Fit for Purpose Architecture
As Melotte and his team transition Starbucks into an agile and responsive supply chain, they realized it was necessary to create a fit for purpose architecture. To do this meant revising the design of networks, standards, and the role of the supply chain to continuously make sure that resources are being used efficiently and producing the intended outcomes. Previously, a few hubs were serving most of the business, but with no guarantee that each was providing service in the same way. The new architecture is designed to right-size capacity, ensure all nodes –distribution centers, plants, and third parties – are in the right locations, shape and elevate the capabilities of the supplier network, and finally, ensure the company is using the right distribution channels.
Starbucks consistently monitors its fit to for purpose architecture through quarterly network monitoring. Commodities markets are very vulnerable to changes in climate, price, and distribution. Where other retailers might only have to line up supply networks twice a year, Starbucks has to have a complete picture of the coffee market each quarter to account for changes and plan accordingly. Over time, Melotte plans to expand this type of modeling to cover the total supply chain to drive growth and gain new insights. Eventually, with the help of technology, having this level of visibility will help drive automation so, for instance, restocking can be managed algorithmically from end-to-end. In the short-term, it means store managers will have the right inventory to consistently meet customer requests.
Network modeling has also helped Melotte and his team forecast with significantly fewer errors. Melotte has a better understanding of where to put resources in the short-term, medium-term, and long-term. These insights give the supply chain team the ability to identify new ways of creating value and strengthening relationships with network partners by becoming a smarter, more agile customer.