Coca-Cola Operations Management System - Essay Example

OPERATIONS MANAGEMENT SYSTEM {INSERT UNIVERSITY’S NAME} {INSERT STUDENT’S NAME} {INSERT INSTRUCTORS NAME} July 13, 2012 Table of contents Operations management system ………………………………………………………………...3 Introduction………………………………………………………………………………………3 Analysis…………………………………………………………………………………………..4 The output of Coca-Cola……………………………………………………………….....4 The Coca-Cola current operations management system………………………………....5 Existing weaknesses and problems in Coca-Cola operations management system………9 Suggested Changes Implementation and Theories Used……………………………..…10 Recommendations for operations management improvement………………………………….12 Conclusion………………………………………………………………………………………13 References ………………………………………………………………………………………14 OPERATIONS MANAGEMENT SYSTEM Introduction Coca-Cola Company is one of the largest manufacturers of beverages all over the world with bottling companies in more than 200 countries and UAE is not an exception. Presently, the company is recognized as an international company in soft with an aim of growing the existing brand in the UAE. The company owns most of the soft drinks in most vending and cooling machines in UAE. Some of the known brands include: Coca-Cola and its sub-brands which are PowerAde, Fanta, Sprite, Krest, and Dr Pepper. Today, the company is aiming at expanding its diet coke range with the goal of appealing to the ever growing market for health drinks as opposed to sugary soft drinks. Reports have revealed that the soft drink market is very competitive and Dubai bottlers have had their share of both success and failures. The diet drink was mainly sold among female consumers. According Richard (1997, p. 19) operations management is defined as the administration of various business practices with an aim of establishing the highest efficiency level within the organization. Operation management system entails converting labor and materials into services and goods as efficiently as possible with an aim of maximizing the company’s profit. This particular essay will discuss the current operation management system of Coca-Cola Company in UAE, its output in terms of business goals and the company’s operational capabilities. It will then discuss the company’s problems and weaknesses in the current management systems, what needs to be done and suggest changes for the purpose of realizing the goals of the organization. Analysis The output of Coca-Cola The management of the company is ensuring that is brings the operation management of the company in line with the international standards. Eliyahu (2004, p. 21) puts out that the Coca-Cola company ensures that it measures the package and product quality before it’s released to the market emphasizing on the materials and ingredients as well as regulating the manufacturing process, bottling as well as distribution. The regional coca-cola company in UAE does this to ensure that the product it releases to the market attains the company’s requirements as well as the expectation of the customer in the market. According to Richard (1997, p. 13) the management of the company has put in place an effective quality control systems in its operation management system. A quality management system assists in both capturing and evaluation of customer feedback and quality data on the market trends. The company’s management has further ensured that it expands its beverage portfolio in addition to the supplier base not only within UAE but also all over the Middle East region as a way of managing the quality systems. This has been done with an aim of meeting the demands of developing markets as well as increased demands all over the world. The global nature of the company demands that the company puts in place highest process and standards with an aim of ensuring consistency in quality products. This is attained through their concentrate production to their bottling processes and deliver of the product. Coca-Cola Current operation management system The Coca-Cola located in the UAE region is governed by the Coca-Cola Operating Requirement (KORE) which ensures reliability and consistency in production of quality products. KORE enables the company to be in a position to address its existing business landscape as well as support the strategic growth plan of the organization by putting in place integrated quality management system in place which holds all the management operations of the company by ensuring same production as well as distribution of the company’s beverages to customers (Eliyahu 2004, p. 42). KORE further ensures that the company produces high standard products by ensuring that there is environmental and health standards as well as occupational safety by ensuring that the company has clear policies, systems and specifications that guide all their operations. According to Eliyahu (2004, p. 29) efficient leadership is an essential component in the operation management system of a company. This is because with existence of efficient leadership throughout the company’s operations systems, KORE has ensured the integration of quality and business objectives as well as aligning them with consistent metrics with an aim of monitoring the performance as well as integrating the various preventive actions as a management process tool accompanied vigorous demands in circumstances whereby new services and products were introduced (Richard, 1997, p. 9). In order to adhere to the existing new regulations, the company best market place and practices are maintained to ensure they meet the international standards. The Coca-Cola Company further reassesses the relevance of their guidelines and requirements not only in the manufacturing sector but also in the supply chain by adapting new technologies. The company also has an established governance process, whereby every department within the company not only implements but also documents and maintains a quality and safety system in line with the requirements of the KORE. Compliance to the guidelines and requirements of the KORE is a system that is monitored system which further supports the integrity of the company’s products. However, in ensuring the quality and safety of the country’s products within the UAE has been one of the business goals which is further linked to the successful performance of the company. The company also manufactures and bottles the Coca-Cola products in the UAE region. To