice president of global supply chain operations, talks about the steps he took to improve performance and overturn traditional practices.

Gibbons assumed his current role at Starbucks in mid-2008 - "a difficult time," as he recalls it. Store managers were complaining that the company's delivery service was inadequate. Improving that link of the supply chain became his top priority.

Starbucks took a new approach to collaborating with outside partners. The company had a reputation for "creating contracts and almost leaving them in the hands of third-party logistics providers," Gibbons says. Now, it sought a closer relationship with key suppliers. It began positioning its own people inside of distribution centers, to keep watch over operations and forge stronger relationships with service providers. "We made sure they got to know our leadership team," he says.

The Starbucks supply chain had been built just to keep pace with rapid growth in the number of stores and other outlets. Such a dizzying rate of expansion "can cover up a lot of mistakes," says Gibbons. "You eventually have to come back and fix things."

At the same time, Starbucks is striving to create a greener supply chain, through selection of the best modes, service partners and equipment. It has been looking to extend its historical involvement in sustainable product to the way in which it gets goods to market. As a result, the company "has become a lot better at collaborating with people on green and sustainability," Gibbons says.

These days, Gibbons spends most of his time on talent development. At the outset of Starbucks' supply-chain transformation, the company was short of key skills in engineering and transportation management. Bringing in the right level of talent "is very important in the short term," Gibbons says, adding that he has an eye on the more distant future as well. "Now that we have gotten through the initial drama of turning the business around, my job is to make sure we have the right talent and the right skill base."

"I've been given a blank sheet of paper to help build a truly global, excellent supply chain," he says.

To view video in its entirety, Click here

A rapid growth rate and a difficult economy posed twin challenges for the company's supply chain. Peter Gibbons, executive vice president of global supply chain operations, talks about the steps he took to improve performance and overturn traditional practices.

Gibbons assumed his current role at Starbucks in mid-2008 - "a difficult time," as he recalls it. Store managers were complaining that the company's delivery service was inadequate. Improving that link of the supply chain became his top priority.

Starbucks took a new approach to collaborating with outside partners. The company had a reputation for "creating contracts and almost leaving them in the hands of third-party logistics providers," Gibbons says. Now, it sought a closer relationship with key suppliers. It began positioning its own people inside of distribution centers, to keep watch over operations and forge stronger relationships with service providers. "We made sure they got to know our leadership team," he says.

The Starbucks supply chain had been built just to keep pace with rapid growth in the number of stores and other outlets. Such a dizzying rate of expansion "can cover up a lot of mistakes," says Gibbons. "You eventually have to come back and fix things."

At the same time, Starbucks is striving to create a greener supply chain, through selection of the best modes, service partners and equipment. It has been looking to extend its historical involvement in sustainable product to the way in which it gets goods to market. As a result, the company "has become a lot better at collaborating with people on green and sustainability," Gibbons says.

These days, Gibbons spends most of his time on talent development. At the outset of Starbucks' supply-chain transformation, the company was short of key skills in engineering and transportation management. Bringing in the right level of talent "is very important in the short term," Gibbons says, adding that he has an eye on the more distant future as well. "Now that we have gotten through the initial drama of turning the business around, my job is to make sure we have the right talent and the right skill base."

"I've been given a blank sheet of paper to help build a truly global, excellent supply chain," he says.

To view video in its entirety, Click here