Role of Suppliers to Coca-Cola Company - Case Study Example

The Coca-Cola Company Impact of Suppliers Whether a company is small or big, national or multinational, successful or struggling, it has a web of connections that it depends on to survive on a daily basis. This connection can either be direct or indirect depending on the function of the role played. The Coca-Cola Company is no exception; it has a web of stakeholders that ensure that the company meets its targets. Though the company has a long list of stakeholders, every one of them plays a role that is very important as the company fully depends on it. Among the list of Coca-Cola Company’s stakeholders are the suppliers. Coca-Cola is a 128 year old multinational company that has its presence in over 200 countries, and produces over 3500 products (Lim and Wong, 2014). It does not take a single hand to accomplish that amount of success within those numbers of years in all these countries that include USA, Britain, Kenya and many others. Its success depends on the several suppliers that it depends on to provide raw materials and valuable resources. . These provide the system with materials such as ingredients, packaging and machinery, as well as goods and services (The Coca-Cola Company 2014). Coca-Cola products range from soft drinks to drinking water, such as coke, Fanta, sprite, Dasani, Aquapure among others. This diversity in production calls for a long list of supply products to manufacture these include syrups and concentrates, sweeteners; juices; mineral waters; finished product; carbon dioxide; fuel; PET (plastic) preforms; glass, aluminum, and plastic bottles; aluminum and steel cans; pouches; closures; post-mix (fountain syrup) packaging; and other packaging materials (Wikinvest 2014). The supply chain of Coca-Cola Company involves all the companies that come into contact with the company’s products. This includes every company involved in making parts for the product, putting it together, delivering and finally selling. In other words it involves the suppliers, Manufacturers and retailers (Investopedia 2014). Due to the fact that the whole process begins with the supplier, the whole process cannot stand without the suppliers. This makes them a very key element. Role of suppliers To understand the impact of suppliers to the Coca-Cola Company, their roles must be laid out clearly. One of the roles of the suppliers is acquisition. They provide the company with equipment, spare parts and raw materials. This enables the company to service and repair machinery, and produce end products. During the process of acquisition, they keep in contact with clients to make sure that delivery is done on time (Coca-Cola 2014). They also make sure raw materials are at the right price as to control the price of the end product. Their other role is in regards to product quality, they work to towards ensuring good quality of products used during company’s operation. In this process they handle complaints from clients in regards to substandard goods, as they also supply materials in line with the company’s quality requirements. Suppliers also provide just in time products that allows the company to order specific goods for immediate production as opposed to overstocking the company’s shelves with goods that might not be used for sometime (Hickman 2014). Recent Activities by Coca-Cola The joint venture between Coca-Cola and UK Department for International Development (DFID 2014) is aimed at boosting economic and educational opportunities for over 10,000 girls and young women in Nigeria. For the initiative dubbed Educating Nigerian Girls in New Enterprises in short ENGINE Coca-Cola together with the DFID will invest ₤1 million. This comes as part of UKs Girls Education Challenge and 5by20 initiative from Coca-Cola; both of which are geared towards empowering 5 million female entrepreneurs all over the world by 2020. Project ENGINE is expected to start 170 spaces for learning for girls and young women ages between 16 to 19 as they will meet for academic purposes and sessions for training over a period of nine months. An estimated 5, 400 girls are who are still in school are expected to receive tutoring session and training to equip them with entrepreneurial skills, after school. For young women out of school, about 12,600 there will be given vocational training focused on business and employment readiness. For the young women who manage to complete the programme, there will be a variety of employment opportunities to choose from, that includes being assisted to start up their business as a small retailer of Coca-Cola Company and d. light products. The project implementation is set to be managed by the global humanitarian agency Mercy Corps and supported by Nike Foundation, solar social enterprise d.light alongside other partners. As stated by Adeola Adetunji, Managing Director, Coca-Cola Nigeria Limited, Coca-Cola believes that the strength of the business and its sustainability depends upon the strength of the community in which it exists (JIGA 2014). Investing in women’s education is just one way of fostering sustainable growth and spurring