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MMS 2nd year

Sem - III

DISTRIBUTION AND SUPPLY CHAINMANAGEMENT

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Project Done By:

Utkarsh Arya

Girish choure

Jyoti sansi

Sophia shaikh

Sumit gupta

Sanjiv mishra

Nilesh pawar

Manishchandra sharma

Submitted to:

Prof. Aakansha mamDISTRIBUTION AND SUPPLY CHAINMANAGEMENT

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Supply ChainManagement of

Coca- Cola


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Introduction

Coca-Cola Company is the world's largest nonalcoholic beveragecompany.

It offers a portfolio of world class quality sparkling and stillbeverages, starting with Coca-Cola and extending through over 400soft drinks, juices, teas, coffees, waters, sports and energy drinks thatrefresh, hydrate, nourish, relax and energize.

Coca-Cola has more than 400 brands are nearly 2,400 beverageproducts. Four of the world's top-five soft-drink brands are : Coca-Cola, Diet Coke, Sprite and Fanta. Thums Up and Limca, whichare formulated to appeal to local cultures and lifestyles.

With operations in more than 200 countries, with a diverse workforceof approximately 55,000 Company employees.


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Why Coca Cola? Coca cola is the worlds largest non alcoholic

beverage company. With a plethora of brandsunder its portfolio and its global supply chain beinga vastly complex network of plants, bottlers,

warehouses and customers, along with multipleproduct lines following multiple supply chains withdiffering objectives, it necessitates the examinationof its supply chain that is operable in countries

worldwide with such astounding success.


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VALUES LEADERSHIP: The courage to shape a better future

PASSION: Committed in heart and mind

INTEGRITY: Be real

ACCOUNTABILITY:If it is to be, its up to me

COLLABORATION: Leverage collective genius

INNOVATION: Seek, imagine, create, delight

QUALITY: What we do, we do well


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MISSION

To Refresh the World... In body, mind, and spirit

To Inspire Moments of Optimism... Through ourbrands and our actions

To Create Value and Make a Difference...

Everywhere we engage.


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VISION PROFIT: Maximizing return to shareowners while being mindful

of our overall responsibilities.

PEOPLE: Being a great place to work where people areinspired to be the best they can be.

PORTFOLIO: Bringing to the world a portfolio of beveragebrands that anticipate and satisfy peoples Desires and needs.

PARTNERS: Nurturing a winning network of partners and

building mutual loyalty.

PLANET: Being a responsible global citizen that makes adifference.


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OrganizationalStructure(Global)

CEO

President

BottlingInvest/SupplyChain

CFO President

Strategy

President General

Counsel

Director

HumanResource

s

Director

PublicAffairs/

Commun-cation

Presidentof

AfricanGroup

PresidentEuropean

UnionMarket

Presidentof

EurasiaGroup

PresidentLatin

AmericaGroup

Presidentof Pacific

Group


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In India..Chief Executive Officer

Vice President Supply Chain

Chief Finance Officer

Human Resource Director

Vice President BSG

Regional Vice President (North)

Regional Vice President (Central)


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Coca-Cola System - Production

The Coca-Cola Company only produces a syrup concentrate, which it sells tovarious bottlers throughout the world who hold Coca-Cola franchises for oneor more geographical areas.

The bottlers produce the final drink by mixing the syrup with filtered waterand sugar (or artificial sweeteners)and then carbonate it before filling it intocans and bottles.

The bottlers then sell and distribute to retail stores, vending machines,restaurants and food service distributors

The Company's business is focused on creating and marketing brands andtrademarks, while Coca-Cola bottling companies produce and package thefinished beverage products and then sell and distribute them to retail andwholesale customers.

These bottling partners range from international and publicly tradedbusinesses to small, family-owned operations. Their governance andmanagement structures are separate from those of The Coca-Cola Company.


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Thecompanys bottling relationshipscan be divided into three types:

1. Bottlers in which coca cola company have invested and have a non-controlling ownership interest;

2. Independently owned bottlers in which the company have no ownership

interest;

3. Bottlers in which the company has invested and has a controllingownership interest.


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Energy Drinks

Juices/Juice Drinks

Soft Drinks

Sports Drinks

Tea and Coffee

Water

Other Drinks


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Product listing in India Coca-Cola Diet Coke Thums Up Sprite Fanta Limca Maaza Minute Maid Pulpy Orange Minute Maid Nimbu Fresh Burn

Kinley Water Kinley Soda Schweppes GEORGIA Gold


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Value Chain To better understand the activities through which a

firm develops a competitive advantage andcreates shareholder value, it is useful to separatethe business system into a series of value-generating

activities referred to as the value chain.


