Starbucks brews savings plan

19 December 2008
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19 December 2008 | Jake Kanter

Starbucks intends to save $75 million (£50 million) through procurement by the end of this year.

The coffee giant wants to make its supply chain more efficient during the economic downturn. It aims to improve vendor performance and meet cost-savings targets.

Speaking at an analyst conference in New York last month, chief financial officer Troy Alstead said the supply chain was built for speed, not efficiency, and must improve to match competitors. He added there were "huge savings opportunities" identified by Peter Gibbons, executive vice-president of the global supply chain.

"These are initiatives from the bottom up that we are confident will produce savings over a number of years."

Starbucks also intends to build a more integrated supply chain, promoting better collaboration between planning, sourcing and distribution. He said new technology will enable the firm to improve forecasting, as well as simplifying ordering and delivery of goods.

In addition, Starbucks wants to reduce logistics and manufacturing costs by $25 million (£16 million) in 2009. Both figures will contribute to the company's overall target of saving $400 million (£270 million) in the next three years.

SMdec2008

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