economic sustainability. The partnership is seen as a proof that most of the world’s challenges can be addressed when governments, businesses and civil society come together to work towards a sustainable growth. Neal Keny-Guyer, Chief Executive Officer, Mercy Corps also said, ENGINE alongside other similar programs build what is known as shared value. Simply put the community and businesses come together to work towards achieving what neither could achieve on their own. The project does not only deal with the girls and the young women but also their families, leaders of communities where they come from and schools, as it creates role models to be an inspiration to young girls wherever life would lead them. According to Justine Greening, the UK International Development Secretary, research has it that educated girls have healthier children and invest 90% of their income in family and community. Through capitalizing on Coca-Cola’s business expertise along with other companies, young girls get to realize their potential as they work towards a better future for their communities, families and themselves. Through the Strategic partnership window, the Coca-Cola company has received funding awards for having the best pilot project that supports educational success for girls and young women in terms of innovation, effectiveness and evaluation. This partnership is the first of its kind between DFID and the private sector that brings DFID alongside global business working together towards educating girls and young women (GOV.UK 2014). According to Coca-Cola Company in the first quarter of the year the sales of carbonated water drink went down by 1%. What majorly contributed to this fall was the fall in sales in Great Britain as it recorded a fall of 10%. On a general note, sales of soft drinks from Coca-Cola rose by 2%. The deficit was covered by sales of non-carbonic soft drinks such as powerade. Fizzy products account for 75% of sales outside the United States. The bottle size in UK shrunk yet the price was stagnant. Manufacturers in UK and other places have experienced great pressure from doctors as they claim there is a connection between the soft drinks that have high sugar content and obesity. Throughout Europe the company experienced decline in sales of its soft drinks by 5%. The market for still drinks such as juices, ready-to-drink teas, sports drinks and energy drinks is on the rise. In its attempt to boost demand, Coca-Cola is to expand its global market budget this year by adding an extra $4 million that will see its current budget go to over $4 billion. This will be a 10% increase. During the first quarter of this year, the net profit fell by $1.63bn from $ 1.77bn same time last year. Despite this decline, the sales were higher than expectations of the market making the company’s shares go up by 4% in New York. In a statement by Coca-Cola Company’s chief executive Muhtar Kent, the company is gaining momentum in growth in line with its expectation as it is gaining value share and global volume in non alcoholic beverages that are ready to drink (BBC& Team2014). A teenager in Mississippi has scored a healthy victory against giant soft drink makers Coca-Cola and Pepsi. This is after she had bumped into a dangerous chemical in soft drinks from both companies. Brominated vegetable oil is used in soft drinks to make sure the flavour does not separate and to give the drink a nice fruity flavour. This chemical is also used as a flame retardant and people who consume it risk having nervous disorders. With this discovery she started an online petition on change.org warning people against the substance. She petitioned the executives at Pepsi to change their ingredients. This campaign gathered 200,000 signatures. A month later Pepsi announced that it would change brominated vegetable oil with sucrose acetate isobutyrate as this is used in other parts of the world. After Pepsi had removed the substance, she started another petition asking Coca-Cola Company to replace the chemical. Later on Coca-Cola would announce that it would replace brominated vegetable oil sucrose acetate isobutyrate or glycerol ester of rosin, a substance found in chewing gum. With this double success she is charged up to go for another petition in case she fined another life risking substance. Though Pepsi and Coca-Cola have said their changes had nothing to do with her campaigns; Pepsi claimed they had planned the change before the campaign while Coca-Cola said the change was for the purpose of consistency for their products around the world (BBC and Choi 2014). The way people drink Coca-Cola products may someday change as the bottle containing this soft drink is set to change. This is as results of the technological efforts by a Montgomery County industrial biotechnology company. The company by the name Renmatix Inc. of King of Prussia has managed to come up with a way that is patented and innovatory to turn trash that is none recyclable into sugar from which bio based alternatives of petroleum products can be made.The technology by Renmatex is being texted by a Wisconsin biofuel and biochemical company Virent. Virent has