Operations Management and Supply Network - Essay Example

The performance of a supply network depends on its ability to satisfy the needs of the potential customers who constitute the end-users of the products and services. The supply network should be designed in a way that must lead to the effective and efficient achievement of the targeted goal of customer satisfaction.

The use of effective supply chain management has facilitated the achievements of Coca-cola HBC (CCHBC, a globally renowned producer of non-alcoholic beverages in Europe). The company’s four strategies – availability, affordability, acceptability, and activation – provide manufacturing flexibility that allows the broadening of the product portfolio while pursuing the most cost-effective route to market for order taking and delivery to customers.

            Information technology is one of the key drivers to efficient supply chain management. In 2005, the CCHBC invested heavily in technology applications by introducing a single largest and the most successful roll-out of SAP-based Advanced Planning Optimizer (APO). This has enabled CCHBC to optimize and coordinate operations within its whole network and across borders by consolidating the best practices on a single, standard enterprise platform. This platform facilitates the alignment of supply chain and demand planning, which is effective for efficient sales and operation planning. Information technology has led to the creation of cost-saving opportunities and leadership in the field of fast-selling goods.

CCHBC can bring about integration in the supply chain by outsourcing some of its operations internally and externally. Internally, the company can outsource goods or services within its supply network. The company should be keen on the decision of which goods or services it seeks to outsource for effective integration. In the process of business outsourcing, the company should seek to regulate the period of outsourcing because this can lead to the loss of in-house expertise. Externally, the company can seek to outsource globally. Most organizations seek this kind of business outsourcing because of the low costs and skills available internationally. Global outsourcing enables the purchasers to tap into technological expertise that may not be available in their native countries. It also creates a global process network amongst its suppliers, which, in turn, creates a pool of promising synergies to increase their flexibility and enhance, in the long run, the creation of new goods and services (David 131).

The CCHBC has a mutually beneficial relationship with its suppliers; due to this, the suppliers deliver goods and services of the best value in terms of quality, service, cost, and innovations. The CCHBC has to collaborate with its suppliers, and, therefore, even as the cost of production rises, they agree on the strategies to deliver the goods and services to customers at a low price. The close relationship of the suppliers to CCHBC has helped to improve the effectiveness in supply chain management since it enables the presentation of the increased product range to the consumers. The CCHBC requires its suppliers to follow strict standards for business ethics, labor practices, human rights, and the management of the environment. These requirements are set out by CCHBC in its guiding principles for suppliers, which is an essential part of a contract signed between the company and the suppliers (David 231).