Starbucks' Success: Managing Data with TPS and DSS - Essay Sample

Introduction

The success of failure of any company solely relies on their ability to manage their information. Because of wide are demand for supplies, Starbucks operates using a transaction processing system TPS, that helps them in collecting, modifying and retrieving all their transaction records (Pudasaini, n.d). The company also uses a decision-support system DSS, that efficiently manages and analyzes the collected data, by making comparing its sales and giving accurate revenue decisions (Rouse, 2010). Lastly, Starbucks utilizes executive support system, primarily to convert the analyzed results into reports and billings (Techopedia Inc, n.d).

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Besides, the organization has its web portal that improves privacy by ensuring that only the authorized individuals access the collected data. For example, according to UK Essays (2015), the web portal is designed to offer two different levels of access: the first is for the employees and the other one to the corporate employees. The available analyzed reports and other training materials for the employees have facilitated a smooth flow of information in the company (UK Essays, 2015).WordPress (20120 also denoted that the information management system at Starbucks have helped it, in proposing for new suitable locations, where the target demographics are accessed straightforwardly.

Does the Company’s IMS Provide a Competitive Advantage?

Ideally, the ability of a company to manipulate its collected data for internal usage is a critical tool for gaining a competitive advantage in the market. Besides, the IMS found in Starbuck Company allows promotes quick information sharing between its employees and employers. Cronje (2016) outlined that "information systems that support an interchange of skills and knowledge and information across the systems of an organization, improve its competencies, thus provides it with an exemplary competitive advantage." Moreover, the fact that Starbucks uses a value-based pricing methodology in assessing their customers, it is possible to analyze the data obtained from IMS, to measure the extent of customer's willingness to purchase their products (Porter & Millar, 2014). Typically, Porter and Millar (2014) suggested that in an environment where a company can produce valuable products above their overall expenses, then possibilities are that a dramatic increment in the amount of revenue may be realized, a fact that generally boosts a firm’s competitive advantage.

Starbucks' use of a global logistics system has guaranteed them a unique insight concerning their supply chain. Studies indicate that Starbucks used to spend averagely high on the transportation expenses, before its establishment of this specific IMS (Cooke, 2010). However, by employing the use of the global logistics system, the company has reduced the total expenses because there are no longer transportation costs: it has also achieved more reliable deliveries, thus allowing customers to obtain their desired products at any time.

How IMS Helps in the Coordination Between the Supply Chain Partners?

Starbucks is a multinational company, with an even distribution of supply chain partners in over six distinct continents. Besides, the organization has a total of nine distribution centres: five in the USA, two in European zones, and two located in Asia. To promote intercommunication between these firms with significant geographical distance, Starbucks incorporated the use of a global logistics system besides TPS, DSS, and ESS. The system is centralized enough within the elements of safety, delivery time intervals, expenses within the supply chain and overall company's savings that all offer an efficient evaluation of its supply chain partners (Gadsden, 2015).

How IMS Monitors Orders and Inventory Levels to Satisfy its Customers

The global logistics system has flexible automation, which can easily monitor the functionalities of the orders and inventory levels. The automation helps the organization to make adjustments whenever there is need depending on the set limits based on the objectives of Starbucks. The system is a joy to the customers because it can always detect when the demand of a particular product is high, and provide recommendations for an increase in either production or stock refilling, to ensure that its availability is enhanced, based on the demands (Gadsden, 2015). TPS, DSS and ESS are also useful in the organization, specifically in tracking inventories and nature of the sale, for use by the management (Technopedia Inc, n.d). The ability of the bins to monitor their orders helps them in scheduling to ensure that every customer is served at the right time, while following the levels of inventories, allows the managers to coordinate with its employees, in providing that the company does not run out of its stock for products in any time of consumers need. For this reason, the customers are more likely to remain loyal and satisfied throughout with the services offered by Starbucks.

Why is Managing Information More or Equally Important than Moving Products?

One of the most critical components in business is the ability of an organization to implement the use of an active IMS. Although moving products is essential, an absence of proper IMS guarantees a poorly-organized system for the flow of products (Banks, n.d). Furthermore, a company without an IMS would be missing the critical information concerning sales, inventories and customer relations (Banks, n.d). It is because, most of the organizational decisions are usually based on the information derived from the IMS (Banks, n.d). Conventionally, IMS is not only beneficial for the provision of information that is applicable in the management of company's daily operations but also acts to facilitate business operations in line with its mission and vision, thus promotes the success of a company (Banks, n.d).

References

Banks, L. (Nd). Importance of the Management Information System. Retrieved February 04, 2018, from http://smallbusiness.chron.com/importance-management-information-system-5256.html

Cronje, M. (2016, February 04). Management of Information Systems and Competitive Advantage. Retrieved February 04, 2018, from https://www.linkedin.com/pulse/management-information-systems-competitive-advantage-michelle-cronje

Cooke, J. (2010). From Bean to Cup: How Starbucks Transformed Its Supply Chain. Retrieved February 04, 2018, from http://www.supplychainquarterly.com/topics/Procurement/scq201004starbucks/

Gadsden, D. (2015, March 05). What Can We Learn From Starbucks’ Supply Chain Management? Retrieved February 04, 2018, from https://www.maistro.com/blogs/can-learn-starbucks-supply-chain-management/?blur_redirect=1516649528.552

IAC Publishing, LLC. (Ed) (Nd). Why is Management Information Systems Important? Retrieved February 04, 2018, from https://www.reference.com/business-finance/management-information-systems-important-b947e8f983470b81#

Porter, M., & Millar, V. (2014, August 01). How Information Gives You Competitive Advantage. Retrieved February 04, 2018, from https://hbr.org/1985/07/how-information-gives-you-competitive-advantage

WordPress (Ed) (2012, February 08). Information Technology at Starbucks. Retrieved February 04, 2018, from https://farzanatasminali.wordpress.com/2012/01/08/information-technology-at-starbucks/

Pudasaini, S. (Nd). Starbucks Coffee Company- MIS Review. Retrieved February 04, 2018, from https://www.scribd.com/document/144610272/Starbucks-Coffee-Company

Rouse, M. (2010, March) Decision Support System (DSS). Retrieved February 04, 2018, from http://searchcio.techtarget.com/definition/decision-support-system

Techopedia Inc. (Ed) (Nd). Transaction Process System (TPS). Retrieved February 04, 2018, https://www.techopedia.com/definition/707/transaction-process-system-tpsfrom

UK Essays. (2015, March 23). Management Information System at Starbucks Management Essay. Retrieved February 04, 2018, from https://www.ukessays.com/essays/management/management-information-system-at-starbucks-management-essay.php