Coca-Cola Company: Supply Chain Management

The Coca-Cola Inc. supply chain process must focus on quality. The research centers on the different supply chain concepts. The research includes the application of the different supply chain concepts to the Coca-Cola Inc. beverage business. The supply chain process must focus on the quality inputs from the different supply chain parties, especially the suppliers.

The points in the Coca-Cola’s global supply chain that is more susceptible to quality problems. There are many points in the Coca-Cola Inc. global supply chain that are susceptible to quality problems1. The production department (Coca-Cola Inc. bottling plants) must the produce quality products to ensure a continued and higher demand for the coke products. The transportation companies must ensure that the coke products will arrive at their destination on or before the delivery dates. The marketing department must create a strong demand for the company’s products and services.

The company’s creating demand policy includes paying for advertisements in the radio, television, radio, and internet areas. The store outlets must display the coke products in cook refrigerators or coolers in order to persuade the current and prospective clients to buy the Coca-Cola Inc. products. The suppliers must ensure that the raw material quality meets the minimum quality standards set by Coca-Cola Inc. production (bottling) managers. The accounting department must ensure that all receivables are collected and all sales on accounts are billed correctly. Failure in one of the supply chain points will precipitate to a lower demand for the Coca-Cola Inc. products and services2.

Juran’s quality trilogy. Juran’s quality trilogy3 can be very helpful in supplier quality management of Coca-Cola. First Coca-Cola Inc. had to continue its leadership in the world beverage market. Pepsi-Cola is one of the closest rivals of Coca-Cola Inc. in the global beverage market. Thus, Coca-Cola Inc. must continue to maintain the company’s current and even enhance supplier quality management process. A decline in the supplier quality management service will precipitate in the company’s revenue decline. Likewise, a decline in the company’s supplier quality management process will not disappear in the near future if the current supplier quality management process deteriorates significantly. The enhancement of the company’s supplier management process crops up due to changes in the competitor’s supplier management process.

The competitors’ improvement in their supplier management process will trigger a decline in the demand of the Coca-Cola Inc. products and services. The delay in the arrival of the Coca-Cola Inc. products will discourage the store outlets as well as the current and future coke clients from buying stores that have constant coke product stock outs. Thus, Coca-Cola Inc. must improve its traditional supplier management process to stay ahead of the competitors. Upper managers must contribute their huge share to maintaining a viable supplier management process. Upper managers must train themselves with the latest and most innovative supplier management process. Thus, the supplier management process must be responsive to the supply chain factors from the Coca-Cola Inc. suppliers to the transportation agencies to the final destination. The final destination includes all stores selling the Coca-Cola Inc. products and services. To be successful in this area, Coca-Cola Inc. must continually revise its current supplier management process to reduce delays in the deliveries of the Coca-Cola Inc. products.

Further, all parties within the Coca-Cola Inc. supplier management process should cooperate to ensure the successful achievement of the established mission, vision, goals, objectives, and benchmarks. Unity includes continued communication among the different Coca-Cola Inc. supply chain parties. Likewise, the Coca-Cola Inc. management should find ways to reduce resistance among the different supplier management process parties. For example, the production department should do its best to retain and improve the current quality taste that makes Coca-Cola Inc. products the most wanted beverage product around the world. For example, changes in the production process will sometimes generate resistance from the employees.

Normally, the older employees prefer to hang on to the traditional production processes. This is understandable because old people have difficulty assimilating new production procedures. In addition, the old employees have grown to become experts in the old way of production the coke products. The company must offer incentives to the old employees in order for them to accept the new production processes. For employees who refuse to accept the production process change, the Coca-Cola Inc. management may retrench the employees who refuse to accept the change. In addition, the Coca-Cola Inc. management may also transfer the old employees to another department where they will become of more use. Sometimes simple creative persuading will get the change agreement of the old employees4.

There are other examples to clarify the issue at hand. The warehouse department should continue to do its best to ensure that it has all the needed raw materials needed to produce the Coca-Cola Inc. products. The marketing department must continue to meet sales quotas by communicating with the Coca-Cola Inc. store outlets. The store outlets must continue to reserve cooling units that will preserve the cool taste of the Coca-Cola Inc. products. The transportation companies must continue to bring their delivery trucks or other transportation units to the required warehouses and manufacturing plants to ensure that the coke products reach their destination one or before the scheduled delivery deadlines. Research and development department must continue to on its toes experimenting on new products that will augment the current Coca-Cola Inc. products that are selling like hotcakes in the European, American, African, Asian, and other global market segments5.

The Coca-Cola Inc. must ensure that the three quality areas are prioritized. The Coca-Cola Inc. must implement a quality planning process. The process will ensure that the company’s supplier management process will continue its current high quality pace. In addition, the company should prioritize quality control procedures are not reduced. The company must continue to retain its current quality control procedures in order for the company to retain or exceed its monthly revenue targets. The company should also implement a continuous quality improvement process. The process will ensure that the company will introduce the latest quality supplier management quality schemes needed to keep abreast of the competition. For example, the company may hire more delivery trucks to feed the increased need for the Coca-Cola Inc. products during seasonal or higher demand occasions. The key is synergy. Each department or party in the supplier management process should coordinate their efforts to ensure the smooth and speedy delivery of the coke products to the intended store outlets using the least possible warehousing and delivery cost.

