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Gregory JavorVP Global Supply Chain Operations

Tuesday June 22nd 2010

Starbucks Coffee CompanyA look inside the Supply Chain transformation journey

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Today’s Talk

Starbucks The Starbucks Supply Chain

The Supply Chain Transformation

Journey

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Where We Began

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From One Little Bean Store

• 16,700 retail stores

• 120,000 partners

• 51 countries

• 50M customers per week

• Our products:- Coffee and Tea- Handcrafted Beverages- Consumer Products

Stores

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More Than a Cup of Coffee

Our mission is to inspire and nurturethe human spirit –one person, one

cup, and one neighborhood

at a time.

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Starbucks Partners

“We’re not in the coffee business serving people.

We’re in the people business serving

coffee.”

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The Starbucks Supply Chain

...is responsible for the supply of all products

that contribute tothe Starbucks experience…from the coffee in your cup, to the cup itself and

the table it rests on –at every Starbucks

store around the world.

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The Starbucks Supply Chain

• Plants- Coffee Roasting: 5- Tea: 1- Co-Manufacturing: 24

• Distribution- RDCs: 13- CDCs: 42- Green Coffee Warehouses: 6

> $4.0B Enterprise Spend> $0.8B Operating Expense > 4.4M Deliveries per year> 1.1M Picks per day

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The Starbucks Supply Chain

“Get goods into customer hands”Provide information that completely answers the

customer’s question in a manner that builds confidencein the Supply Chain

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The Starbucks Supply Chain

At the heart of what we do are products sourced ethically, made with the highest quality,

and freshly delivered to our customers.

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US Sales

The Case for Change - 2008

Supply Chain PerformanceSupply Chain Costs

$

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The Case for Change - 5 Theatres

1. Admission of Guilt of self induced mistakes by the SLT

2. Global Financial Crisis

3. Competition

4. The Web

5. Foundation - preserve and enhance our culture and values

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The Supply Chain Transformation Journey

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Supply Chain Strategy - Our Purpose

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Our Game Plan - How We Operate

Treat people well

Get the job done – safety, service,

quality & cost

Bring new products to

market

Move to a higher

performance level

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Structure - How We Organize

Plan – Source – Make – Deliver

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The Golden Rules - How We Lead

Highlight ProblemsWe’re paid to know what’s broken, needs to be improved, changed or fixed

Sleep WellDon’t lose sleep over things you don’t know how to handle –ask for help

Be TransparentOperate with an “open window” so anyone can see what and how you are doing

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Winning - Measuring SuccessCumulative Total Enterprise Savings

On-Time In-Full (OTIF) Supply Chain Operating Expense MAT

Safety IncidentsOSHA Recordable Frequency in SCO Manufacturing Network

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Strategic Framework - The Long Term Plan

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People - Develop Partners and Talent

• Develop partners and attract talent to build world-class capability

• Foster a workplace where partners are:- Entitled to training- Mentored for success- Inspired to advance

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