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Starbucks Focuses on Inventory Rotation

To keep beans from passing sell-by date, Starbucks focuses on reducing inventory exceptions. A simple sticker provides part of the solution.

(Boonton, NJ, December 12, 2014) — At the Starbucks regional distribution center in Tennessee, the boxes of espresso beans stacked on a rack look nearly identical.

The only difference? One case expires in October, the other in November.

If a picker grabs the fresher product, he just created an “exception” — a pick that, while not inaccurate, is slightly less than optimal.

For a company that moves as much product as Starbucks, even the occasional out-of-order picks can add up fast. Exceptions raise the risk that coffee beans or tea will reach their expiration date while they’re still in the warehouse or on the shelf of a coffee shop.

To tackle exceptions, Starbucks employees wrote an algorithm to track product by expiration date, then created metrics to gauge how well the company was managing inventory.

They also took some decidedly low-tech steps including:

  • Reminding pickers to only pick from the front of flow-through racks.
  • Placing “Pick Me First” stickers on returned products to move them quickly through the warehouse.

Details on how Starbucks reduced exceptions, and on preventing accidents, and sharing truck space with rivals appears in the December issue of Distribution Center Management.

Read the full article, How to prepare for an increase in dimensional-weight shipping costs.

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