I had the pleasure of listening to Peter Gibbons, the EVP of Global Supply Chain Operations of Starbucks earlier today at the CSCMP Europe conference in Frankfurt.
Peter gave a great presentation entitled: “How influential is your supply chain?” He started his presentation with an amusing anecdote- which I’m sure many supply chain leaders could relate to.
He took the audience through what hypothetically the first week as the new supply chain boss consisted of; starting with getting the job offer on a Friday afternoon and celebrating with a glass of wine that evening at home. Monday, the new job starts and he is met by the Head of Sales, who mentions that as long as the right deliveries come in every day, then he will be fine. Tuesday, the CFO comes for a chat and asks that as supply chain is responsible for a huge percentage of company costs, if he could just reduce that cost a little he will go far. Wednesday the Head of Marketing simply asks that the supply chain is ready for and can fulfil any and all new product launches. Thursday, the HR Director comes to chat and wants to just ensure that all the people involved in the supply chain are well looked after. Friday is the turn of the CEO, who reminds him of their discussion during the job interview of designing a world class supply chain with best of breed ERP, WMS etc and that as long as he achieves all this then the future will be rosy. Friday evening comes along and he now needs a whole bottle of wine!
Peter gave the audience a few facts about the sheer size of Starbuck’s supply chain. $5billion in procurement spend; 90,000 deliveries a week or 4.7 million a year and 2.5 million picks a day- and that’s just the coffee supply chain, not to mention the spare parts, tables, mats etc.
The crux of the presentation was about the role of the supply chain leader in any business. There was a compelling argument as to why the supply chain department should not always say YES to everything asked of them by the business, nor to always say NO to everything asked of them. Instead Peter believes that the supply chain department should challenge and interrogate the business plan. It needs to feel empowered to ask the questions of the business plan, and find out if the company has all the facts necessary, rather than just building supply chain models as requested.
Peter then took the audience through the ingredients that make up supply chain success at Starbucks:
The number 1 purpose of Starbuck’s supply chain is to ‘expedite the growth of the business’. How can the supply chain team help Starbucks get to market quicker than others? Note the lack of mention of the status quo. In Starbucks, it is about growing the business successfully, and the supply chain needs to enable that as its number one priority.
The other ingredients highlighted were not, I believe, put in any order of greater or lesser importance. They were – Elevate supply chain performance (always doing it better); Inspire and develop talent (see the recent webinar featuring Greg Javor, SVP Global Logistics at Starbucks for more details on how they are doing this); Getting the supply chain team to feel comfortable as world class service providers; Leverage your influence – is your influence within the business as the supply chain leader delivering what the business actually needs to prosper.
Peter finished-up by asking whether people are successfully getting across to the rest of their businesses what the purpose of supply chain is. Supply chain leaders have to ensure that supply chain has the right sort of influence in their business to deliver exceptional results; supply chain leaders can increase their value to their companies by viewing their supply chains as solutions and real sources of business innovation.
Chris Saynor, CEO, eyefortransport
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