Under pressure: Here's why Starbucks' broken supply chain is killing the global coffee giant

Starbucks is saddled with Stone Age supply chain technology, according to Brittain Ladd, a consultant and former Amazon executive.

In a LinkedIn post, he said that he had spent the last week communicating, off the record, with current and former executives, directors and managers from Starbucks, specifically, the individuals responsible for the supply chain part of the business.

He commented: "I approached the discussions with a preconceived notion: Starbucks former CEOs; Howard Schultz, Kevin Johnson, and Laxman Narasimhan, all failed to invest the necessary capital to design and equip Starbucks with the optimal supply chain.”

“Based on the discussions, I was right. I place the blame for the Stone Age supply chain primarily at the feet of Schultz. Johnson had minimal understanding of the importance of supply chain technology, and Narasimhan was out of his depth the minute he became CEO."

Over the years, former Chief Supply Chain Officers, VPs and SVPs, had clearly outlined the gaps in Starbucks supply chain related to technology and the sub optimised logistics network, Ladd observed. "On multiple occasions, funding was promised to close the gaps only to be withdrawn. This forced the supply chain organisation to have to keep Starbucks mediocre supply chain operating without the right software tools, logistics facilities, and budget."

Chairman and CEO Brian Niccol is making the right moves, Ladd believes. However, he has to do more than proclaim that it takes too long to get products to the stores, and that the stores run out of inventory too frequently. In short, he must invest in the supply chain

Starbucks should replace its antiquated supply chain software with best-in-class tech with a focus on DeepSeek AI, Manus, and Solvoyo. The company is using software from o9 Solutions. "Why are Starbucks locations still running out of products so frequently? Is it the platform or is Starbucks not using the platform correctly? It’s inexcusable that it can’t keep products stocked in their stores," Ladd said.

He added: "I strongly suggest that Brian Niccol meet with Leo Laranjieria of MIT, to discuss the supply chain that Starbucks must have to meet customer demand and eliminate stores running out of inventory. Dr. Laranjeira should be hired as an advisor reporting directly to Niccol."

"The fastest way to grow and increase revenue is by selling more food (real food. Not the garbage they’re currently selling). Niccol should contact Marc Lore of Wonder and discuss a partnership. Regardless of the food being sold, it has to be in-stock when customers place an order."

Ladd concluded: "I applaud what Niccol is doing. However, without a significant investment in technology, network optimisation, and better inventory optimisation, the supply chain will remain broken. The purpose of a supply chain is to do one thing - enable growth. Don’t make the same mistakes that the other CEOs made, Brian. Invest in the supply chain."

Starbucks did not respond to our request for comment.

2025 RTIH INNOVATION AWARDS

Supply chain technology will be a key focus area at the 2025 RTIH Innovation Awards.

The awards. which will open for entries in March, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering. 

For further information on the 2025 RTIH Innovation Awards, please fill in the below form and we will get back to you asap.