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Generic Value ChainAnalysis


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SUPPLIER COSTS PRODUCTIONS COSTS

DISTRIBUTION COSTS

Raw Materials

Fuel

Energy

Transportation

Truck Drivers

Truck Maintenance

Component Parts

Inspection

Storing

Warehouse

Inventory system

Receiving

Plant Layout

Maintenance

Plant LocationComputer

R&D

Cost AccountingLoading

Shipping

BudgetingPersonnel

Internet

Trucking

Railroads

FuelMaintenanceDISTRIBUTION AND SUPPLY CHAINMANAGEMENT

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SALES & MARKETING COSTSSalespersons

Website

Internet

Publicity

PromotionAdvertising

Transportation

Food and Lodging

Postage

Phone

Internet

Warranty

CUSTOMER SERVICE COSTS

MANAGEMENT COSTS

Human Resources

Administration

Employee Benefits

Labor RelationsManagers

Employees

Finance and Legal


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COCA- COLA SWOT ANALYSIS

STRENGTHSWEAKNESSES

Strong brand nameGreat distribution network

Coke Brands Enjoy a High-

Profile Global Presence

Broad-based bottling

strategy

47% of global volume sales

in carbonates

Carbonates market is indecline

low export levelsThe existing distribution

system is not so efficient

for non carbonates

OPPORTUNITIES

Expansion

Reaching allsegments

Catering to Health Consciousness

of People

Increased Consumer Concerns

with Regard to Drinking Water

THREATS

Health Drinks

Fruit JuiceCompanies

Competition-Pepsi

Tax and regulatory sector


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The five forces model of Porter is

and outside-in business uni t strategytool that is used to make an

analysis of the attractiveness

(value) of an industry structure.

Allows the development of a

competitive strategy

Suggests 5 main forces may be

decisive in helping shape the

outcome:

Suppliers

New entrants

Substitutes

Buyers

Rivalry (Industrial

competitors)

PORTERS FIVE FORCE MODEL


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Coca-Cola : Porters Five Forces

RIVALRY

Coca-Cola

Pepsi

SUBSTITUTES

Teas

Milk

Coffee

Juice

Alcoholic drinks

Bottled waterEnergetic drinks

Other refreshments

BARRIERS TO ENTRY

(Penetrating the soft drink industry is hard because ofthe established name of Coca-Cola)

Exclusive TerritoriesSubstantial Investment

Current Market Presence of Coca-Cola.Coca-Cola has long-term relationships with theirretailers and distributors making possible the defense ofthe position by means of discounts and other tactics,and regulation make it impossible for new bottlers toenter areas where an existing bottler operates.


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Coca-Cola : Porters Five Forces (Cont.)

Bargaining power of suppliers islow due to two reasons.First, the main inputs are sugarand packaging. Sources of sugar areon the open market whichsubsequently makes the creation

power of suppliers at low levels.There are several suppliers forpackaging as well as the abundancein supply of inexpensive aluminum.Second, direct negotiations fromconcentrate producers to suppliersare present; an initiative to

encourage reliable supply, fasterdelivery and lower prices.

SUPPLIERS BUYERS

Depends on the channel used. For Coca-Cola,there are six core channels such as:

Super MarketsConvenience StoresMass Merchandisersvending machineRestaurants and Food stores

Bargaining power of buyer is high forsupermarkets and mass merchandising becauseof the low profitability and strong negotiationpower of retail channels but for vendingbargaining power is non-existing caused by

high profitability.


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COCA- COLA SUPPLY CHAIN NETWORK

Think local, act local


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COCA- COLA SUPPLY CHAIN DIAGRAM


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COCA- COLA NETWORK IN INDIA

COBO

FOBO

CONTRACT PACKAGING

Coca-Cola made its re-entry

into India through its 100%owned subsidiary, HCCBPL.

Coca-Cola is made up of 60manufacturing locations, 27

Company Owned BottlingOperations (COBO), 17Franchisee Owned BottlingOperations (FOBO) and anetwork of 29 Contract Packers.

It also has a supportingdistribution network consistingof 700,000 retail outlets and8000 distributors


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MANUFACTURING UNIT OF HCCBPL

Manufacturing

Plant, Bidadi

Sales and

Distribution

Operations

Distributors

Outlets

Outlets

CHAIN FOLLOWED FROM MANUFACTURE TO DISTRIBUTION

Largest plant and only

bottling operationsowned by the company.It caters to the whole ofSouth Karnatakathrough a network ofmore than 80

distributorsThere are three depotsin Bangalore; NorthDepot, East Depot andMega Depot.


