Coca Cola Global Success

Coca Cola Global Success

Coca Cola Global Success

The supply chain begins with extraction of raw materials, to manufacturing of product, to the distributors on to the end product user, the customer or consumer.   Supply chain management is the management of processes a from the raw material suppliers to the final customer (Wisner, Choon & Leong, 2012).   There are many strategies used because a break in the supply chain can cause financial havoc for a company or even destroy a company.   A company must meet the customer demand and get the product out to their customer in order to stay competitive in the market and financially afloat.  Distributing to a global market can bring even more risk to a company.  The Coca Cola Company uses strategies that have minimized the risks including the creation of Bottling Investments Group (BIG), set up in local markets, uses a SAP integrated program, involved with environmental concerns, and employs risk management planning.

Coca Cola began in 1886 by Atlanta pharmacist, Dr. John Pemberton when he created the soft drink that could be sold at soda fountains.  Coca Cola is a mixture of syrup and carbonated water.  It expanded to soda fountains outside Atlanta.    In 1894 due to growing demand the beverage was made portable and put in bottles.  In 1899, three businessmen purchased the bottling rights and developed a bottling system large scale (Coca-Cola).   Coca Cola Company owns and manufactures the concentrates, beverage bases and syrups and sells to the bottling operations.  Coca Cola is also responsible for the brand marketing.  The bottling partners manufacture, package and distribute to their customers.  Coca Cola has succeeded in having a global supply chain and today is in over 200 countries and dominates the global soft drink market (Sapardanis, 2015).

A risk of being a global company is outsourcing jobs in another country can cause product to be lower in quality.  In the case with Coca Cola, they don’t take the risk of this happening because they have control over their bottling companies.  In recent years bottling companies were independent and for many years this worked for Coca Cola.  However, in 2006, Coca Cola Company created the Bottling Investments Group (BIG), to ensure bottling operations remained part of their system and would receive expertise for long term success, and invested in them.  “BIG can drive long-term growth in critical markets and affect major structural or investment challenges” (Coca Cola).  Today, Coca Cola has more than 250 bottling partners worldwide (Coca Cola).  

“An amazing 1.8 billion servings of Coca-Cola products are sold around the world every day, according to Steve Buffington, vice president of supply chain development and director of supply chain, Bottling Investments Group for The Coca-Cola Company. Making sure that every one of its thirsty clients gets the right product, at the right time and in the right price range is Coca-Cola’s supply chain priority” (Coca Cola).  We have 16 million retail outlets around the world that sell Coca-Cola [products], and we have to have common practices, processes and capabilities no matter where we operate in the world,” Buffington explains. “We do direct store delivery to more than 10 million of those [retail outlets]. We make sure we get the product on the shelves in a consistent way from a quality and collaborative standpoint, doing it very efficiently by leveraging our global best practices and building capabilities at the local level” (Coca Cola).  

Another risk for a company is a break in the supply chain when the product is held up in customs, but Coca Cola is within the local markets.  Coca Cola has manufacturing and bottling companies in the countries they market in.  “Although Coca-Cola is a global company, its products never travel far to reach the final consumer, making it a local company in each market where it operates. “Our business is a local business,” Buffington relates. “We typically don’t ship Coca-Cola more than a few hundred miles; it’s all about being responsive to the customer’s needs and the local tastes of the consumers in every market” (Lutter, 2015).

Coca Cola Company uses modern technology that integrates information for planning and meeting customer demand.  The Genesys program is an integrated SAP Enterprise Resource Planning (ERP) solution that will replace the legacy systems in the processes. Genesys will allow the company to shorten cycle time in these processes and be more productive. It will also help bring more visibility into the business and improve decision making.  “We are a shelf-replenishment company, a supply chain company, a sales and customer services company,” says Esat Sezer, senior vice president and chief information officer. “It is very important for us to integrate our manufacturing plants all the way up to the replenishment of shelves in the retail outlets. Through the information side of the equation, we are basically tying those two ends of the business process together: the manufacturing side, which drives the supply of our product, and the shelf-replenishment side, which drives the demand part of our product” (Sapardanis, 2015)