partnered with Coca cola Company in this process. According to Mike Hamilton, 30% of Coca-Cola Company’s bottles are made from plants, but Coca-Cola wants it to be 100%. As stated by Hamilton, the simplest way of understanding this procedure is like when turning wood pulp into paper. Through use of water, heat and pressure, plant cellulose is turned into plantosugar (as called by the company).Plantosugar is used as an alternative to the conventional building blocks found in fossil fuel based products such as paints, diapers, laundry detergent, beverage bottles among other plastic items (George 2014). Coca-Cola alongside Singapore’s Kindness Movement which is a non-profit making organization came to the decision of providing a show of an appreciation to the people of Singapore who are far away from their family and friends yet building the country. In collaboration with agency Ogilvy & Mather Singapore, coke made deliveries using a drone. Photos with handwritten notes were collected from other Singaporeans, which were attached to cans as they were delivered by drones to construction workers some of whom were up to 35th floor of the buildings in construction. According to chief creative officer of Ogilvy & Mather Asia Pacific, Eugene Cheong, part of the reason for the act was to use a technology that is usually linked to war and violence in a positive way. This did not just make a desperate part of the society happy, but it also created an important link between two separate parts of the society (Beer 2014). Conclusion Suppliers in every company are important, and Coca Cola is no exception. Suppliers provide the company with raw materials, machinery, and spare parts that the company needs. They also maintain quality of good supplied and helps the company keep client’s records. In an initiative dubbed ENGINE, Coca-Cola has partnered with DFID to promote education among girls and young women marginalized in Nigeria. This is a program that is set to empower the young ladies with entrepreneurial and academic skills. The company has also realized a 2% increase in demand of its soft drinks across the globe despite an overall loss of 10% in UK. The company has also come to a conclusion of dropping the controversial substance found in its soft drinks; this is after a petition that urged the company to drop the substance. Environmentally speaking, the company is out to replace its plastic bottles with those made from plant remains. This is seen in projects in which it is collaborating with other biotechnological companies such as Renmatix Inc. and Virent. The companies big heart was recently demonstrated when it delivered refreshments to construction migrant workers in Singapore. Most amazing is that the delivery was done using a drone. Though the company may be facing certain challenges in countries such as UK, with these projects listed and others, the company is in the right direction. Reference Beer J 7 May 2014 Fast company create, coke uses drones to deliver refreshments to Singapore migrant workers, The brand makes a special air delivery to more than 2,000 construction workers. 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The Cocacola Company and the UK Government Strengthen Girl’s Education and Economic Opportunities in Nigeria. Available at http://article.wn.com/view/2014/03/07/The_CocaCola_company_and_the_UK_government_strengthen_girls_/(16/5/2014) George J. 12 May 2014,Health care Inc. Montco firm out to make Coca-Cola bottles more eco-friendly,http://www.bizjournals.com/philadelphia/blog/health-care/2014/05/montco-firm-out-to-make-coca-cola-bottles-more-eco.html?page=2[13/5/2014] GOV.UK, 7 march 2014,Press release, The Coca-Cola company and the UK government strengthen girls’ education and economic opportunities in Nigeria, Coca-Cola and DFID to invest £7 million in an initiative to help 10,000 marginalized girls in Nigeria,https://www.gov.uk/government/news/the-coca-cola-company-and-the-uk-government-strengthen-girls-education-and-economic-opportunities-in-nigeria[13/5/2014] Hicman M. 2014, Ehow: Job Function of a Supplier to an Operations Managerhttp://www.ehow.com/info_8524403_job-function-supplier-operations-manager.html#ixzz31WdxX9T0[13/5/2014] Investopedia, 2014,supply chains, Definition of supply chains,http://www.investopedia.com/terms/s/supplychain.asp[13/5/2014] JIGA (2014). British Government and Coca-Cola Team Up To Rach 10,000 Marginalized Girls In Nigeria. Available at http://www.jiga.pt/british-government-and-coca-cola-team-up-to-reach-10000-marginalized-girls-in-nigeria [16 May 2014] Lim, J. and Wong, E. (2014) Cocacola Collectors from Malaysia Visit Atlanta. Available at : http://www.coca-colacompany.com/history/coca-cola-collectors-from-malaysia-visit-atlanta [16 May 2014] Team T. 5 May 2014,Forbes, Energy Drinks Could Be The Growth Driver For Coca-Cola In The Domestic Market, http://www.forbes.com/sites/greatspeculations/2014/05/08/energy-drinks-could-be-the-growth-driver-for-coca-cola-in-the-domestic-market/ Wikinvest (2014) Coca-Cola Enterproses (CCE). Available at: http://www.wikinvest.com/stock/Coca-Cola_Enterprises_(CCE)/Raw_Materials [16 May 2014] Read More