Starbucks Plant Design - Esmeralda Ayala Ari Eryorulmaz Billy Jung Preethi Kasireddy
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Starbucks Plant Design
Esmeralda Ayala
Ari Eryorulmaz
Billy Jung
Preethi Kasireddy
Table of Contents
Subject Page(s)
Abstract………………………………………………………………………………………..2
Introduction……………………………………………………………………………………3
Activity Flow………………………………………………………………………………….3
Processes and Equipment…………………………………………………………………….4 - 5
Material Handling System Equipment………………………………………………………5 - 6
Layout Design………………………………………………………………………………..6 - 7
Personnel…………………………………………………………………………………..…7 - 8
Costs…………………………………………………………………………………….……8 - 9
Appendix……………………………………………………………………………………10 – 17
Works Cited………………………………………………………………………….………..18
1
Abstract
Starbucks, founded in 1971, is the world’s #1 specialty coffee retailer with more than 18,850
coffee shops in 40 countries. It operates approximately 8,800 of its shops, while licenses and
franchises operate the remaining stores. This report focuses on planning and designing the plant in
Kent, Washington based on the processes required to turn raw green coffee beans into the roasted
blended coffee beans they Starbucks brews and sells in their stores.
In particular, the report will analyze the process flow, material handling, personnel, and the
costs involved in the facility. The activities performed in the facility include receiving, raw material
storage, sifting, roasting, blending, packaging, palletizing, finished goods storage, and
delivery/shipping. The plant is open twenty-four hours a day and seven days a week and produces
about 1.5 million pounds of coffee beans per week. Our goal is design the most efficient,
economical, and profitable facility layout that meets all the processing and personnel requirements.
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I. Introduction
In project 1, we analyzed the distribution network for Starbucks Coffee Company, the
leading retailer, roaster and brand of specialty coffee in the world. In this project, we designed a
Starbucks manufacturing plant located in Kent, Washington. The manufacturing plant focuses
strictly on coffee bean processing and excludes other retail products that Starbucks produces. The
objective is to analyze our collected input data, including meaningful evaluation criteria (initial
investments, annual operating costs, Net Present Value, and Profitability), process and activity flow,
and equipment and personnel requirements in order to design an economical, adaptable, and cost
efficient final plant layout.
II. Activity Flow
The plant will occupy 225,000 sq ft. The weekly production volume is 1,500,000 lbs, and
therefore, daily production volume is 214,285 lbs. Our first step was identifying and analyzing the
flow of activities within the factory. Our analysis revealed the following activity flow: Receiving
raw material, raw material storage, transport to sifters, sifting, bean assortment, transport to roasting
machines, roasting, quality testing, cooling, transport to blending machines, blending, final testing,
packaging, palletizing, transport to finished good storage, and order fulfillment/delivery (See Figure
1 for process flow diagram).
III. Processes and Equipment
There are three critical steps in processing the beans: sifting and sorting, roasting, and
blending. Green beans will arrive weekly from suppliers in 150lb sacks. After receiving and
checking the material, forklifts will be used to transport the raw beans from the receiving docks to
the raw material storage area. Next, the beans will be poured out of the sacks and transported to the
sifter machine, called the Cimbria, which removes all dirt and debris and prepares the beans for
roasting. The beans are then transported using pneumatic conveyors into long, tubular, airtight silos
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that reach 40-50 feet high, which separate each of the different types of beans. The beans are then
released from the tubes and into the roasting machines according to the proportion of bean type
needed for each of the 30-aromas that Starbucks offers.
