Starbucks has grown from one store in 1971 to over 24,000 locations across 70 countries today.  However, scale creates operational complexity with potential for costly inefficiencies that can impact a company’s ability to deliver on its customer promise. Demand for high quality coffee has outrun supply for the third consecutive year as climate change and labor shortages have impacted growers, creating short-term and long-term potential for variability in coffee bean supplies.  In addition, pricing pressure from competitors, mobile-ordering bottlenecks in stores, and recent brand reputation challenges resulting from political statements made by senior executives are causing Starbucks to cede market share, creating concerns about the company’s ability to meet sales forecasts.   To maintain profit margins, flexibility to match these swings in supply and demand with one another is critical and can provide a competitive advantage over peer companies. Investing in supply chain technologies can provide Starbucks the agility and cost control necessary to stay on top in a highly competitive industry.
A Behind the Scenes Look at Starbucks Global Supply Chain 
Management has made significant short and mid-term investments in digital technologies to reduce waste and limit inefficiency in their supply chain in recent years. One such example is their adoption of an automated information system combined with a centralized logistics planning network. This allows real-time monitoring of demand down to the store-level, as well as up-to-date information on inventory levels, storage capacities, and trucking schedules. With this level of visibility at each stage of the process, the company can create and adapt production and distribution schedules that match consumer demand.  This is particularly important given the perishable nature of coffee and the short window after roasting beans where freshness is ideal for brewing a great cup of java.
Other applications of technology in the distribution system that consumers are more aware of are the My Starbucks Rewards Program and Mobile Order & Pay system. While these are certainly marketing and operations-driven initiatives, the data collection with these systems for regional and seasonal demand fluctuations in product mix related to customization further enhances the responsive capabilities of their digital supply chain systems. In his 2015 fourth quarter earnings call, Howard Schultz discussed how “customer-facing and partner-facing mobile and retail experiences…are improving our efficiency and in-store execution, increasing our profitability, enabling us to further extend our lead over competitors and…deliver an elevated Starbucks experience to our customers.”  As consumers increasingly demand higher levels of customization and transparency in their products, Starbucks will have to continue to innovate to maintain a competitive edge.
When assessing the biggest threats facing Starbucks over the next decade, I question if the company will become a victim of its own success. Shultz has acknowledged that brand ubiquity has started to threaten its reputation as an upscale provider of premium coffee beverages.  In addition, as growers are stressed to adapt to climate change, Starbucks could face rising prices and declining quality with the volume of beans they have to source to meet customer demand.  Starbucks management could address these concerns by investing in blockchain technologies within their supply chain.
Imagine being able to track coffee beans from “crop to cup” and provide detail and transparency on every touch-point in the process to farmers, partners, and consumers. That is exactly what blockchain startup Bext360 is building the capabilities to do. Machines equipped with sensors that can sort and identify coffee cherry size and ripeness, indicators of quality, are used to grade and digitally attach this information in an identification tag that will follow the beans for the life of the product.  Layered on top of the existing digital infrastructure, customers would have the ability to see where the beans for each coffee beverage they order were sourced, what average grade was assigned to the cherries from that blend, and when those specific beans were roasted. Customers could also verify sustainability practices, in addition to a virtually limitless potential for personalization.
Combining this data with soil readings and weather reports would also allow growers to quickly leverage each other’s best practices in adapting to climate change, helping alleviate potential future sourcing complications. John Deere and AGCO are two companies in the agricultural business that are already beginning to create these systems-of-systems to optimize on overall farm performance metrics. 
These are lofty goals however, and questions remain about the implementation and scalability of blockchains in the coffee industry:
Is it too early in the development cycle of blockchain technology for Starbucks to invest in a pilot project? Is their sourcing market too fragmented to commercially implement this type of technology?
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