Logistics and Supply Chain of Coca-Cola Ltd

This article discusses the logistics and supply chain of Coca-Cola Ltd, including external environmental analysis, supply chain management, challenges, and recycling. It also highlights the importance of customer preference and innovation in the supply chain. The article is relevant for students studying logistics and supply chain management in business courses.

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LOGISTICS AND SUPPLY CHAIN OF COCA-COLA LTD
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Introduction
Established in the 1880s in Atlanta Georgia, Coca-Cola has become one of the most
popular brands in the beverage industry across the world. Coca-Cola is considered to have strong
marketing, production and distribution channel of its products. The company is in over 200
countries with more than 2700 products. Some of its products include; minute maid, sports drink,
coke, Fanta, diet coke, minute maid and others cited. Coca-Cola strives to achieve a great market
share in different countries across the world with an effective distribution channel and
commitment to providing value to their customers.
External Environmental Analysis
Different internal and external factors influence the functions of management, and
general operations of an organization and Coca-Cola is no exception. The wide customer range
requires coca cola to meet the demand of their customers. Through its operations, it is faced by
different factors in the environment. The external environment of the company comprises of the
micro and macro environmental factors. The macro environment influences the strategy and
decision-making process of the company. These factors include; legal which is characterized by
the different laws of the country of operations, the political environment is affected by the
interests of the political parties in host nations and government policies that influence the
marketing strategies. The economic factors such as inflation, taxes influence the pricing of coca
cola products in a country. Social factors such as the sports season influence the consumption of
the products. Technological factors are responsible for the production process and its
distribution. This influences the number of customers the product can reach. The market trends,
customers, suppliers, market structure and competition, are some of the micro-environmental

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factors that affect the operations of the company Ho et al, 2015 p. 5040). These are some of the
external environmental factors influencing the operations of the coca cola company.
Supply chain
Supply chain management refers to the streamlining of supply activities to provide value
to the customers and gain a competitive advantage in the marketplace (Christopher, 2011).
Companies strive to establish an effective, economical and efficient supply chain. The supply
chain is responsible for the information system, production and the development of the products.
Therefore, for the success of a company, it has to be more effective. The supply chain refers to
the collection of steps a company follows to achieve the desired final product from the raw
materials. The process includes the following steps; planning, development/source, manufacture,
and distribute/deliver.
Planning stage
The coca cola's planning stage involved marketing, standardizing, branding and
management. The planning stage of all companies revolves around the above factors. They
determine the product, distribution and end users.
Component/raw material
The concentrate and syrup is the main ingredient in the coca cola products. The products
are outsourced. The syrup is made of caffeine, carbon dioxide for fizz, caramel, natural
flavoring, and phosphoric acid. Other raw materials such as sugar and water are also sourced
from different suppliers.
Manufacturing
Ones the raw materials are supplied the manufacturing process takes place. The diagram
below shows the supply chain process of coca cola.

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Challenges in the manufacturing stage
One of the raw materials being sugar has become a global challenge across the globe. There are
increased campaigns on the concerns of obesity targeting the sugar content in the soft drinks. The
company needs to come up with strategies to control the level of sugars in the content. Coca-cola
introduced the diet coke product with zero sugar content to counter this challenge. It should be
implemented in all the products to prevent obesity across the world caused by the consumption
of sugar. The health campaigns associated with the soft drinks is an alarm for the need for coca
cola to innovate their products to promote health and wellness (Manuj & Mentzer, 2008 p. 144).
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Distribution and warehouse
Coca-Cola is comprised of a large system of Franchise Company and bottling plants. The
bottle drinks are delivered to a warehouse and then distributed to various dealers. For ease in the
distribution of the products, coca cola uses specific software. The software contains information
on the distribution centers, and it automates the distribution process. The distributor has to
deliver the correct quantity of the product and the right quality at the right time for the right
value. The distributors are then responsible for delivering the stock to all the retailers and
wholesalers within the region. Coca-Cola has a system in place where one is responsible for
delivering stock off to the different regional distributors in a country to ensure the product
reaches the end users (Salem & Haouari, 2017 p. 1852).
Customer
The customer is also an important part of the supply chain. All the processes focus on the
customer. The end product targets the customer and for the flow of the process, the customer has
to be available. In coca cola, the customer orders are filled by the retailer from the existing
inventories. An alternative can be the customer purchasing direct from the manufacturers.
Customer preference is another challenge affecting the supply chain (Xiao, 2015 p. 368)
Given that coca cola is a global company, its supply chain is complex. The product attributes are
constantly changing leading to constant challenges. The release of a product leads to customers
needed the next big thing. Combined with competition, companies have to constantly innovate
which is costly. Innovation is critical to the survival of the company in the market (Madhani,
2018 p. 28). Also some products might do well in other countries or regions and be rejected in
another country. Companies have to redesign their supply chain system to meet the demands and
needs of the customer.

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Recycling
The company recycles its bottles (Christopher 2016). The coke is engaged in recycling
initiatives globally. They use this to create public awareness. Coca-Cola as a company is
responsive to environmental demands and uses the bottlers; glass, polyethylene containers or
aluminum containers for packaging (Blanchard 2016 p. 29.). The company has managed its
relationship with the stakeholders very well over the years. The diagram below shows the
recycling process.
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Conclusion
The desire of every organization is to achieve an effective supply chain network that will ensure
the company reaches the target customers at their points of needs. Coca-Cola is global
organization that has a wide market share due to its well-managed logistics plan. With the
specific mode of distribution, the company faces some challenges. There is a gap in the
international communication system, high cost of distribution process and lack of customer

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loyalty in most cases. Addressing these gaps will help the company to expand and achieve higher
heights of performance.

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List of References
Blanchard, D. (2016) ‘Thinking Outside the Bottle’, Industry Week/IW, vol, 265 (2), p. 29.
Available at: http://search.ebscohost.com/login.aspx?
direct=true&db=aph&AN=113989708&site=ehost-live (Accessed: 15 October 2018).
Christopher M (2011), Logistics & Supply Chain Management, 4th edition. Financial Times
Prentice Hall, UK
Christopher, M 2016, Logistics & Supply Chain Management, vol Fifth edition, FT Publishing
International, New York, viewed 15 October 2018, <http://search.ebscohost.com/login.aspx?
direct=true&db=nlebk&AN=1419659&site=ehost-live>.
Ho, W. et al. (2015) ‘Supply chain risk management: a literature review’, International Journal
of Production Research, 53(16), pp. 5031–5069. doi: 10.1080/00207543.2015.1030467.
Madhani, P. M. (2018) ‘Building Customer-Focused Supply Chain Strategy with 4R
Model’, Journal of Contemporary Management Research, 12(1), pp. 14–32. Available at:
http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=129723359&site=ehost-live
(Accessed: 15 October 2018).
Manuj, I. and Mentzer, J. T. (2008) ‘Global Supply Chain Risk Management’, Journal of
Business Logistics, 29(1), pp. 133–155. Available at: http://search.ebscohost.com/login.aspx?
direct=true&db=buh&AN=33382304&site=ehost-live (Accessed: 15 October 2018).

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Salem, R. W. and Haouari, M. (2017) ‘A simulation-optimisation approach for supply chain
network design under supply and demand uncertainties’, International Journal of Production
Research, 55(7), pp. 1845–1861. doi: 10.1080/00207543.2016.1174788.
Xiao, Y. (2015) ‘Flexibility measure analysis of supply chain’, International Journal of
Production Research, 53(10), pp. 3161–3174. doi: 10.1080/00207543.2014.975864.