Supply Chain Management and Location Decision of Coca-Cola


Added on  2019-09-30

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Executive Summary The company Coca-Cola is the marketer, manufacturer, and retailer of the non-alcoholicbeverage syrups and concentrates. Headquarter of the company is in Atlanta. Coca-Cola is being recognized as the extravagant brand. Coca-Cola markets four brandswhich include Fanta, Sprite, and Diet Coke, juices, coffee, sports and energy drinks.Further, the report will help in understanding the movement of the product and thenetwork of the supply chain of the company. The facilities of the warehouse and theinventories of the Coca-Cola will also be explained below. The preferable usage of theintermodal choice is given for the company so that the company can generate morerevenue. Further, the factors which the company has taken while making the decisionfor the location are also explained. The impacts of the factors on the decision of thelocation are explained in detail for the better understanding. And the impact of currentlocation of the company in the future expansion is also given. Therefore, the secondaryinformation has been used which has been taken from the various research papers andthe articles.PART 1:Product Movement and Supply Chain Network The Coca-Cola Company is a unique and distinct system of supply chain managementas the company yields syrup concentrate which is further sold to the bottlers across theglobe. The company possesses the anchor bottler by the name Coca-Colarefreshments in North America. The other bottlers who have the contract with the Coca-Cola Company generate the finished products in bottles and cans from the concentratein amalgamation with sweeteners and filtered water (Hofmann, E. 2013). After theproduction, the beverages are moved to sales and distribution centers by using the fleetof the bottlers of the commercial vehicles. The centers of the distribution areaccountable for managing and storing the inventory consisting of distinct SKU and thendispatch them off to the retailers. Further, the bottlers sell, assort and merchandise theproduct of Coca-Cola to the retail stores, restaurants, vending machines, distributors offood and service. The network of the supply chain is classified into various different

levels. The company has ERP systems in order to trace the variation regularly at theglobal price (Johnsen et al., 2014).The below given diagram will clearly help in understanding the product movement byanalyzing the supply chain network of the company Coca-Cola and being an individual Iwill mainly focus on the warehouse like the company also focuses on the warehouse sothat the products are delivered on time to both the distributors and the buyers withoutgetting damaged. (Nahmias et al.,(2015).Source: ("Manufacturing Global - Manufacturing Magazine & Website - Manufacturing News", 2016)Warehouse Facilities and Inventories The Coca-Cola Company has unique facilities in the warehouse. The technology ofRFID enables the real time tracing and tracking of the goods and this helps incontrolling the inventory. The company is using automated warehouse rather thanconventional warehouse and the storage capacity is 40 percent more in automatedwarehouse. The automated warehouse helps in reducing the energy and it is beingconserved. The company handles the products with an ease and there are less chancesof damage to the products and there is no damage because of the human error. Thecompany requires less maintenance cost than the standard machinery in order to

manage and maintain the warehouse. The company requires less workers in order tomanage the various operational activities (Rushton et al., 2014). Further, there is areduction of carbon footprint of the complete operation. The finished products which thecompany looks after are juices, sweeteners, energy and sports drink. In order to addconcentrates they buy carbon dioxide, cans, plastic bottles, closures, etc. Theygenerally buy raw materials, mineral water, syrups, etc. from various suppliers. Thecompany orders the raw materials when the cost of the raw materials is not high and thecompany is able to recover the cost from the customers by deciding the priceaccordingly. The Coca-Cola Company has the specialists in order to control andmanage the inventory. The specialists manage the merchandise things and items whichare in transit and on hand. They perform various activities like manage returns, requiredadjustments, validating the merchandise and further implement the reporting strategiesof inventory. The company uses periodic inventory review as it minimizes the time andthe manager is able to spend more time on analyzing the counts of inventory. Thecompany uses EOQ model to re- order the raw material as it helps in determining theright quantity for the inventory. The company uses EOQ model helps in reducing thecost of variable inventory the company uses setup cost, demand cost, production costand interest rate in order to calculate EOQ ("Coca-Cola Singapore", 2016).From the below given diagram, it can be easily understood that how the warehousefunctions in order to ship the products to the retailers.

Source: ("LogisticsManagement", 2016)Further, the raw materials and the packaging of the Coca-Cola company has declinedfrom the 2014-15. The finished good of the company also declined from the year 2014-15 and as result overall inventory has declined from the year 2014-15. The below givenis being taken from the annual reports of the company, and the values are in USD $ in amillion.Source: ("annual report", 2016)Usage of Intermodal Choice This section will help in understanding the comparative analysis between the variousintermodal choices. The Coca-Cola Company uses three types of transportation and thefirst one is the trucking intermodal choice. As the company uses this transport in order

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