The Coca Cola Supply Chain

EXPLORING THE COCA COLA SUPPLY CHAIN NETWORK

Talking about Coca-Cola is undoubtedly very famous, almost everywhere. Data from Market.us shows that more than 10,000 bottles/second of Coca-Cola soft drinks are consumed by consumers globally. Coca Cola's Supply Chain and Logistics network operates widely and smoothly throughout the world.

What's behind the Coca-Cola Supply Chain? What technology do they use? What is Coca Cola's Supply chain strategy?

Some notes and data to answer the questions above are;


1. Focus on Local Suppliers

Coca-Cola operates at the local level. From the official Coca Cola website stated that there are about 225 local bottlers partners around the world. In the production process, Coca Cola only makes concentrates, and the bottling process is carried out at local partners by adding water, carbon dioxide and sugar, all of which are sourced from local suppliers. Some note that the sugar used is different at the local level. In America, sugar is from corn syrup, in Europe, especially is sugar beet, in Asia, is sugar cane.

From the local Distribution Center, Coca Cola product is packaged and ready to send to the customer's outlet. Coca-Cola has implemented a Local Supply Chain optimization strategy. >>In terms of Lean Manufacturing, there are 7 wastes. the types of waste are 1) Transportation, 2) Inventory, 3) Movement, 4) Waiting, 5) Excessive processing,6) Overproduction, and 7) damage to goods. In English, it is known as TIMWOOD (Transportation, Inventory, Motion, Waiting, Over-processing, Over-production, Defect). These seven wastes were introduced by Taiichi Ono from Japan who worked for Toyota and introduced in a production system known as the Toyota Production System (TPS)<<, Coca Cola has been able to eliminate Waste from the Movement and the Transport phases in the Supply Chain from Lean manufacturing point of view. Coco Cola made a strategy of establishing a factory near where the sugar is grown. It takes less time for sugar to be delivered to the processing plant, the less risk it will endure throughout the entire supply chain process.


2. Real Time Monitoring Visibility

The process of distributing Coca Cola drinks globally is certainly very complex and complicated. But Coca Cola was able to monitor the distribution process very well. Coca Cola has successfully integrated and synchronized business processes so that from the point of location of the factory it can be delivered within 24 hours to retail store shelves. Coca Cola is capable to plan and implement a process by which the warehouse staff and the loading and unloading crews at the distribution center know when a truck arrives at the warehouse within one hour. Here Coca Cola has used GPS-equipped logging to delivery trucks. With this solution, Coca-Cola is able to empower its warehouse, planning department, and production functions to operate with better information. And It can improve implementation with better coordination. Adopting a commercial GPS tracker, for example, can ensure driver safety, manage drivers efficiently, reduce unnecessary transportation costs.


3. Use of Technology for Route Optimization

Coca-Cola Enterprises (CCE) is the largest producer and distributor of Coca-Cola products in the world. CCE's task is to distribute Coca-Cola concentrate to several bottling factories as well as distribute packaged and canned drinks from the bottling plant to the Distribution Center to the customer's final retail outlet.

In the field, CCE faces many customized challenges. Certain orders and outlets require specific vehicle types and equipment. For example, military bases require certain vehicles, whereas centers in large cities require the use of small trucks. Many outlets also require CCE to ship products either before opening or after closing. So, CCE must ensure its logistical operations are synchronized and smooth. And internally Coca Cola needs to establish all delivery orders in the correct order of travel so that they are carried out by the available vehicles and at minimum cost while keeping all constraints in mind.

Coca Cola's solution is to implement a route optimization model that assigns all retail outlets to journeys (including the order of their visits) and assigns all trips to the existing truck fleets and available drivers in a way that allows CCE to minimize overall costs while meeting all constraints. With a flexible planning way that is responsive to changing customer demands. The efficient route also means that less mileage, less fuel consumption, and less carbon dioxide emissions. Coca Cola has Software for scheduling deliveries, giving the best route while considering the weather; traffic; sunrise and sunset times; weight, load and height capacity; avoidance zone; turn left; and others. And, it does all of this in just 30 seconds. This geo-coding device automatically corrects the wrong customer addresses that are entered into the system to ensure that no delivery fails.


4. Direct to Store Delivery (DSD)

Coca Cola is also pursuing a Direct to Store Delivery (DSD) strategy allowing Coca-Cola to ship directly to self-service retail stores from Coca Cola's production facilities. Coca Cola has reduced the distribution chain by cutting secondary or tertiary distribution centers, so that the stock is not long in the warehouse but long on the shop shelf. Of course, this will minimize the possibility of damage, because the goods are touched by fewer middlemen.

(From various sources)


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