The applicability of Crosby’s Zero Defect concept by Coca-Cola. Crosby’s Zero Defect concept will snugly fit the Coca-Cola Inc. supply chain process. First, Coca-Cola Inc. must all processes in the supply chain process must conform to established quality benchmarks. The Crosby Zero Defect policy6 must be implemented without exception. Second, the company must focus on preventing defects from cropping up when compared to quality inspection and correction of errors. It would be less costly if the quality procedures are in place to ensure the reduction of defects or errors to zero levels. The company must continue to implement a zero defect quality level. The rise of just one bottle of coke product that poisons a coke client will create a huge damage to the reputation of the Coca-Cola Inc. name. The company must equate quality in monetary terms. Poor quality Coca-Cola Inc. products are equated with a huge reduction in coke revenues.

Illustration of how the Ishikawa’s fishbone diagram can be helpful in finding the root cause of quality problems at Coca-Cola’s bottling plants. The Coca-Cola Inc. must implement Ishikawa’s fishbone diagram to resolve problems in the company’s supplier management process. Ted Hard7 emphasized the fishbone principle focuses on finding the causes and effects of each problem situation. Coca-Cola Inc. must find all the possible causes of supply chain malfunctions. The supply chain of Coca-Cola Inc. includes machine, man, methods, and materials. A brainstorming session will bring out the causes of problems in the machine bone. The causes of the machine bone may include production equipment breakdown, outmoded bottling plant equipment, electricity issues, lack or equipment. The man bone problem may be triggered by incompetent or greenhorn workers, lack of training, the employees’ lack of drive to excel in their assigned supply chain responsibilities. The methods bone problem may be triggered by poor documentation processes, lack of production process quality, and poor job specifications. The materials one problem may be triggered by substandard quality raw materials, lack of inventory control, and poor materials management processes.

Assessment of the utility of Shingo’s Poka-Yoke devices at Coca-Cola’s bottling plants. Coca-Cola Inc. should implement the Poka-Yoke devices at the Coca-Cola Inc. bottling plants8. The devices will ensure that the defects will be seen before the products proceed to the next production process. The system is based on the policy of mistake-proofing the production process. The Coca-Cola Inc. management must ensure that quality control should be implemented to prioritize catching production employee errors immediately. The key to the Poka-Yoke device theory is defined in one word. The word is immediate. Without the implementation of the Poka-Yoke devices, the company will lose more in terms of repair and declining sales and demand for the Coca-Cola Inc. products. It would cost the company more to retrieve the products sold in the store outlets and to resolve any quality taste errors. The public will reduce their demand for the coke products if the company’s products taste differently from the established coke product tastes. Coke must add more quality control personnel to inspect the coke during the production processes.

Further, the stringent quality standards will ensure that the coke products will leave each coke bottling plant process only if the products meet established taste and other Coca-Cola Inc. product standards. Coca-Cola Inc. must understand that the Poka-Yoke devices should in place in order to halt the continuing process if one or more aspects of the production process do not meet quality and quantity benchmarks. The devices should be in place in order to spot the errors committed by the human workers in the Coca-Cola Inc. bottling plants. For example, the bottling plants automatically place the coke bottle caps on the filled coke bottles. The Poke-Yoke device will ensure that the coke bottle will not continue to the next process if the bottle caps are missing. The Poke Yoke devices are useful because the cost of immediately finding an error would be minimal compared to having a store outlet find out that two bottles are empty. The Coca-Cola Inc. bottling plant is a significant part of the company’s global supplier and quality process. Poor coke production processes will precipitate to lower demands for the coke products9.

The above theories clearly prove that Coca-Cola Inc. should implement these concepts to enhance its supplier quality management process10. The suppliers are important parties or stopover points in the entire supply chain process. The company must continue to have an open communication with the company’s suppliers. The suppliers must be made responsible for delivering quality raw materials needed by the production process. Failure to deliver quality raw materials will translate to substandard coke product taste quality. Substandard coke taste quality will trigger a decline in the demand for the coke products.

In addition, the transportation company suppliers must ensure that the delivery vehicles will deliver pickup the coke products from the bottling plants and warehouses as scheduled. In addition, the transportation company suppliers should deliver the Coca-Cola Inc. products to the right store outlets as scheduled. Management must have a brainstorming with the suppliers and other parties in the supply chain process in order to thresh out any delays, hurdles, and other problem that crop up from each supply chain party. The brainstorming will ensure that all parties will contribute their own share to resolving the debacle confronting the company.

Based on the above discussion, the Coca-Cola Inc. supply chain process should center on quality. There are different supply chain concepts applicable to the supply chain process. The different supply chain concepts snugly fit the Coca-Cola Inc. beverage supply chain environment. Indeed, the supply chain process must centre on the quality inputs from the different supply chain parties, especially the suppliers.

Bibliography

  1. Bodden, V, The Story of Coca-Cola, The Creative Company, London, 2008.
  2. Crosby, D, The Zero Defects Option, Crosby Company, London, 2008.
  3. Hard, T, Nonprofit Internet Strategies: Best Practices for Marketing, J Wiley &Sons, London, 2005.
  4. Hugos, M, Essentials of Supply Chain Management, J Wiley & Sons Press, London, 2011.
  5. Saffer, D, Designing for Interaction: Creating Innovative Applications and Devices, New Riders Press, London, 2009
  6. Wood, J. Joseph M. Juran: Critical Evaluations in Business and Management, Routledge Press, London, 2005.