The beans are now ready to be roasted. The first stage of roasting dries the beans. Then, the
beans are cracked at approximately 205 °C (400 °F) in which the bean doubles in size, becomes a
light brown color, and experiences a weight loss of approximately 5%. In the next step the
temperature rises from 205 °C to approximately 220 °C, the color changes from light brown to
medium brown (Agtron # 60-50), and a weight loss of approximately 13% occurs. The second step
is followed by a second crack between 225-230°C. We estimate an overall loss of 20% in coffee
weight from roasting and so the roasting process will begin with 20% more raw beans that the
required output. After being roasted, an expert roaster tests the quality of the beans and discards
beans that do not meet Starbucks quality requirement. All beans that pass the quality test remain in
the roaster for the next 24 to 48 hours of resting time, as they continue to develop their flavor after
roasting. The beans are then transported to the blending machines using pneumatic conveyors. Next,
blending is done to mix the roasted coffee beans and create distinct coffee favors.
Daily production volume (P=214,285.71 lbs) was used to calculate how many roasting and
blending machines are required for the facility. The beans are roasted in 600-pound roasters and
blended in 600-pound blenders; however, we assumed that the machines were not filled to
maximum capacity during operation. Furthermore, the plant operates 24 hours a day, 365 days a
year. Some assumptions we made were: 1) 10 minutes to roast 550 pounds of beans, 2) 5 minutes to
blend 550 pounds of beans, 3) 2 hours of setup time every seven days, and 4) machines running at
80% efficiency. After inputting the respective values into the equation N = P*t / [(H-s)*p] shown
below, we determined number of roasters and blenders to be four and two.
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After blending, the beans are then immediately transported to the packaging machines using
pneumatic conveyors. Beans will be packaged in one-pound airtight bags with a one-way
one valve,
whichh allows the gases to escape, without the beans being exposed to the damaging air. Finally, the
packaged coffee is placed in boxes that are 4x2x2 ft and palletized into pallets with dimensions
4x4x4 ft.
IV. Material Handling System Equipment
We directed a lot of time and analysis towards determining the material handling systems
because they increase efficiency
ciency of material flow, reduce material
aterial handling costs, improve facility
utilization, improve safety and working conditions, facilitate manufacturing process, and increase
productivity. In lieu of the processes and activities described above, the factory will use six
pneumatic conveyors, two electric forklifts, and three cranes (see Figure 5 and 6).
). Pneumatic
conveyors use air pressure to convey materials through a system of vertical and horizontal tubes and
works well with bulk movement of coffee. A major advantage of pneumatic conveyors is that coffee
beans are completely enclosed, ensuring that they do not lose flavor. Also, pneumatic conveyor
c
belts allows for ore efficient use of space since they can implement turns vertical moves without
withou
taking up space horizontally.
Electric forklifts were chosen over gas
gas-powered ones because under
nder the Occupational Safety
and Health Administration (OSHA), it is recommended that the forklifts be electric in order to
prevent carbon monoxide exposure within the enclosed facility. The forklifts will be used transport
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the raw materials from the receiving docks to the storage areas for the cranes to organize into their
respective areas. After an order has been processed and finished goods are ready to be shipped, the
forklifts will transport the finished goods from the storage area to the shipping dock. Because each
of the two storage areas has three aisles, three cranes are needed.
V. Layout Design
We determined the following departments for our plant: raw materials storage, sifting,
roasting, blending, packaging, palletizing, finished goods storage, and offices. Using these
requirements and the process flow diagram, a thorough analysis of three distinct facility layout
designs was considered before choosing the final solution. The first alternative was designed
through the Facilities Layout Program (FLAP) using the relationship chart shown in Figure 2. The
two FLAP recommended plant layouts shown in Figure 3 were not effective and were inefficient.
For example, recommended layout 1 placed receiving (Department 1) directly in the center of the
warehouse. This would be near impossible. Also, it places blending and roasting areas (Departments
3 and 4, respectively) far apart, which would significantly increase the load distance from one
process to the other. Recommended Layout 2 was even more inefficient because it places Receiving
down the center of the plant and vertically lines up all other departments. This would make
transportation of goods from one department to the next haphazard because there is no logical flow
from one processing area to the next . Overall, the placement of the departments did not correlate
well with the process flow. Therefore, we chose not to rely completely on a computer-designed
layout and designed the second alternative.
