Skip to content
Search AI Powered

Latest Stories

Forward Thinking

Starbucks chairman and CEO pays tribute to supply chain management in CSCMP first-day remarks

Schultz says supply chain needs to be at the top of the corporate checklist.

Howard Schultz wants to let it be known that he gets supply chain management.

During a one-on-one interview yesterday at the Council of Supply Chain Management Professionals' annual global meeting in San Diego, the chairman and CEO of Starbucks Corp. was told by his interviewer, veteran practitioner Kevin Smith, that the company makes 20,000 deliveries each day to support more than 22,600 stores in 65 countries and territories.


"I don't think you know that," Smith told Schultz.

Schultz replied, "I know that!" Smiling, he glanced at the crowd with a look implying that it would be ridiculous to think otherwise.

Schultz can laugh about it now, but in early 2008, when he returned to the Starbucks helm after an eight-year hiatus, he confronted a supply chain that was dangerously inadequate for a company of its size and scope. Fifteen years of extraordinary growth had resulted in an oversaturation of stores, a situation that was painfully corrected upon Schultz's return by the closure of 900 U.S. stores in 2008 and 2009. Perhaps more structurally alarming was that Starbucks' supply chain management discipline had been sacrificed at the altar of multiyear growth, meaning that there were few processes in place to effectively manage the supply lines of a company that still wanted to expand, albeit more prudently. There were no metrics to measure service performance, and when measurement criteria were implemented in 2008, it was found that less than half of all store orders in the United States and Canada were delivered on time.

"Growth and success covers up mistakes," Schultz said, adding that supply chain management and human resources are two functions that are often left behind in such situations. Even as he walked back into the worst crisis of Starbucks' life, one that almost put the company under, Schultz acknowledged that "I don't think we spent five minutes on supply chain issues" during that time.

Nearly eight years later, supply chain management has been elevated to a loftier place in the Starbucks hierarchy, and the business functions in a way befitting an elite brand. Schultz, for his part, appears to have gotten religion. Referring to supply chain management as the "primary co-author of our business," Schultz said "you cannot scale a company of any kind without the skills and base of a supply chain."

He told a packed house not to "look at the function of HR and supply chain as the last thing. Think about them as the first thing."

Recent

More Stories

warehouse worker pulling cart

Cleo acquires DataTrans to speed procurement automation

Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.

According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.

Keep ReadingShow less

Featured

photo collage of warehouse tech

Supply chain pros are wary of inflation and labor woes

The top worries that supply chain leaders hope to address with new innovations this year include inflationary concerns (68%) and labor shortages (50%), according to a survey on innovation from the third-party logistics provider (3PL) Kenco.

And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.

Keep ReadingShow less
photos of white house and a loaded containership

Supply chain groups push back on Trump tariff plan

Industry groups across the spectrum of supply chain operations today are pushing back against the Trump Administration plan to apply steep tariffs on imports from Canada, Mexico, and China, saying the additional fees are taxes that will undermine their profit margins, slow their economic investments, and raise prices for consumers.

Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.

Keep ReadingShow less
reagan national DCA airport photo

Reagan National airport plans to reopen today after deadly crash

All flights remained grounded this morning at Washington, D.C.’s Reagan National Airport (DCA) following the deadly mid-air crash last night between a passenger jet and an Army helicopter.

In a statement, DCA airport officials said they would open the facility again today for flights after planes were grounded for more than 12 hours. “Reagan National airport will resume flight operations at 11:00am. All airport roads and terminals are open. Some flights have been delayed or cancelled, so passengers are encouraged to check with their airline for specific flight information,” the facility said in a social media post.

Keep ReadingShow less
wind turbine making electricity

GE Vernova to invest $600 million in U.S. manufacturing sites

GE Vernova today said it plans to invest nearly $600 million in its U.S. factories and facilities over the next two years to support its energy businesses, which make equipment for generating electricity through gas power, grid, nuclear, and onshore wind.

The company was created just nine months ago as a spin-off from its parent corporation, General Electric, with a mission to meet surging global electricity demands. That move created a company with some 18,000 workers across 50 states in the U.S., with 18 U.S. manufacturing facilities and its global headquarters located in Massachusetts. GE Vernova’s technology helps produce approximately 25% of the world’s energy and is currently deployed in more than 140 countries.

Keep ReadingShow less