Supply chain management of coca cola company

Supply Chain Management of Coca Cola Company

Institute of Business & Technology (IBT)

Organization:

Supply Chain Management on The Coca Cola Company

Course Name: Supply Chain Management

Instructor Name: Sir Shoaib Ahmed

Course Code: MGT-518

Semester: Summer-2014 Batch B.B.A (Hons.)

Group Members:

1. Talha Hassan BB-2131

2. Saad Mussarrat BB-2359

3. Shahzaib Malik BB-2116

4. Maaz Uddin BB-25227



Acknowledgement

First of all, we are thankful to Almighty Allah (The most gracious

and the most powerful, the knower of hat’s see a d u see ), for giving us the courage and power to learn and to apply our

knowledge for the benefits of mankind.

We would like to express profound gratitude to our instructor

or teacher Sir Shoaib, for their support, encouragement,

supervision and useful suggestions throughout this project work.

We would not have been able to finish this wonderful project

without his support and guidance. Thank you for patiently

guiding us throughout this project and motivating us to work at

our best. Group members are Shahzaib Malik, Saad Mussarrat,

Talha Hassan and Maaz Uddin for the course of supply chain

management and the organization or company is the coca cola

company.



Introduction

Company Profile:The Coca-Cola Company is an American multinational beverage

corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates

and syrups, which is headquartered in Atlanta, Georgia. The company is best known for its

flagship product Coca-Cola, invented in 1886 by pharmacist John Stith

Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was bought in 1889

by Asa Griggs Candler (December 30, 1851 - March 12, 1929), who incorporated The Coca-

Cola Company in 1892. The company operates a franchised distribution system dating from

1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to

various bottlers throughout the world who hold an exclusive territory. The Coca-Cola

Company owns its anchor bottler in North America, Coca-Cola Refreshments.Its stock is

listed on the NYSE and is part of DJIA, S&P 500 index, the Russell 1000 Index and the Russell

1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent. Coca-Cola currently

offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion

servings each day.

Over 146,000 employees around the world

More than 1.7 billion servings per day

More than 3500 kinds of beverages

Sponsorship: Olympics, FIFA, EURO etc.

Charity and contributions 1% from the total income

The Coca Cola Foundation, 1984. Financial support for improving society.

2002-2010 more than $690 millions of contribution and charity.

The biggest contributions:

Africa – 11 millions

China Youth Development – 6 millions



United Nations – 2 millions

Vision

• To become the best place to work for people

• To present the world a quality beverage brand.

• To make a difference by helping, building and supporting sustainable communities.

• Being highly effective and fast moving organization

Mission

• To refresh the world and inspire moments of happiness and optimism.

• To create value and make a difference.

Values

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it's up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well



Images of few of The Coca Cola Company Brands



“upply hai A ordi g to The Co a Cola Co pa y I ter atio al



Market Share by Coca Cola World Wide



Competitive Strategy

• Focus on aggressive marketing has been the cornerstone of the culture and strategy of

its business.

• Coca-Cola always made expansion efforts.

• Coca-Cola not only produces soft drinks but it also serves energy drinks, tea, juice

drinks and water.

• Acquisition for gaining competition advantage.

• The most important factor of the Coca Cola Company is its employees.

• Coca-Cola is selling its product to the multinational organizations like MC Donald's,

KFC, Sub-way, Dunkin Donuts and also keeping local market in focus.

• Coca-Cola is focusing on public by charitable contributions.

• Coca-Cola’s alue a d future de elop e t pla s lead to i rease i the i terest are holders.

• They are operating through push strategy of supply chain worldwide in the beverages

industry.



Global Presence till 2012



Global business is organized into six geographic Operating departments:

1. Africa

2. Pacific

3. European Union

4. Latin America

5. Asia

6. North America



Organization Structure Global Decision Making Process



Coca Cola Supply Chain Process

Supply Chain Stages

A typical supply chain may involve a variety of stages:

Customers

Retailers

Wholesales/distributors

Manufacturers/ Plants

Component/raw material suppliers



Inventory and Warehouses system

A-B-C classification

Studying the demand and finding the best method for forecasting.

Studying the inventory problems.

Building the dynamic inventory model.



Determination of economic order quantity.

Determination of stock level.

Determination of safety stocks.

Selecting the proper system of ordering for inventory.

Ending up with the final inventory model, which will be solution for our problem with

numerical example.

Information Flow System

Studying the information flow system of the company.

Detecting and identifying the problems and the area for improvement.

Build the information system for the company with the improvements and

modifications.

Ending up with final information flow system, which will be the solution for our

problem.

The information model deals with the integration of supply chain members and

concentrates on the flow of information among the chain members.

Information technology plays a vital role for increasing collaboration among supply

chain members. From the information point of view the effective supply chain

management must provide the right amount of relevant information to the right

person at the right time.

Information is the key to successful supply-chain management because no product

flows until information flows.



