SCM300 EXAM 3 QUESTIONS &
ANSWERS
From which parts of the world is coffee sourced? Why is that a concern for Starbucks? -
ANSWERLatin America (50%), Pacific Rim (35%), and East Africa (15%) from mostly
small farms
Regional instability creates supply chain instability
Describe Starbuck's supply chain - ANSWERfarms to processors to suppliers to
starbucks
1. Producers= small to medium-sized family-owned farms; sold their outputs to
processors
2. Processors= turned coffee into parchment or green coffee; sold it to suppliers
3. Suppliers= provide marketing, dry milling, technical coffee expertise, financing, and
export logistics
What is CAFÉ practices and what is its purpose? What are the benefits to Starbucks? -
ANSWERa way for Starbucks to ensure a sustainable supply of high quality coffee
beans
1. Score Suppliers - Provide incentives to best suppliers (scored based on farmer base)
2. Farmers - Additional funds• Starbucks sustainable
3. farming education programs for farmers
strengthened supply base; improved its marketing ability; increased its visibility into the
supply chain; improved reputation
How does a company join CAFÉ practices? What are the requirements? What are the
benefits once they join? - ANSWER1. Pre-requisites= coffee quality and economic
transparency
2. After prerequisites they are graded
>60= supplier qualified as a Preferred supplier
and would gain preference in future Starbucks coffee purchases
>80= qualify as Strategic suppliers and would earn a
Sustainability Conversion Premium of $0.05 per pound of coffee for one year
> +10 in year= additional Sustainability
Performance Premium of $0.05 per pound of coffee to suppliers
What are some of the challenges Starbucks faced in implementing CAFÉ practices? -
ANSWER1. poor information systems so difficult to gain economic transparency
, 2. hard to effectively communicate the revised requirements and practices
3. Auditors had to travel to the farms, which were often located in barely accessible
areas
The 3 Parts of Corporate Social Responsibility (CSR) - ANSWER1. Legal and ethical:
good practice and attitude
2. Serve community/society: programs benefiting society
3. Sustainable: earth friendly practices
SA8000 - ANSWERDeveloped by Social Accountability International; Certification that
focuses on social responsibility
Audits in:
o Child labor
o Health and Safety
o Discrimination of any type
o Payment/Compensation
o Unionization Rights
o Forced labor
o Disciplinary practices
o Working hours
o Ethical Management Systems
Sustainability - ANSWERDevelopment that meets the needs of the present without
compromising the ability of future generations to meet their own needs.
Green Issues:
1. Natural resources
2. waste disposal
3. toxic emissions
4. safety
4 Sustainability frameworks - ANSWER1. Triple bottom line - consider the possible
economic, environmental, and social outcomes associated with business decisions
2. Reduce, reuse, recycle - consider ways to conserve materials and energy, maximize
the use of their resources, and find new uses for items that are no longer valuable.
3. Cradle to grave design vs. Cradle to cradle design - In the past items were designed
to be purchased and used for some purpose. Now, consider how to repurpose
4. Closed loop supply chains - Utilizing the idea of cradle to cradle design
6 Challenges of being sustainable - ANSWER1. motivating supply chain partners (don't
see value)
2. customers want things that last (don't breakdown in landfill)
3. inconsistent legislation (local vs. global)
4. many decisions (lack of understanding/knowledge)
5. metrics (find and measure problems)
ANSWERS
From which parts of the world is coffee sourced? Why is that a concern for Starbucks? -
ANSWERLatin America (50%), Pacific Rim (35%), and East Africa (15%) from mostly
small farms
Regional instability creates supply chain instability
Describe Starbuck's supply chain - ANSWERfarms to processors to suppliers to
starbucks
1. Producers= small to medium-sized family-owned farms; sold their outputs to
processors
2. Processors= turned coffee into parchment or green coffee; sold it to suppliers
3. Suppliers= provide marketing, dry milling, technical coffee expertise, financing, and
export logistics
What is CAFÉ practices and what is its purpose? What are the benefits to Starbucks? -
ANSWERa way for Starbucks to ensure a sustainable supply of high quality coffee
beans
1. Score Suppliers - Provide incentives to best suppliers (scored based on farmer base)
2. Farmers - Additional funds• Starbucks sustainable
3. farming education programs for farmers
strengthened supply base; improved its marketing ability; increased its visibility into the
supply chain; improved reputation
How does a company join CAFÉ practices? What are the requirements? What are the
benefits once they join? - ANSWER1. Pre-requisites= coffee quality and economic
transparency
2. After prerequisites they are graded
>60= supplier qualified as a Preferred supplier
and would gain preference in future Starbucks coffee purchases
>80= qualify as Strategic suppliers and would earn a
Sustainability Conversion Premium of $0.05 per pound of coffee for one year
> +10 in year= additional Sustainability
Performance Premium of $0.05 per pound of coffee to suppliers
What are some of the challenges Starbucks faced in implementing CAFÉ practices? -
ANSWER1. poor information systems so difficult to gain economic transparency
, 2. hard to effectively communicate the revised requirements and practices
3. Auditors had to travel to the farms, which were often located in barely accessible
areas
The 3 Parts of Corporate Social Responsibility (CSR) - ANSWER1. Legal and ethical:
good practice and attitude
2. Serve community/society: programs benefiting society
3. Sustainable: earth friendly practices
SA8000 - ANSWERDeveloped by Social Accountability International; Certification that
focuses on social responsibility
Audits in:
o Child labor
o Health and Safety
o Discrimination of any type
o Payment/Compensation
o Unionization Rights
o Forced labor
o Disciplinary practices
o Working hours
o Ethical Management Systems
Sustainability - ANSWERDevelopment that meets the needs of the present without
compromising the ability of future generations to meet their own needs.
Green Issues:
1. Natural resources
2. waste disposal
3. toxic emissions
4. safety
4 Sustainability frameworks - ANSWER1. Triple bottom line - consider the possible
economic, environmental, and social outcomes associated with business decisions
2. Reduce, reuse, recycle - consider ways to conserve materials and energy, maximize
the use of their resources, and find new uses for items that are no longer valuable.
3. Cradle to grave design vs. Cradle to cradle design - In the past items were designed
to be purchased and used for some purpose. Now, consider how to repurpose
4. Closed loop supply chains - Utilizing the idea of cradle to cradle design
6 Challenges of being sustainable - ANSWER1. motivating supply chain partners (don't
see value)
2. customers want things that last (don't breakdown in landfill)
3. inconsistent legislation (local vs. global)
4. many decisions (lack of understanding/knowledge)
5. metrics (find and measure problems)