ensure successfully operation, the management connects with the customers as well as the consumers of their products. The company works closely with the consumers as well as the distributors to ensure that all their management operations are in line with company’s initiatives and policies. As a bottling company, the company has engaged itself in water stewardship just like other bottling companies all over the world with an aim of the company’s systems carbon print as well as improving and investing in the communities where their plant functions. In order to attain the aforementioned, the company’s management has focused on finding new solutions for the purpose of sustainability (Richard, 1997, p. 24). To ensure that the bottles are safe for the beverages, the bottles are undertaken through a vigorous process of not only washing but also rinsing. So as to ensure the company ensures international standards set by the Coca-Cola company, the bottling companies the bottle are priory cleaned using pre-rinse jets to ensure that dust or dirt is completely removed. The bottles are further soaked into high temperature liquid to clear the dirt. They are then subjected to a deep cleaning pressure spray before they are subjected to cool rinse prior to undergoing electronic inspection. The culture of the company in its operation in UAE is mission driven as well as focused on refreshing the mind, making a difference and inspiring optimism. The company has a rich history an aspect that has made it to be in a position to compile the stories of both the employees and the consumers (Eliyahu, 2004, p. 32). The stories entail real experiences of both the customers and the employees an as aspect that act as a motivational element. Moreover, the company has been focusing on changing the existing culture of the company by permitting the employees to be engaged in reforming and shaping the goals of the company. According to Stevenson (2007, p. 61) if the company focuses on providing a foundation to that motivates the employees. The company’s customers are entitled with making the products available to everyone. The customers of the company include all the people who sell the company’s products such as the street vendors, movie theaters, grocery stores and restaurants among others. Customers are essential in the operation management of the company. For instance, the company’s customers have helped the company to enjoy large market share in the region. According to Chary (1995, p. 31). customers have an important role to play in the sustainability efforts of a company’s operation management systems. For instance over the past years, the coca-cola customers based in the UAE region have assisted the company with the installation of energy-efficient equipment. The customers have further contributed to recovery and recycling efforts of the company. The chart below indicates segments of commercial beverage industry In the operational capabilities the company is regarded as market leader in all soft drinks. Additionally, it has a great world appeal. This is because the image of the product is characterized with over-romanticizing an aspect that has resulted into the client based being widened (Eliyahu, 2004, p. 32). Moreover, the bottling system as an operational system is one of the company’s greatest capabilities as it enables the company not only to maintain a local approach but also a global one. Due to the fact that the brand of the company is widely recognized, an aspect that has also impacted on its competitive position. The company has been successful in managing certain elements of the environment but poor in other areas. For instance, it ensures that its bottles are recyclable to minimize negative impact to the environment. This is a plus in its operation management system as customer has continued to be attracted to Coca-cola products as it is environmentally sensitive (Stevenson, 2007, p. 76). Existing weaknesses and problems in Coca-Cola operations management system As a result of the company’s tall organizational structure, it has experienced a number of problems. For instance, both the people and the company lacked clear set goals. Tall hierarchies have resulted into motivational problems (Stevenson, 2007, p. 45). Despite the quality of the Coca-Cola products, it has been regarded to negatively affect the teeth which have made a number of people to opt for other types of drinks such as milk. Some of the marketing strategies have failed as a result of stiff competition from emerging soft drink manufacturers such as Pepsi as well as coffee and milk manufactures (Eliyahu, 2004, p. 24) The image of the company was affected when it faced accusations from the UAE Consumer Protection Department of the Ministry of Economy for cheating its consumers by reducing the size of the Coca-Cola can but not reducing the price and failing to print the information pertaining to ingredients using Arabic language (Chary, 1995, p. 112). The company has further been faced with meeting the demands of its clients and employees. The client base which is mainly Arabic speakers has demanded that the company labels its products using Arabic language other than English. The demands of its employees have been increasing every day an aspect that has been challenging for the company. From the operations management analyzed above, it is important to point out that the company has the biggest disadvantage if they cannot handle reliance on limited number of suppliers. This is because, there is possibility of the suppliers going bankrupt or deteriorating an aspect that can negatively impact on the company (Robert, 1997, p. 18). Another element that the company should put into consideration is finding experienced employees. This is due to the fact beverage production does not need skilled labor but it is challenging for the company to find effective personnel. Hence, it is essential for the company to hire young and experience personnel to manage the company (Chary, 1995, p. 112). Additionally, on the organizational structure of the company existing organizational structure of the company does not permit coordination and information sharing among all levels of employees (Richard, 1997, p. 29). In Managing a global changing environment it is evident that the company functions in an environment that is uncertain. Increased competition from other soft drink companies both locally and