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DISTRIBUTION NETWORK

PRODUCTION PLANTWAREHOUSE

DEPOTWAREHOUSE

DISTRIBUTIONWAREHOUSE

RETAIL STOCKCONSUMER


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DISTRIBUTION ROUTES

Key Accounts:

Examples:Clubs, fine dinerestaurants, hotels, Corporate housesetc.

Future Consumption: Examples:Departmental stores, Super markets

etc.Immediate Consumption:Examples: Small sized bars andrestaurants, educational institutionsetc.

General:Under this route, all the

outlets that come in a particular areaor an area along with its neighboringareas are catered to. Theconsumption period is not taken intoconsideration in this particular route


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DISTRIBUTION SYSTEMS

Direct distribution: In direct distribution,the bottling unit or the bottler partner hasdirect control over the activities of sales,delivery, and merchandising and localaccount management at the store level.Indirect distribution: In indirect

distribution, an organization which is notpart of the Coca-Cola system has controlon one or more of the distribution elements(Sales, delivery, merchandising and local

account management)


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DISTRIBUTION SYSTEMS (contd.)

Merchandising: Merchandising meanscommunication with the consumer at thepoint of purchase to convey productbenefit, value and Quality. Sales peopleand delivery personnel both have thisresponsibility. In certain locations special

teams who go into business locations tospecifically merchandise our products.


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DISTRIBUTION STRATEGY

RIGHT EXECUTION DAILY

Hindustan coca cola Beverages Pvt. Ltd. India divisionUnder Eurasia Operating Group has been applyingRED i.e. Right Execution Daily Since FEB 2006.Coca cola company believes that its success dependson their ability to connect with consumer and also on

their ability of their workforce to meet consumer needsdaily.

Outlet Activation According to RED (Right Executiondaily)

It means to maintain the vision according to a fix set ofcoke product which is known as COLOJ-K, it means theset will follow a particular brand order.

For example-Thums-Up will take first place after Spriteor Limca , Fanta, Maaza.


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DISTRIBUTION STRATEGY (Contd.)

Activation - Activation means doing things in and aroundthe coke outlet that triggers consumption / Purchase ofCoca-Cola Products.

The important parts of activation are:Placement of visicooler at Hot spot location and

availability of the products.Right location of display racersImpactful Communication of price message

To measure the impact of Right Execution Daily (RED) asurvey is done by A.C. Nielsen (a consultant) every month.

A.C. Nielsen conducts a survey by visiting all the REDactivated outlets and benchmarks it on the prescribedMerchandising standards of RED. A monthly reportis send to Hindustan Coca- Cola Beverages PrivateLimited.This report is called RED Report.


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DISTRIBUTION STRATEGY (Contd.)To create the Red Report A.C. Nielsen asks a set of

question from the retailers which are asfollows:

Related to Visicooler: Is Cooler in the Hot Spot Location? Does it have all the products of Coca-Cola available?

Is the display of the Coca-Cola display of the products ina standard such as sprite, Thums up, Maaza, Fanta andLimca",) Is cooler working properly?Related to Price Communication: Is there proper price display of the products?

Related to product availability: All the brands should be present in the every distributionchannel but main concern is that 300 ml should be presentin the every channel and 600 m1 and 1.5 litters per bottlesshould be present in the Eating and. drinking, convenienceand Grocery shop


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Outlet Structure of the Coca Cola in India


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Consumption Pattern

A) E & DB) ConvenienceC) Grocery

(A) E & D :

Those outlets where people visit to eat or drink areknown and eating and drinkingoutlets. Such as Restaurants and Hotels, Dhabas.(B) Convenience : Convenience outlets ate those outlets where peoplevisit regularly for various purposes

like stationary shop, S.T.D Booth and general Store.(C) Grocery : Those outlets where people visit to purchase foodgrains and any of such things for futureconsumption and called as Grocery shops.


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Based on Volume Pattern

According to the volume sale in the outlets the companyhas adopted a unique policy of categorizing the outletsin four different segments such as:

DIAMOND

GOLDSILVERBRONZE

DIAMONDThose outlets, which give an annual sale of Coca - Cola

products more than 800 crates.GOLDThose outlets, which give an annual sale of Coca - Colaproducts less than 200 crates


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Based on Volume Pattern (contd.)

SILVERThose outlets, which give an annual sale of Coca - Colaproducts between 200 to 499 cratesBRONZEThose outlets, Which give an annual sale of Coca':-Cola

products less than 200 crates.

Based on Income Level

High

MediumLow


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DISTRIBUTION AND SUPPLY CHAIN 38

135241264-Coca-Cola

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