Supply Chain Management of Coca-Cola Company - Case Study Example

Business Ethics Author’s Name Institutional Affiliation Tutor Date Introduction Supply chain management refers to the management which is concerned with businesses that are interconnected. These businesses provide services or products which customers at the end of such a supply chain require. There are a number of activities that are involved in supply chain management. It involves the way raw materials required by a company are stored. Another activity involved in supply chain management is inventory of the work in progress. Finally, the finished goods are required to be moved from the place where they have been manufactured to the point of consumption (Cohen & Roussel, 2005). Supply chain management could also refer to the process of making designs, coming up with proper plans, carrying out the plans and monitoring such plans. The aim of performing such activities is to gain advantage or become competitive. Supply chain management also enables companies gain leverage due to proper logistics and also supplying the right quality and quantity of goods since demand is matched with supply (Cohen & Roussel, 2005). There are a number of areas which are central to supply chain management. The areas which are relevant to supply chain management include logistics, procurement, and management and information technology (Copacino, 1997). This essay looks at the supply chain management of Coca Cola Company. Reasons for the choice of Coca Cola There are a number of reasons that have informed the choice of Coca Cola as the case study. There are fewer products that have reached so many people in the world as much as Coca Cola. It is a drink of choice for many people in the world. It is an extremely difficult task to ensure that the many products produced by the company are able to reach the far flung regions in the world with ease even where access is very difficult due to geographical barriers and remoteness of such places (Kemp, 2002). Coca Cola also happens to be one of the most profitable companies in the world and has managed to maintain the top position in the beverages market for a very long time (Mentzer, 2001). It is therefore of interest to many people to get to understand the secret behind such unprecedented success. Everything boils down to planning and proper planning is central to the success of any venture. It is therefore important that lessons on success are taken from the most successful of companies. Discussion Coca Cola is a beverage company. The company is involved in manufacturing, marketing and also retailing beverages which do not contain alcohol in addition to syrups. The headquarters of the company, an American multinational are in Atlanta, Georgia. The most popular product from the company is Coca Cola (Pendergrast, 2004). The chief brand of the company is an invention of John Stith Pemberton who was a pharmacist. The formula of the famous beverage was subsequently purchased and the company incorporated in the year 1892. In addition to the popular beverage which bears the name Coca Cola there are other products which are in excess of 500. The country is involved in business in excess of 300 countries (Bell, 2004). It is estimated that close to two billion units of products are served by the company each that passes. The complexity of the operations conducted by the soft drink company means that proper planning is very important. The company has attempted to solve the logistical nightmare of distributing its products throughout the world. The company has made the use of the franchise system to ensure that its products reach as many people as possible across the world. The parent company produces a syrup concentrate (Bodden, 2009). The concentrate so made is then bought by companies involved in bottling. These companies have territories where they serve exclusively. The essay critically looks at the supply chain management of the Coca Cola Company which ensures that its operations run smoothly and return profitability. Coca Cola ranks first among the brands that are most powerful in the world. The company has been the most dominant in the market for soft drinks for more than one century. The achievements by the company have not been through an accident. It is due to visionary leadership and a framework of operation which has its basis as excellence (Boyson, Harrington & Corsi, 2004). This spirit of excellence is to be seen an exclusive bottler which is based in Western Europe. The goal for the company is that it should be position two at worst in whatever category it is involved in. There are, however, challenges that the company continues to face and which are not unique to it. Other companies in the manufacturing business are also experience the logistical problem. The company sought to replace its systems with platforms which are modern and ensure that processes involved in its production are streamlined (Copacino, 1997). Coca Cola in Europe ranks among the largest marketer. It is also among the global leader in not only producing and distributing the products of the company (Boyson, Harrington & Corsi, 2004). The concentrate is purchased from the parent company. The concentrate purchased is combined with some more ingredients and in this way, the company is able to come up with beverages that are preferred by very many people in the countries in Western Europe. The