internationally has resulted to immense competition over the most essential resource: customers (Lee, 2005, p. 71). Suggested Changes Implementation and Theories Used It is essential for the company to adopt a multidivisional structure in its operational management system. This is due to the fact that multidivisional structure will permit the company managers to ensure sharing of information thus eliminating divisional coordination and competition as each division seeks to have an advantage over the other (Heizer, 2008, p. 18). Moreover, there is possibility of communication problems being experienced as a result of information being distorted if it moves through tall hierarchies (Jacobs, Chase & Aquilano, 2007, p. 45). Hence, it is essential to point out that multidivisional matrix will be suitable for company. According to Johnston (2005, p. 67) multidivisional matrix increases the coordination between the divisional and corporate levels. Additionally, workers at every level work together with an aim of finding solutions to the problems that the company faces. Additionally, it is essential for the company to conduct a market research in the UAE on its products and cater its products to meet the needs and culture of its clients. According to Stevenson (2007, p. 123) communication is a key factor in operational management system of any given company. Hence, it is essential for the company to ensure that there is coordination between various departments within the organization. Additionally, there is need for the key leaders within the organization to operationalize the process by ensuring that there are a number of supplier/customer feedback and negotiations sessions. According to (Eliyahu, 2004, p. 119) the sessions assist in strengthening the relationship as well as improving the employees’ morale. For a number of employees, the aforementioned is the first step their expertise and opinions are sought in improving the daily operations of the company. Finally, the company should ensure that key employees are engaged in decision making process. This can be attained if the company enhances the usefulness of the intranet by ensuring that the communication between upper management and level of workers with an aim of communicating the goals of the company to the front line employees (Eliyahu, 2004, p. 24). Recommendations for operations management improvement In implementing the above suggested changes, it is essential for the company to involve the employees (Stevenson, 2007, p. 121). Involving the employees from the start is likely to prevent resistance an aspect that is crucial in ensuring the success of the company. Organizations such as Eastman chemical have employed such strategies (David, 2007, p. 113). Alternatively, the managers can develop a pilot project in one of the business units or departments so as to test the suggested changes before employing them in the whole organization. Alternatively, it is essential for the company to adopt training and communication as part of the management improvement project. This is due the fact that effective training and open communication will result into realization of the company’s objectives and goals. The training process should be continuous to ensure that workers. The operation management of the company should make sure that the employees coordinate with one another to ensure quality and improved sales. In line with the aforementioned it is essential for the value chain theory to be incorporated into operation management system of the company so as to establish competitive advantage. The value chain theory is essential for any organization that aims at realizing its goals and objectives. Hence primary as well as support activities need to be identified and improved into to ensure successful delivery of the services. Nonetheless, grouping of the activities is essential as they put value into the value chain or the outlook of the business. Essentially, the company has to reorient its operation management so as to obtain complaints from both clients and employees on time and address the same on time. The company should ensure that it continuous to produce high standard products so that it meets the demands of the customers and stay ahead of their competitors. Due to the fact that the company deals with production, it is important that it hires efficient and skilled labor force to ensure quality production. The six sigma quality control can be applied by the management in maximizing productivity and minimizing errors. Conclusion Quality management department, marketing department and human resource are essential in improving the operation system of the company. This is due to the fact that efficient personnel in the aforementioned departments are likely to increase the company’s productivity and meet the needs of the customers. Coca-Cola Company is a force to look after in regard to production of soft drinks. Nonetheless, the company should ensure that there is constant improvement so as to the company stays ahead of its competitors by producing quality products. Finally from the analysis above, the importance of operational management for a given company can be summarized as improving a company’s productivity, an aspect that boosts the financial system and coca-cola company is an example of the companies that have utilized efficient operations systems in realizing its goals and objectives. References Chary, S. N. 1995, Theory and Problems in Production and Operations Management, Tata McGraw Hill. David, W. 2007, Operations Management: a value chain approach, New York: Palgrave MacMillan. Eliyahu M. G., 2004, The Goal: A Process of Ongoing Improvement, North River Press. Heizer, J.H. 2008, Principles of Operations Management, 8th edition, Pearson/ Prentice Hall. Jacobs, F. R., Chase, R.B. & Aquilano N.J., 2007, Operations and Supply Management, 12th Edition, McGraw Hill International Edition, ISBN 978 007 128804 0 Johnston, R., 2005, Service Operations Management: Improving service delivery, 2nd edition, Prentice Hall, NJ. Lee J. K. 2005, Operations Management: strategy and analysis, 7th edition, Prentice Hall, NJ. Richard J. S, 1997, Operations Management: customer focused principles, 6th edition, Richard D. Irwin, Chicago. Robert, J. 1997, Cases in Operations Management, 2nd ed, Financial times Prentice Hall. Stevenson, W, J. 2007. Operations Management. 9th edition, McGraw Hill. Read More