Our second alternative layout was manually designed using the dimensions of an existing
Starbucks plant. It only accommodated forklifts to reduced initial investment costs. Forklifts are
lower in cost than cranes and have a maximum lift height of 25 feet. However, only four pallets can
be vertically stored. We assumed that the warehouse would store a week’s production, or 1,500,000
6
lbs, at any given time in the finished good storage area. The weight per pallet (unit load) is 576 lbs
(or four boxes). The finished goods storage area must therefore accommodate 2604 pallets. Based
on these assumptions and calculations, the storage area had to be approximately 200x400 ft.
The third and most efficient alternative used cranes. Although cranes are expensive, the
incremental costs were justified by the significant decrease in land cost due to more efficient storage
space efficiency. We calculated that pallets can be vertically stacked up to 11 units high per bay by
using cranes. Based on the calculations seen in Figure 6, our desired storage area is 189x48 ft. This
alternative helped decrease the storage area requirements significantly, which in turn led to land
cost savings of over about $426,550, which far offsets the cost for cranes which were $40,000 each.
The following lists the allocated space to each department in the final design:
Raw Materials Storage: 189’ x 48’ Packaging: 132’ x 102’
Sifting: 120’ x 93’ Palletizing: 123’ x 135’
Roasting: 74’ x 74’ Finished Goods Storage: 189’ x 48’
Blending: 36’ x 74’ Offices: 210’ x 40’
Each office, kitchen, storage rooms, and tool room is 225 ft^2 (15’ x 15’). The restrooms are
450ft^2 (30’ x 15’). The conference room is 900 ft^2 (60’ x 15’). The break rooms are 1200 ft^2
(30’ x 40’). The receiving and shipping lot is 12,800 ft^2 (160’ x 80’). The employee parking lot is
12,288 ft^2. Each parking spot is 8’ wide and 16’ long. The area between parking spots is 32’ in
order for 2 cars going in opposite directions to fit.
Our team also added essential feature to the facility. Two emergency exits were added on the
west and east side of the facility. A parking space for the two forklifts was added near the raw
materials and finished goods storage areas (10’x10’).
VI. Personnel
7The personnel are a key component to the facility because they are an essential to ensure
effective that the different processes will flow throughout the factory. The role for the Roasting and
Blending Manager, General Manager, Shipping Manager, and Receiving Manager is to make sure
that the processes they are overlooking run smoothly. In addition, they serve as a reference for other
workers to ask questions in case they don’t understand how to perform a certain tasks or run the
machinery. The first process that needs to take place is the cleaning of the green beans, which is
done by the Cimbra. The Cimbra cannot run on itself and so a Cimbra manager is needed. Since
blending and roasting are one the most crucial process that follows the cleaning process, we added
two expert roasters and one blender to our facility for each shift. Roasting and blending is mostly
done by the roasting and blending machines but the people in this positions need to make sure that
the machine is running correctly and the right amount of beans are inputted into each machine.
We also need personnel to operate the cranes and drive the forklifts for three shifts per day.
Lastly, we have janitors, secretaries, and one IT professional. Janitors are necessary because they
clean the warehouse. Secretaries collect and organize order processing documents and all other
paper work, while IT personnel provide technical support for all computer systems and databases
necessary to run the plant. We also assigned a shipping manager who will over see all shipments
made to ensure accuracy and efficiency. The total number of positions plus the quantity needed per
shift and how many shift per day is required for each position is displayed in the personnel costs
spreadsheet in the appendix (See Figure 7).
VII. Costs
We have decided to have four roasting machines, two blending machines, one pneumatic
conveyor system, two packaging devices, two forklifts to carry the material throughout the facility,
three cranes, eight silos, three filler-sealers, approximately 2600 pallets that are being used regularly
and 1300 pallets for back-up in our roasting facility. The initial investment for those items would be
8approximately $2,612,578.00 based on thorough research on the web.