executives have come to the conclusion that there should be uniformity in its Information Technology programs across the business units under its wings and this would ensure that it is able to cover more ground in Europe (Frazelle, 2002). The Coca Cola Company established some guiding principles which were to be implemented. The company places its focus on metrics which do not require intervention. The company also sought to ensure that metrics were put in place which would ensure that profit levels maintained consistency and measurements were consistent throughout the chain of supply (Boyson, Harrington & Corsi, 2004). The company also decided to focus on standards that were not specific only to the company itself. The company also decided to focus on a system that was robust through which hierarchies of reporting were easier following changes in business. The SAP Business Objects Supply Performance Management were in alignment with the principles which guided the project. The system makes it possible for customization of metrics. The system, known as SAP NetWeaver Business Warehouse is able to capture details which are important in business transactions (Boyson, Harrington & Corsi, 2004). It becomes possible to analyze data with immediate effect. This enables the system to keep track of changes even when changes are introduced. The Coca Cola branch in Europe made a decision to come up and introduce a supply management solution which would cover the 17 plants that it owns in Europe (Slone, Dittmann & Mentzer, 2010). The purpose of introducing a new system would be to ensure that many systems were replaced and automated. This would ensure that supply chain processes would be improved and there would be the required new skills and this was to be done as soon as was practicable (Pandergrast, 2004). Partnership was also important for the Coke's branch in Europe to achieve transformation in its business. It would be achieved by ensuring that the proper technology was applied. In addition to this, users would have to be trained on how to use the new systems so as to ensure that benefits were fully realized (Frazell, 2002). The company to be chosen for the project was one that had a strong background in consultancy. The new project was to be known as Genesys. The new application would be utilized in manufacturing, processing, procurement, human resources as well as other processes which were related. There was need to have a tried and test company and thus the company would get quality for its money. The Genesys program is SAP Enterprise Resource Planning which is integrated. That system was to replace processes such as that of "requisition to payment". Another feature of the Genesys system was to allow the time within which various processes would be made as productive as possible. Bringing in the new system would ensure that the business would be more visible to people. It would also be better in making the decision of the company regarding the direction that the company would take. Such decisions would ensure that the company would replenish itself (Boyson, Harrington & Corsi, 2004). The company would therefore become a company involved in supply chain. It would also be one which dealt with customer services as well as sales. The strategy would be to ensure that all the manufacturing plants are integrated. The company would also make sure that restocking the retail outlets was done in a more coordinated manner. The aim is to have the two sides of the soft drink's business so that they are able to be managed together. This would ensure that restocking and manufacturing were coordinating thus making sure that there were some sanity in the whole chain of doing things (Frazell, 2002). The project to make improvements in Coca Cola was started in Atlanta, Georgia and was to be rolled out at a later date. The system was meant to come up with a solution that would be different since understanding of various measurements and issue of management would ensure that the best decisions were put in place. There were three phases in coming up with the system. The first was known as proof of concept (Slone, Dittmann & Mentzer, 2010). The purpose of this was to ensure that flexibility, functionality and scalability were to be found in the business environment of the company. The other phase was known as the foundation phase. This was meant to come up with a foundation that was robust so that the right measurements would be taken and that reporting would be done properly in addition to ensuring proper implementation of the proposed plans. The third phase was the exploitation phase. This phase was calculated to ensure that measures in the long term would be got and their figures would be adjusted as time went by. ITC Infotech is the company which started the implementation of SAP Business Objects Supply Chain Performance Management (Wisner, Tan & Leong, 2011). The company made use of about a dozen experts for the purpose of implementation. The main focus would be warehouse of the business, supply chain, delivery, and enterprise portal and customer service. The scores of the performance would be availed to the personnel in real time. User of the system would be in a position to come up with individualized reports which took into account the priorities of such users.Since the company has supply chains which have a global reach and also very complex, it is important that