Costa Coffee Logistics & Operations: Case Study

Tasks in a Coffee Shop

Discuss about a Report on  Case Study – Costa Coffee ( Logistics and Operations )?

A Costa coffee shop or any coffee shop in general has typically a collection of work that are a part of daily routine in the coffee shop that may include the following but not limited to only:

Buying of raw materials of coffee like cream, coffee, milk, sugar, etc.

Cleaning of utensils

Cleaning of shop

Arrangements at the shop

The billing and order process ( the IT work )

The house keeping

The management of staff and coffee shop

Entertainment

Ambience of the place

The training of staff

Various maintenance activities, etc.

Among these many activities there some of the activities which are directly related to customer experience like the way coffee is being served, the taste of Costa coffee the ambience, the timely delivery of the order, the hygiene and the cleanliness maintained in the restaurant, the  billing process, the staff behavior, etc. Among these things many are related to the process which can be outsourced and some are related to the process which should be kept in house to the optimum operations of the shop. But with regard to something’s which might prove to be in the best interest of everyone ( the Costa coffee shop as well as customers )  to  outsource. The main reason of such an outsource is that the things which are related to operations but are not that much related to the core operations may be given to some specified agency or organization to work on. And the company can operate in the field where it specializes and can provide the best service to clients or customers when the need not address the non core issues which may affect the operations but yet are not critical to the performance or operations but may impact the overall functionality of the organization. This can best be understood in terms of an automobile industry. Consider an industry which operates and produces vehicles. Now for such an organization there are many aspects they produce automobiles on an assembly line, they have advertisements, they have a logistics department for the transportation of finished product from assembly line to warehouse or inventory then to the dealer network at different places. Among these we need to outsource the logistics to some specialized agency which might be in a better position to delivery and could also bring the cost advantage to our organization.

Outsourcing Non-Core Tasks

Now, these are the kind of decisions which have a very significant impact and in some cases may even bring a competitive advantage to the organization both in terms of short term advantages as well as long term value creation. Settling over a right choice(s) could add essentially to your association primary concern to a great expense reserve funds and expanded ability. Outsourcing can convey new personality into our commerce, and it can similarly available time up for expansion and other tasks which require attention. On the other hand, settling on A incorrect option can put your commerce at a purposeful burden. perhaps you might go down manage of elite data, or get segments that don't convene your association(s) excellence benchmarks.

Now such kind of decisions can be best made by the use of the Outsourcing Decision Matrix which will help us see plainly which undertakings, procedures, or capacity you have to to stay in house  and which can be firmly out sourced with out any issues. In this case study, we will implement the Outsourcing Decision Matrix for the Costa coffee to identify which tasks may be outsourced and which are not then we will try to mitigate the risk associated with them.

Fig :- Outsourcing Decision Matrix

The Outsourcing Decision Matrix is basically the combination of 4 quadrants as shown in the above fig. :

It will help us to identify the outsourcing factors which will be as follows :

The strategic importance of the task, because ultimately the strategically significant task are important sources of competitive advantages which we get over our peers.

How will a particular task affect out organizations operational performance. It should be understood that any work which have a high impact on operational readiness must be done with great  care because it will ultimately affect the proper working of the company and affect its profits.

The diagram shown above has 4 quadrants which can be described as below:-

The strategic alliances(first quadrant ) : here the task are high in terms of their significance as far as the operations of the organization are concerned yet they have a very low yet contribute little to operational execution. In this way, despite the fact that you have to hold control of them to guarantee they are done precisely as you need, or you get the quality you need, they are moderately inconsequential as far as expense or smooth running thus not deserving of full in-house center. This implies that you ought to shape a vital partnership with any expert or specialist organization to take over your task with you into the loop.

Outsourcing Decision Matrix

Retain(second quadrant ) : Assignments in this quadrant are high in key significance and have a major effect on operational execution. These assignments ought to be kept in-house so that your association keeps most extreme control. Add to My Personal Learning Plan , truth be told – and it makes a monstrous commitment to the smooth running of the association. It is basically an organizations core competencies.

Outsource(third quadrant ) : Errands this quadrant are critical for effective operational execution, however are not deliberately imperative. These errands could securely be outsourced. They're basically not worth investing in-house energy overseeing.

Eliminate(fourth quadrant ) : Undertakings in this quadrant are not imperative to your association's general procedure and nor do they make a critical commitment to its normal operational execution. Despite the fact that you may not have the capacity to dispense with these assignments totally, it's imperative to check why you're doing them. A sample may be running a sponsored staff crèche. Albeit having an in-house childcare office may help you to pull in certain staff (key significance) or decrease non-appearance brought about by childcare issues (operational execution), does the exertion included legitimize doing it? Maybe it does, however just as, maybe you may be in an ideal situation paying your kin somewhat more, so they can stand to utilize autonomous crèches arranged close – by.

Tool Usage

Now, to use this tool, we need to identify:

1.   Our strategic important tasks : Investigate the undertaking's key significance to your business.

Is this undertaking imperative to your organization's upper hand? Is it a player in what makes your business exceptional? Does it have significant influence in your clients' choice of your items or administrations over those of your rivals?

2.   Contribution done to operational performance : Choose how vital this assignment is to your organization's normal operational execution. Will your operations quickly come to a standstill on the off chance that it's done seriously?

3.   Plotting all task on the matrix : Since you know where your errand is on the vertical size of vital significance, and where it is on the even size of operational execution, plot the undertaking onto the lattice.

The quadrant in which the assignment falls will give you an in number evidence in the matter of whether it ought to be outsourced, held, deliberately adjusted, or disposed of.

Now as discussed above we are going to plan our tasks accordingly, and plot them on the matrix which we have identified and discussed above.