Benefits of Information Technology

Higher visibility

Reduced transportation spend

Immediate availability of information

Greater accuracy

More economic

Better customer service

Higher productivity

Reduced paper work

Faster processing

Increase on-Time Deliveries

Improved Capacity Utilization

Information Requirements

To ensure that valuable, actionable knowledge readily flows across the supply chain,

information must be

Accessible

Relevant

Accurate

Timely

Transferable



Suggested Improvements

Electronic pick slip report for the warehouse/ transportation



Radio frequency identification (RFID)



Positioning of the coca cola company

Co a ola o s ore tha ½ of the orld’s e erages.

Coke is affordable in all the countries. It was not out of the price range for an

afternoon snack.

Coke comes in a variety of sizes worldwide so you can use it for a crowd or as a

personal snack drink

Coca-Cola is re og ized y 94% of the orld’s population

TARGET MARKET Coke’s commercials basically based on young generations, so, the young generation is

the target market of Coke because they want to represent Coke with the youth and

energy but they also consider about the old people they take then as a co-target

market.

MAJOR SEGMENTS

Major segments are basically those people who take this drink daily and those areas

where the demand are higher than the other areas. There are so many people who

take this drink daily and those people who take weekly and those who take less often

are always there as well. So, their basic segments are those people who take this drink

regularly.

FACTORS EFFECTING SALES

There are so many factors, which affects the sale of coke. Here we are discussing three

major factors which effects coke.

Per capita income

Competitors

Weather



PER CAPITA INCOME

First e ill dis uss a out Per apita i o e . This is ajor fa tor that affe ts the sale of this soft drink. Because which every passing year budgets are becoming very strict and tight

in order to purchase things. So the disposable incomes of the people are coming down. They

spend heavily on rents, utilities, and education and basic necessities and after that when

they get extra money they think about this soft drink .So the decreasing per capita income

effects badly in selling and production of this soft drink. And to get through with this

difficulty there is need to increase the level of per capita income of Pakistan because it is

much lesser than the rest of the countries.

FEATURES

Coke is having difference in taste than Pepsi due to having difference in ingredients.

Coke has maintained global leadership in soft drink industry.

Coke is trying to focus on worldwide expansion of the cola market.

Coke must try to focus on its relationships with bottling subsidiaries.

Coke is facing a major challenge in developing countries that their regional bottlers may

not have the financial resources to continue expansion.

The brands are trying to create world-wide economic development and population

growth to sustain sales and profits



c) PRODUCT REVIEW

Coca-Cola has, and still, continued to reign in the consumers market stunning other

companies with their artistic and viewer-friendly commercials

Coke is having difference in taste

Coke has maintained global leadership in soft drink industry

Coke is trying to focus on worldwide expansion of the beverage market

d) Competitive Review

BUYERS/CUSTOMERS

Coca-Cola has three major and large customers in the market, food street 60,000 cerates

/year, McDonalds 40,000 cerates/year and Pakistan Railways who buy 50,000 cerates /year.

However, these three customers being large and powerful are in an influential and

bargaining position they can demand discount or others facilities like (boards

sign/freezers/coolers etc.) and impose a threat to switch to their closest rival and

competitor Pepsi.

SUBSTITUTES

Nestle products like juices, coffee, mineral water etc. and Shezan juices are substitutes of

Coke for health conscious people and other fresh juices.



RIVALS/COMPETITORS

DIRECT COMPETITORS

The direct competitor of Coca-Cola is Pepsi and that of CCBPL is PCI (Pepsi cola international)

there is always ongoing tuff competition between these two arch rivals with Pepsi leading

with 54% market share and Coke gradually growing and catching up 36% market share in

Pakistan. However on global level the situation is reverse. Both companies often engage in

price cut wars, prize scheme wars and sponsorship wars to win over each other customers.

INDIRECT COMPETITORS

These include Nestle and Shezan juices that do not pose a threat to Coke as yet but

has the potential to do so as it is exploiting the natural aspect and health issues more

a d ore to ake people o s ious a out physi al fit ess Coke has lau hed Diet Coke to ou ter the physi al fit ess de a ds.

BUFFERING AND SMOOTHING

For beverages like Coke the buffering and smoothing policies does ’t matter and they

don’t apply anymore because Coke remains in demand all the year round in festivals,

parties, events, meetings sports etc.

SUPPLIERS

Coca-Cola has authorized suppliers and which do not pose a threat to it. Anyhow Coke

does have a quality check procedures in its plants to ensure that they get the right

kind of ingredients from suppliers.



NEW ENTRANTS

Coca-Cola is not afraid of competing .it doesn’t fear losing its share to Mecca- Cola or

other new entrants. The company management believes that new entrants provoke

healthy competition, which will provide Coke with a challenge to hold on to its loyal

customers. Besides it will take a lot of effort on the part of new entrants like Mecca-

Cola, Pak-cola to fully launch its product in Pakistan and capture or even motivate

people to switch on to their new product from Coke.

COMPETITIVE ADVANTAGES

BRAND NAME, SYMBOL, BOTTLE SHAPE.

Brand name, symbol and bottle shape are distinctive features of Coca-Cola which give

it an edge over its competitors. (Even without name people can easily identify Coke’s, fanta’s, and sprite’s bottle from crowd.) They cannot be copied or imitated by others.



Images of The Coca Cola Company Timeline



Plant Bottle Manufacturing Process



Value Chain Process

Supply chain management of coca cola company

Food

Transcript of Supply chain management of coca cola company