The Supply Chain Management and Strategies in Coca-Cola

Introduction

The Coca-Cola Company is a globally recognized  market leader in the soft drink industry. The brand name and the company’s logo are familiar to most people.  The company has operations in over 200 countries. However, it experienced sluggish sales volumes in the United States despite being among the largest soda makers. The management of the company decided to change the strategies in order to improve the sales. It involved implementing some changes in the supply chain management and strategies. Coca-Cola ran several projects with the aim of improving productivity and maintaining its market share. Although the company incurred some capital expenditure, the changes in some of the operations contribute to the increase in the sales volume. This paper discusses the supply chain and the management strategies that Coca-Cola Company established.

The Company’s Strategic Plan

To begin with, the Coca-Cola Bottling Co. Consolidated, Bottling Company United, and Swire Coca-Cola USA planned to acquire 9 plants with a net worth of $380 million from Coca-Cola Refreshments (Supply chain 24/7, 2015). The company merged the four entities and Coke’s operation group in North America to form a new supply group that made decisions concerning the issues of packaging launches and ingredient purchases. The bottling operations had been sold to retailers and franchises to improve the effectiveness of their distribution (Supply chain 24/7, 2015). The company expected an increase in return on capital invested after selling the production facility due to a reduced capital base. Therefore, the shareholders enjoyed increased return as the company acquired extra cash to reinvest.

Furthermore, the company remodeled the supply chain by investing in project Jupiter. Although it involved high initial capital expenditure, it simplified distribution and warehousing network, thus improving market effectiveness when delivering to the customers (Trebilcock, 2011). The project caters for bulk distributions to large retailers. As a result, it increased the customer services levels by ensuring invoice accuracy.

The company also introduced Eastern Creek distribution center where customers’ orders are assembled and dispatched. The warehouse is subdivided into different sections for the storage of various products, such as alcoholic beverages, juices, and bottled water. The distribution center receives over 2,000 orders daily. Due to the high volumes of work, the management has divided the working session into two. The first one involves arrangement and inspection, which is done in the morning. The second session loads and prepares the cargo for delivery, which is done the next morning. The company embraces the use of technology to enhance accuracy and reduce paper work. It uses the voice recognition solutions, Datria, which is stored on the servers located in the data center (Trebilcock, 2011). The Eastern Creek DC receives the energy supply from the photovoltaic electrical system that uses solar energy. This approach is both economical and environmentally friendly because it does not contribute to the greenhouse effect. The facilities also have water conservations tanks that are well ventilated and insulated.

The Supply Chain

The Coca-Cola Company continues to be a market leader due to its simplified yet effective supply chain. The chain involves 1st and 2nd tier suppliers and 1st and 2nd tier customers. The 1st tier supplier provides raw materials, such as vanilla, cherry flavoring, water. carbon dioxide, glass, and aluminum. Raw material undergoes a processing stage in a concentration plant for syrup to be produced (Hu, 2016). Such materials as glass and aluminum are used in a packaging plant. The final product is packaged in accordance with the storage that is in the warehouse. The distributors transport the finished goods from the warehouse to vending machines and retailers, such as supermarkets and convenience stores, which are the 1st tier customers, who then finally sell the products to the 2nd tier consumer. The Coca-Cola Company focuses on ensuring the effectiveness of its supply chain. It operating framework is based on the excellence of the system of production and distribution of the products through consistent standards and processes. The company employed the unified system of automation that reduced the supply chain processes by incorporating new skills, which, in turn, helped the company to increase the speed of operation.

The Jupiter project and the Eastern Creek distribution center provide the company with the required capacity for production. The company produces enough products to meet the demand even in the busiest period of the year. The warehouses are managed by a competent personnel who has the required knowledge of IT for managing stock (Trebilcock, 2011). Therefore, the company avoided both over- and under- stocking. The distributors have customer-oriented services, which improves the relationship between the company and the clients. The Coca-Cola Company also has numerous distribution trucks to ensure that the customers receive the products in time. In addition, the company provides a safe working environment. The docks are well organized, and the employees are provided with safety equipment. The company has invested heavily in technology to maximize the employees’ effectiveness. The company is planning to expand its operation to East Africa to take advantage of the boom in rail construction (Page, 2016).

Conclusion

To conclude, the Coca-Cola Company remains at the top of the industry due to its management strategies and effective supply chain. When it experienced sluggish sales volumes in the United States, the management decided to make changes in the operation. Selling some of the bottling companies and introducing the Jupiter project and Eastern Creek distribution center were some of the implemented changes. These facilities utilize advanced technology that makes them effective and accurate. The projects simplified the company’s distribution and warehousing networks because they used modern technology and had bigger capacity. The supply chain was also simplified with the help of numerous distribution trucks and designated distribution centers, which ensures that the consumers receive the products at their convenience. Thus, the company will continue to succeed following its simplified distribution and management strategies.

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