Tools for Decision Making

Application Of Tool On Our Case

For every task we have to identify where it falls and what all is that which could be done that may help us out in our work.

Now for the tasks which we have identified lets play out and identify their appropriate place on our matrix.

Like coffee beans, cream, milk – these things fall into first quadrant and are of strategic importance so we can form a strategic alliance with some dairy product company and / or with some coffee bean company for the supply of raw materials. This is also applicable to other stuff like sandwiches or other things being served at the coffee shop.

Cleaning of utensils falls into the 3 quadrant , this particular task can be easily outsourced without any major affect on our working and our customer experience with slight monitoring.

House keeping is also falling into the 3 quadrant , this particular task can be easily outsourced without any major affect on our working and our customer experience with slight monitoring.

Arrangement at the shop also falls into the 3 quadrant , this particular task can be easily outsourced without any major affect on our working and our customer experience with slight monitoring.

The billing and the order process ( IT ) falls into the 1 quadrant , this particular task can be outsourced with major strategic alliance and it will affect on our working and our customer experience with slight monitoring. The expert company will provide us with a state of the art tools for the same.

The management of staff and Costa coffee shop, for this task falls in the second quadrant and it must be retained for the purpose of elite and unique a rewarding customer experience and must be kept in house any how.

Entertainment, this kind of stuff may be kept in house i.e. retained because it is also affecting out customer experience.

Ambience of the place, for this one is both important both operations wise as well as of customer experience so it must also be kind of retained .

Training of staff, this task involves the process of staff education and the way they provide service to the clients it also includes the process processing of the food and other stuff. It requires dedicated training so it must be divided into the 2 ways:

The first one will be the critical part which must be kept in house, this will include the process of training of staff for making and processing of coffee and other snacks.

While the other part of serving can be outsourced to any personality development training institute which may take care of all the stuff.

This basic point made by this section is that operation destination are remarkably wide. operation management has a result on the 5 universal classes of partners in several association. Partners is a broad expression yet is for the mainly used to mean a person who can have an enthusiasm for, or is prejudiced by, the operations. It is of basically 5 types :-

Customers - This category is of the clearest persons who will be prejudiced by any commerce. The part goes ahead to call the 5 operation implementation goal be relevant basically to this gathering of persons.

Supplier(s) - Operation could have a noteworthy result on supplier, together on how they do well themselves, and on how viable they are at supply of the operation(s).

Shareholder(s) - The improved an operation is at delivering merchandise plus administration the more likely the entire commerce is to succeed and shareholders will prove to be the real recipient of this.

Workers - likewise, representatives will be largely improved off if the association is well-off. Though operations obligation to council go a long ways. It incorporate the operational situations which are restricted by the way the operation is planning out.

The public - though often having no direct financial connection with the association, public and gathering in the civic eye everywhere can be a affect by the way its operations directors carry on. The clearest sample is in the natural compulsion showed by operation supervisors.

The 5  performance has following objectives:

excellence is put primary in our rundown of implementation destination on the basis that many establishment trust it to be the most grave. indisputably a large amount of has been collected about it than whatever other operations implementation aim. To the degree this introduction to the point is apprehensive, excellence is talked about to a great amount as far as it suggestive of ' conformance '. That is, the majorly necessary sense of worth is that an thing or management is as it should be.

Pace is a way for saying ' rate of response '. It imply the occasion between an outer or inward client asking for an thing or management.

external speed is essential in illumination of the information that it serve to act in response swiftly to consumers. Once more, this is usually seen definitely by customers who will be additionally inclined to come with extra commerce. At times as well it is imaginable to charge higher costs when management is fast.

The internal influences of pace have much to do with the expenditure dwindling. There are 2 range where velocity diminishes expenditure (declining inventory and lessening danger).

Dependability - reliability signify as ' being on point in time ' . At the last, customers get their things or administrations on instance. In spite of the detail that this description sounds good, it could be tough to count. What exactly is on time ? It is when the customer’s necessary delivery of the thing or management? or it is when they likely deliver? It is when they were certain in delivery? Once again, it has external as well as internal influences.

External steadfastness is for the the majority part view by customers as something worth grateful for. completely not on time with delivery of goods and administration can be an important annoyance to customers.

Internal steadfastness has a power on cost. The segment distinguish three routes in which operating cost are inclined - by saving so as to spare time, cash easily, and by giving an alliance the reliability which permit it to improve its efficiency.

Flexibility - It is more complicated goal on the basis that we use “ flexibility " to denote such a large number of characteristic equipment. The critical end to remember is that flexibility and reliability signify as having the ability to modify the operations.

Cost – Under this are 2 grave focus. The main is that the cost makeup of varied relations can alter extremely. Secondly, the additional 4 implementation target all contributes , within, to moving back expense.

So analyzing on the various points on the basis of there 5 – performance objectives like explained.

Loss of business information - Organizations should painstakingly survey business learning and figure out whether moving it to a seaward area will trade off the organization's progressing capacity to perform at the obliged levels.

Vendor inability to convey - A typical oversight for IT associations lies in not executing an emergency course of action to manage the danger that a merchant, for reasons unknown, neglects to convey of course. High hazard or introduction may constrain the association to startlingly modify its outsourcing procedure (i.e. from a solitary seaward seller to various merchants).

Culture - Social contrasts incorporate religion, method of dress, social exercises and even the way an inquiry is asked or replied. Albeit most driving merchants have social instruction programs, the difficulties and expenses connected with social arrangement may not be unimportant or paltry.

Productivity fluctuation – Sometimes productivity is affected due to outsourcing because of the attrition rate at the vendor location. Which must be addressed by choosing reliable vendor with a credit at their disposal.

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