Dive Brief:
- Starbucks is testing a 24-hour operating model while scaling daily delivery efforts to improve speed, availability and reliability in its supply chain, per a July 29 earnings call.
- Through the around-the-clock system, the coffee company aims to build a platform that can create pull-through in the supply chain and replenish inventory within 24 hours so “we’re never out of stock,” CEO Brian Niccol said.
- The effort is expected to shrink the back of house and ensure Starbucks has the “right inventory at the right location at the right time,” Niccol said.
Dive Insight:
Starbucks is testing out new methods to optimize inventory management and create a more efficient and modern supply chain. Niccol said new technology, including inventory ordering systems, will be a critical part of the strategy in fiscal 2027.
The coffee company’s latest initiative comes after it deployed an artificial intelligence-powered tool last year to help employees keep better track of in-store stock. The tech, which used computer vision and 3D spatial intelligence, aimed to automate aspects of inventory counting, with the intention of later automating some restocking orders.
However, nine months later, Starbucks decided to kill the computer vision inventory counting system as employees dubbed it “unreliable.” Instead, the coffeehouse is opting for a single process across all inventory counts to support accuracy.
Last year, the coffee chain also trimmed its SKUs by 30% in a bid to simplify its menu. Cutting menu items, including several from its drink selection, could also help speed up production of core menu items, according to the company.
