Strategies for Improving Supply Chain Efficiency in Coca-Cola

The Coca-Cola Company has implemented effective management strategies to resolve the complexities of its supply chain. The company uses high-end technologies such as Enterprise Resource Planning (ERP) to enhance warehouse management and track sales, manage inventories, and respond to customer requirements in real-time. To remain competitive, the company needs to adopt new technologies, including cloud-based storage and order streaming. Cloud storage can help solve data storage challenges, while order streaming can automate stock management, reduce material waste, and improve customer service levels.

Running head: COCA-COLA
Logistics Management
[Coca-Cola]
Name of the student:
Name of the university:
Author note:

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Executive summary
The paper is on the logistics management. The paper has produced some useful points using
which the companies such as Coca-Cola could further its improvement in logistics service.
Readers would also come across some strategies that are parts of this paper. Readers would
get ample of opportunities to understand the importance of inventory management.
Moreover, this is a complete guide for how to manage the logistics network effectively.

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Table of Contents
Introduction................................................................................................................................3
The interfaces.............................................................................................................................3
Order cycle.................................................................................................................................5
Inventory management...............................................................................................................7
Conclusion..................................................................................................................................9

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Introduction
Logistic is an important part of a business operation that facilitates the intake of
required raw materials. The concept for logistic operation is not new but it has now
intensified largely. The advent of globalisation is one of those factors that have elevated the
demand for logistic operation. To take advantage of the created opportunities, it was
necessary that different logistic companies explore their credibility to generate a source of
business. However, the logistic operation itself requires a proper planning before
implementing it to roll out the business. Such strategy includes but is not limited to such as
hiring the required transport mean. A company can hire a third party service provider for its
logistic operation or it can also have its own logistic centre (Marri, Irani & Gunasekaran,
2006).
The chosen organisation for this assignment is Coca-Cola, which is the largest brand
in soft drink industry. The company had maintained its supreme position in the international
market with its utmost creative skills from nurturing its employees with the help of training &
development to satisfying the global consumers with wide range of soft drinks. The company
is not only limited to the production of soft drinks but it has its own logistic operations as
well. With the help of Center of Excellence (CoE) in Distribution and Logistics, the company
has redefined its own standard for customer service (Barkay, 2013).
The main purpose of this assignment is to analyse the intermediary connection
between the logistic operation and the three other core functional areas of Coca-Cola such as
marketing, production, finance & accounting.

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The interfaces
Logistics can be referred to an art of supply chain management and the science of
movement that include but is not limited to such as flow of goods, information etc. It includes
various operations such as inventory management, transportation, warehouse management,
material handling and packaging (Oliskevych, 2015). There is a strong connectivity of the
three most important operational sectors such as production, marketing and finance with the
logistic operation of the Coca-Cola Company. The logistic operation of the company while
receiving the required materials and delivering the prepared drinks to the market influences
the financial department of the company significantly. The purchased materials are received
through logistic operation by means of any transport mean. In such system, the company
needs to pay a significant wages to the drivers. Additionally, they also need to pay the wages
to the third party who all is providing their vehicles to the company on a lease basis. Every
single trip would attract expenses on fuel used in the vehicle. On the other hand, the
manufactured soft drinks are then sent to the market, which incurs a significant amount on the
logistic operation. Additionally, the revenues that the supplied unit generates speak of the
volume that the operation has on the financial cause. It has no direct contribution in
generating the revenues, as it is the product quality, which is doing things for the company.
However, it is undeniable that product can never be transferred to the market if it does not
have an effective logistic network (Rushton, Croucher & Baker, 2014). It very much signifies
that logistic operation has its significant influence on the financial sector of the Coca-Cola
Company.
Marketing is another sector, which is also influenced by logistic operation.
Marketing is of various kinds such as promoting the products online, advertising it on the TV
or doing physical campaigning. The physical campaigning would require the vehicles, which
would supply people from one end to the other. The supply of people is also one of the parts

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of the logistic operations. Marketing is a very important process, which helps to establish the
brand image or popularise a new concept. Popularising a new concept is of high importance
for successfully implementing a new product in the market (Christopher & Peck, 2012).
Production depends highly on the logistics network. The product required for the
production of soft drinks is supplied to the production centre of the Coca-Cola Company
through logistic operations. The required materials would never reach the production centres
if it does not have a wide spread logistic network. Consequently, this would disrupt the
project and also the revenues. Logistic operation in fact is the primary stage after which the
company manufactures the different range of soft drinks. The importance of logistic
operation to the Coca-Cola Company can well be understood with a fact that it has its own
logistic operation. Coca-Cola is one of few companies to resolve the complexity of supply
chain. It has mastered the supply chain with its own logistic network and operation (Khabbazi
et al., 2013).
Order cycle
Figure 1: Order Cycle