In terms of employee costs, we estimate that our total annual salary costs would be little
less than $2.2 million dollars. Based on one of the most reliable salary sources on the net,
www.simplyhired.com, the highest paid employees in our facility would be the General Manager,
Cimbra Managers, Roasting/Blending Process Manager, Receiving Process Manager, Quality
Testers, and IT Personnel with a salary range of $51,000 to $59,000 per year. Executive Assistants -
Secretaries, Expert Roasters and Shipping Process Managers have an average salary of $46,000 per
year and are the second highest group of employees at the facility. Crane operators, security guards
and forklift drivers earn between $28-37K per year and janitors and blenders have an average salary
of$18,000. The employees would work in three 8-eight hour shifts, since we want to utilize the
equipment that we have invested in as much as possible.
Our utility costs are expected to be $8,487,932.00 based on assumptions made through a
valid web source. The number is taken from the utility costs of another facility named SLAC who
powers a two-mile accelerator to run tests. Since the SLAC facility uses a large amount of energy,
we believe that their energy use will be similar to the 24-hour energy the Starbucks facility would
use.
For many of our initial investment costs, which mostly deal with machinery, we had to
make many assumptions. We had to search the web for most of these costs and when we found the
costs for only a small-scale version of the machine we were interested in, we sometimes doubled the
costs. For other costs, such as the crane and forklift, we went off the costs that some of us learned
about from previous work experience.
Using a 20 year MACRS depreciation method, we have calculated that our facility
inventory will lose about $68,752.05 of its value at the end of the first year, and about $137,531.13
for years n=2-19, and about $68,751.28 for the end of the 20th year.
9Appendix
Figure 1 – Starbucks Process Flowchart
10Figure 2 – Activity Relationship Chart
11Figure 3 – FLAP Input Parameters
Figure 4 – FLAP Recommended Layouts
12Material Material Source Destination Frequency Material
Handling Type of Use Volume
System
Forklifts Raw Receiving/ Storage room/ Daily Medium
Material/ Storage Shipping
Pallets
Cranes Pallets Storage Storage Daily High
Pneumatic In-process Sifting, Sifting, 24/7 HIgh
Conveyors roasting, roasting,
and blending and blending
equipment equipment
Figure 5 – Material Handling System Details
13N 3.00
T 56.1
C 22
E 0.85
V 11.0
H 50
h 4
c 0.17
B 39
U 2604
N 3
V 11
W 48
N 3
l 4.0
L 189
B 39
w 4
b 0.2
r 25
Rows 6
Aisles 3
Number of Cranes 3
Number of Bays 39
Width of Storage Area 48 ft
Length of Storage Area 189 ft.
* Using equations from page 356 of Garcia book
* Unit load = Pallet (4x4x4 ft)
* Total # of Unit Loads (U) = 2604
* Storage area maximum height for stacking (H) = 50 ft.
* Crane Runout clearance (r) = 25 feet
* Crane efficiency (E) = 85%
* Cycles/Sec (C) = 22
Figure 6 – Calculations for Number of Cranes
14Figure 7 – Cost Breakdown
15Figure 8 – Net Present Value
Figure 9 – Annual Revenue
Figure 10 – Final Design Savings
16Figure 11 – Starbucks Layout Design
17Works Cited
Garcia-Diaz, Alberto, and J. MacGregor Smith. Facilities Planning and Design. Upper Saddle
River, NJ: Pearson Prentice Hall, 2008. Print.
http://agr.wa.gov/FoF/docs/LandStats.pdf
http://www.ehow.com/how-does_4883412_what-process-roasting-coffee-
beans.html#ixzz1JdJVyxY5
http://www.nevadaappeal.com/article/20030106/NEWS/301060102
http://videos.howstuffworks.com/discovery/35549-howstuffworks-show-episode-8-starbucks-roast-
video.htm
http://videos.howstuffworks.com/discovery/35555-howstuffworks-show-episode-8-inside-folgers-
plant-video.htm
http://wikimapia.org/12832114/Starbucks-Roasting-and-Distribution-Center
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