Coca-cola’s supply chain design is not complicated as a model, but since its spread all over the world, it gives rise to certain complications. The company had to streamline its supply chain recently to keep up with other value chain key members. This has boosted the supply chains efficiency compared to the previous supply chain model, which was automated but not fully integrated with partners and retailers. (Coca-Cola, 2009) Supply Chain Efficiency
Coca-cola’s supply chain has been undergoing gradual automation in the form of information system solutions. The major change being the SAP implementation to cope up with Wal-Mart’s demand issues. Recently, coca-cola’s Puerto Rico division initiated a software implementation in the form of a complete ERP solution with SCM modules as well. The solution has been provided by Retalix software inc. (Coca-Cola Puerto Rico Bottlers Drink Up Retalix Supply Chain Software Solutions, 2009)
With an integrated enterprise wide software solution, the supply chain practices are bound to be streamlined. Efficiency is increased in the following areas: Information flow With an integrated information system at the distribution level, such as the implemented SAP system and the Retalix implemented system, information is stored centrally in a database or data warehouse. This information includes internal as well as external data gathered and generated. This information is vital in the supply chain processes.
In manual systems, information is processed manually. This includes all reports, invoices and order documentation. Manual does not mean they are prepared by hand (in some cases they are) previously coca-cola did have computer systems for this work but with the new system, the company has integrated all components and links in the value chain and now share a common platform. This speeds up information sharing and order processing activities. An example would be the capability of the SAP system to be integrated with Wal-Mart’s system.
This allows Wal-Mart to alert Coke’s system about shelf and inventory levels at the store and notifies the system about weekly and monthly demand. Coca-cola distributors then send the required shipments of bottles and cans to the supermarket’s concerned branch. This way, coke-shelves at Wal-Mart are never empty or over-stocked in the inventory. In the past, this easy exchange of information was not possible. As a result, shelves remained empty and coke lost potential sales. Logistics and distribution With the new information system solution, the logistics is also automated.
Automation is in the form real time alerts and notification to logistics teams. These could be warnings and prior notices of potential bottlenecks, traffic blocks, determination and notification of ideal routes and order details. Coca-cola’s distribution network is one of the biggest in the world. As far as efficiency is concerned, the company has successfully been supplying its beverages to retail stores and restaurant chains for decades. With technological advancements, coca-cola had to evolve as well.
With the new information system, coke’s distribution network can be planned out based on the different de (Coca Cola to restructure its supply chain, 2006) and levels from retail stores generated automatically by their integrated systems. Further improving efficiency Although coca-cola has recently taken steps and measures to improve the efficiency of their supply chain with the implementation of a new system and remodeling, there are still some improvements and aspects that the company can work on to gain even better results. Supply chain visibility
Increasing supply chain visibility improves efficiency. It provides a clearer look at the supply chain processes and is particularly an important aspect for companies operating globally. Supply chain visibility can be improved in the logistics area with the implementation of RFID systems used to track shipments. This allows companies and their suppliers to track and ensure the prompt delivery and timeliness of their shipments and also provides the facility of determining real time progress at any time.
Integrated value delivery network This involves connecting and sharing information with all members of the value delivery network and not just the distributors and one chain of supermarkets. All retail outlets, raw material and chemical suppliers, bottlers, marketing intermediaries and distribution channels must be linked via an information system with the important information stored centrally. With the implementation of SRM (supplier relationship management), PRM (partner relationship management) and CRM (customer relationship management) solutions, coca-cola will be able to manage suppliers and partners efficiently.
Conclusion Coca-cola operates a global and well managed supply chain network. With enterprise wide information systems implemented, the company is able to anticipate customer and retailer demand. This allows coke to manage inventories efficiently and not miss out on sales as was the case in the recent past. With constant improvement and keeping up with technological advancements in the industry, coca-cola will be able to maintain a worldwide supply chain model and set an example for competitors.