companies should be able to have insight which would enable action to be take. It would also be necessary that improvements were made of a continuous basis (Wisner, Tan & Leong, 2011). The aim of this was to ensure that root-cause and performance were viewed in an end to end way. Ensuring that the supply chain strategy is aligned with objectives of the company. This would ensure that time and money is saved in the process of making decisions which affect the companies. The company plans to ensure that all the operations globally have adopted a system which will ensure that the overall strategy and decision of strategic importance can be determined in real time. Research into the supply chain management of the Coca Cola Company has shown that the company has made very many positive strides. The global chain of the company is made up of a network which is extremely complex. This is a network of bottlers, plants, warehouses and also customers. There are also many products lines and they exhibit different aims. It becomes challenges to get have information on real time and also disseminate information (Shah, 2009). Coca Cola makes use of a number of companies so that it becomes more visible. SAP Consulting and ITC InfoTech are some of the companies that companies that Coca Cola has made use of. The aim of decision making and supply chain is to make winning strategies due to the speed through which information is passed on and analyzed (Bell, 2004). It had been difficult to get information which was truthful from all the plants that made its products. This meant that it was difficult to compare the data from various quarters since it was not possible get information which was reliable. The company had not introduced uniformity in the format in which business ventures were reporting. It became difficult to deal with information which was not prepared using any particular criteria. Due to lack a single set of rules in different part of the company, the metrics that were taken were did not provide sufficient information for the company to make the right decision. There were cases where key performance indicators which were comparable were used; there were things which were filled in different (Bell, 2004). The company received different figures for fill rate and stock out. The company continued having challenges on information which was proper for the routes and the markets for its products. This was despite the fact that the company has introduced system known as Advanced Planning & Optimization. Due to these challenges, the company went further and it decided to have SAP as part of its supply chain management. The program has been introduced and this has been a positive development for the company. It is possible for the company to be effective in aligning its business goals and its supply chain goals. This system is important as it ensure that end to end processes of the supply chain are transparent and the whole process goes on smoothly (Shah, 2009). Conclusion Supply chain management is a very critical area for any business. It ensures that objectives of a business are met. The company that has been examined is Coca Cola. It has taken plans which are changed consistently to ensure that the company remains relevant and surprise most of its competitors. This means that the right people and systems have to be put in place so that the major goals of the global giant can be reached. The company has not left anything to chance. The system it has achieved in distribution of its products is not only effective but it is improved before becoming obsolete. Information is power. Any company that is able to access information and make use of such information most effectively is able to keep at least one step ahead of its competitors. Coca Cola is a company that can serve as an example which can be emulated by many other companies that seek to leave a mark in their areas of operation. It therefore behoves any managers to take very seriously the issue of supply chain management as this would mean the difference between success and failure. References: Bell, L. (2004). The story of Coca-Cola. North Mankato, Minn: A+ Bodden, V. (2009). The story of Coca-Cola. Mankato, MN: Creative Education. Boyson, S., Harrington, L. H., & Corsi, T. M. (2004). In real time: Managing the new supply chain. Westport: Praeger. Cohen, S., & Roussel, J. (2005). Strategic supply chain management: The five disciplines for top performance. New York: McGraw-Hill. Copacino, W. C. (1997). Supply chain management: The basics and beyond. Boca Raton, Fla.: CRC Press. Frazelle, E. (2002). Supply chain strategy: The logistics of supply chain management. New York: McGraw-Hill. Kemp, K. W. (2002). God's capitalist: Asa Candler of Coca-Cola. Macon, Ga: Mercer. Mentzer, J. T. (2001). Supply chain management. Thousand Oaks, Calif.: Sage Publ. Pendergrast, M. (2004). For God, country and Coca-Cola: The definitive history of the great American soft drink and the company that makes it. New York: Basic Books. Shah, J. (2009). Supply chain management: Text and cases. Upper Saddle River, N.J: Pearson Education. Slone, R. E., Dittmann, J. P., & Mentzer, J. T. (2010). The new supply chain agenda: The five steps that drive real value. Boston, Mass: Harvard Business Press. Wisner, J. D., Tan, K.-C., & Leong, G. K. (2011). Principles of supply chain management: A balanced approach. Mason, OH: South-Western. Read More