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(Source: Yu, Wang & Liang, 2012)
The order cycle of the Coca-Cola Company is very traditional in its approach. The company
follows the linkage of retailers, dealers and the company in the ascending orders while
receiving the orders, which means that the retailers first deliver orders to the dealers.
Furthermore, dealers deliver the orders to the company. On the other hand, the manufactured
products are then sent to the market through the logistic network. The products are then sent
to the market with the help of dealers and then the retailers. However, the order cycle
involves much more processing than it just looks. They manage inventory on a daily basis.
The unsold and damaged merchandise is then replaced with the new ones. Inventory
management is done with the help of few technologies such as A/C Keeping, Complaint
Handling and Stock Keeping. Once the order has been generated, it is then sent to the market
to its dealers through the different transport means (Barkay, 2013).
The order cycle in the Coca-Cola Company starts with the responses of customers,
which is observed through its retail sales. The sales figures are calculated based on the
demands of retailers. Dealers of the company then communicate the sales behaviour to the
company. After which the company generates the production of product depending on the
orders. The manufactured product is again sent to the customers through the dealers and then
the retailers. The used bottle in this purpose is recycled by collecting those at the retailing
point while delivering the next order. The service strategy has produced much success to the
company in numerous parts of world. However, the strong competition from Pepsi can
anytime hamper the growth of the company. With the advent of globalisation, accessing the
resources in the different parts of world has now become relatively easier. This is why it is
important for the company that it updates its technology with the passage of time in order to
be competitive. The Coca-Cola Company has mastered the supply chain; in fact, it is one of
few companies, which has been successful in resolving the complexity of supply chain

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(Yadav, Stapleton & Van Wassenhove, 2013). Despite the fact, it is still necessary to
implement some strategy to further enhance the customer service standard in order to
maintain the gained status.
There is a space for improvement in every organisation. Coca-Cola does also need an
enhanced strategy to further the customer service standard. It is being observed that logistic
companies have less surveillance on the drivers. In some parts of world, they are also
illiterate. It is very challenging to have a secured and timely supply of products. Drivers
might delay the supply for no such valid reason and the company would then have no clues
whatsoever to trace the actual cause. It is because of the fact highly recommended to take
the drivers under regular surveillance in order to trace their movement. The surveillance can
be done with the help of GPS enabled service in the transport vehicle. This would help the
company follow up the proceedings of the outbound logistics. Moreover, this would also
ensure a timely delivery of products, which is very necessary to enhance the customer service
standard. The GPS technology would provide a real time movement of the particular vehicle.
This would also encourage drivers to be cautious while they are supplying the goods. This
would improve both the performance of drivers and the quality of service (Aziz et al., 2016).
Inventory management

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Figure 2: Theory of Inventory Management
(Source: Chen & Simchi-Levi, 2012)
Theory of inventory management is related with the entire process from collecting the
materials to stocking it and then utilising the stocked materials in manufacturing the products.
In the warehouse, there are many much things, which are needed to put under the supervision
of strategic planning to enhance the control on the inventory management. It is never safe to
wait for the orders and then deliver it as this would put pressures on the workforce and may
even demand extra works from them. Moreover, any shortcomings would give place to hire
more workforces to respond to the urgency. This would elevate the investments and would
consequently reduce the profit margin.
The Coca-Cola Company is one of those companies to have an effective management
strategy to resolve the complexities of supply chain. The company uses high-end
technologies to improve the efficiency of its supply chain. The use of Enterprise Resource
Planning (ERP) to enhance the efficiency levels of its numerous warehouses across the globe
simply proves their creative nature. The use of ERP helps to improve the warehouse
management. Additionally, they have a system, which has capabilities in such to track the
sales, manage the inventories and respond to the customer’s requirement in real time.

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However, it is necessary to adopt some technologies that could help the company reduce the
risk to deploy larger than the required labours on work. This would reduce their total
spending costs and would also reflect on saving the inventory from any wastage of materials
(Elmore, 2014).
However, to be competitive in the market and to keep the dominance it has in the soft
drink industry, it is necessary that the company updates it with the latest and promising
technologies. The first recommendation would be for the cloud based storage. Data storage
is a challenge, which could well be solved with the help of cloud based storage. The cloud
based storage would allow storing much more data. Moreover, this would transform all the
manual works for noting down the storage to robust solution Cloud storage. Order steaming
is the one strategy that could enhance the efficiency level of the inventory management. It is
also useful in most cases such as in saving the extra investments, which can occur in case of
increased work pressure. Order streaming would automate the stock management. This does
not allow the wastage of various materials. Consequently, this would enhance their customer
service level as well (He, Y., & Zhao, 2012).
Conclusion
Logistic management is a complex task, which could have only been solved by few
companies like Coca-Cola. It is the world’s largest companies in the soft drink
manufacturing. The company with its utmost strategies has acquired control on almost all the
involved process in logistic management. However, there is always some space to further the
existing business strategies. The Coca-Cola Company needs to have surveillance on its
drivers to enhance its control on them. Consequently, this would also improve the product
delivery system, which is very effective in improving the customer service standard. The
company should also take use of the urgent situations such as data storage, which can be

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resolved with the help of cloud storage system. Cloud storage would help in store big data,
which is very important to improve the customer service standard. Order streaming is another
technology, which provides a potential control on the data. The data can be operated with the
help of the technology. This would reduce the spaces for the inclusion of new labours to
reduce the incremented pressures on the group. Such technology would also reduce the
requirement of labours at the time of urgency. This is indeed a very healthy option to support
a fast wrap up off the demand. The demand and supply in such process would become more
streamlined and produce an effective management of logistics.

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References
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