Coolcargo Vs. Starbucks Logistics, and Supply Chains

CoolCargo vs. Starbucks

Logistics, and Supply Chains

By: HMY

Contents

ABSTRACT 3

1. OVERVIEW 4

2. PERFORMANCE EVALUATION 5

2.1. LOGISTICS NETWORK: 5

2.2. TRANSPORTATION STRATEGY 5

2.3. INVENTORY MANAGEMENT STRATEGY 5

3. LOGISTICS CHAIN ISSUES, AND SOLUTIONS 6

3.1. CHALLENGES FACED COOL CARGO SUPPLY CHAIN 6

3.2. CHALLENGES FACED STARBUCKS SUPPLY CHAIN 7

4. LOGISTICS CONTRIBUTION ON SUPPLY CHAIN 7

5. CONCLUSION 8

6. REFERENCES 9

Abstract

I have handled two different supply chains for two different business, where the first one is concerned with the transportation of the perishables from Asia to USA, and UK, while the other business is concerned with the coffee beans and the strategy of maintaining a responsive supply to its retail stores at different spots of the globe.

Starbucks Company was selected to evaluate its supply chain and logistics, and the methodologies that were implemented to improve the business performance. In addition, I have handled the main case of this report, which is the evaluation of the Cool Cargo logistics, issues they faced and how they solved it.

In the overview section, I have presented an overview of Cool Cargo, and Starbuck. Also, the main points of the report were addressed with a brief description. The second section contained the current services of each supply chain such as the network of the logistics, and the transportation and the inventory management strategy of each business.

Next, in the third section, the logistics issues and solutions of both companies were addressed structure. The fourth section gives brief information about the logistics contribution to the supply chain. The fifth section contains the conclusion of the report.

1. Overview

Having the perishable goods to be transported from a place such as Thailand to Europe and USA markets was at risk due to the long distance and the need of storing such products in a certain temperature to ensure it will remain fresh when delivered to markets. This big challenge as described by Tim Broekhuizen, Operation Manager at Cool Cargo (http://www.freshport.asia, n.d), was not easy to overcome, but due to the need of delivering a good service with high quality, a new method of cool transport was developed, with cost-effective solutions. Cool Cargo is one big company that specialized in the cool chain transportation where its services covers the air cargo from the packaging area to the ground handling facilities (http://www.coolcargo.com, n.d).

In the other side of this report, Starbucks Company, which was opened in 1971. The company is one of the premier roaster and retailer of specialty coffee in the world (http://www.starbucks.com, n.d). Starbucks have five company-owned coffee roasting plants, 24 co-manufacturers, and one tea processing plant. Also, it has 9 regional distribution centers, 48 central distribution centers, and 6 green coffee warehouses. All of the centers are supplying the retail stores in different countries, which forms a strong and responsive supply chain.

2. Performance Evaluation

2.1. Logistics Network:

The logistics network is considered as an important factor for the success of the business and one element that impact the supply chain performance. Cool Cargo logistics has different stages with one goal. The company handles the process from the farms to the plants, then to the terminal. There were some innovative ideas, which were integrated into the company services where it adds value to the overall quality and performance. The main goal of the company is to transport the perishables fresh and in good quality to the customers in Europe and USA.

The Starbucks Company is having a different logistics network. The company has to maintain a sustainable supply flow of the products to each retail store on time and with quality. The process of the logistics is quiet long, but it wasn't difficult to achieve. The different warehouses and the distribution centers locally and internationally helped the company to increase its responsiveness to face any changes in the demands, and to keep all the retail stores are fully equipped with the required amounts of supply. The new logistics system that was suggested by Gibbons, senior VP of global manufacturing operations, who was assigned to run the company supply chain, was very effective on the overall performance of the company (Cooke, 2010).

2.2. Transportation Strategy

Cool Cargo is using different types of transportation modes. It uses the trucks to transport the harvested asparagus to the plants, and the airplanes to transport the final products to the markets in Europe and USA. This process requires special technologies to keep the goods cold and fresh (Rushton et al., 2010)

The Starbucks is utilizing the third party services to truck the green beans to the roasting plants, and truck the finished products from the plants to the distribution centers, then to the outlets stores (Cooke, 2011). The new design of the supply chain structure and framework reduced the costs and the response time of the logistics, and all the localized and well-distributed DC's gave the product more variety and availability as explained by Chopra and Meindl (2010, pp.69-72)

2.3. Inventory Management Strategy

Maintaining a balanced inventory that to fulfill the requirements of the business internally and externally need to be achieved in order to minimize the waste and the additional costs (Rushton et al., 2010). It is essential to match the supply and the

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