Operations Strategy: Quality and Location Management at Coca-Cola

This essay examines how Coca-Cola aligns its operations management decisions, particularly concerning quality and location, with its overall business strategy. Coca-Cola emphasizes stringent quality control and assurance processes, utilizing advanced technology to monitor production aspects like formula consistency, production speed, and bottle quality, adhering to the Coca-Cola Operating Requirements (KORE) system to maintain high standards in health, safety, and environmental practices. Regarding location decisions, Coca-Cola considers factors beyond traditional cost and market access, focusing on quality of life and skilled labor availability, leveraging regional trading blocs like ASEAN and NAFTA for manufacturing presence. The company employs various firms for location analysis to ensure compliance with required standards, facilitating effective inventory management and product distribution. By effectively managing these operational decisions, Coca-Cola has sustained its position as a leading global beverage brand, ensuring product safety and quality to maintain consumer trust. Desklib provides study tools and resources for students.

Operations Management 1
Operations Management
Student Name
Name of the Course
Professor Name
Name of the School
City or State located
Date

Operations Management 2
Coca-Cola company is regarded as a large global marketer, distributor and manufacturer
of non-alcoholic drinks since it has close to four hundred brands (Lubin, and Esty, 2010, pg. 44).
As a global company, Coca-Cola’s success is based on the efficient alignment of the company’s
operations management decisions with the company’s overall strategy. This essay will primarily
focus on how two of the operations management decisions align with the overall strategy of
Coca-Cola. The operations management decisions include managing quality and location.
To begin with, Coca-Cola handles both quality control and assurance in its production
process very strictly. Quality control primarily focusses on the production line while quality
assurance is focused on the entire operations functions and processes. In Coca-Cola, state of the
art computers manages both quality control and quality assurance by checking all aspects of
production such as consistency of the formula, speed of production, labelling of bottles, filling
levels of bottles, creation of bottles, and quality checks. This helps ensure the product quality
demand are met. Besides, quality control and assurance help reduce and avoid the risks of
defective products since any problems are solved during the production process.
In supplies, quality assurance ensures the goods supplied to Coca-Cola are of high
quality. For example, the sugar supplied to Coca-Cola by Tate and Lyle. Quality assurance in
supplies has ensured Coca-Cola has no problem with its suppliers. Besides, quality management
is a core decision in the operations management of Coca-Cola and therefore, in order to ensure
consistency and reliability, Coca-Cola’s operations are also governed by a system known as the
Coca-Cola operating requirements. The system addresses various aspects such as the integrated
quality management program and also the growth plans of the company. The system, abbreviated
as KORE, seeks to achieve high-quality standards in health, product quality, safety, and
environmental standards.
Coca-Cola is strict concerning the standards of product safety since it’s a crucial
company strategy that Coca-Cola upholds. Besides, the company follows stringent ingredient
and product standards so as to ensure the quality and safety of its products. Staying updated with
new regulations and industry best practices has allowed the company to ensure the quality of its
products (Journey Staff, 2012). As a result, the company remains to be the undisputed and largest
beverage company globally.

Operations Management 3
In addition, Coca-Cola drives both quality and safety compliance through unannounced
company audits in all its facilities around the world (Journey Staff, 2012). This helps keep the
facility in check and also “audit-ready” thereby being compliant with the core standards. The
company also evaluates risks since they can create unexpected impacts. Through the certification
of suppliers, under recognized standards such as the Global Food Safety Initiative standard,
quality and food safety assurance is kept in check.
Secondly, location is an important decision for business functions since it plays an
essential part in the supply chain strategy of any business (Schotanus, 2013, pg. 726). For Coca-
Cola, the location decision remains to be a crucial element. However, due to changes in the
global business environment, including the change in production systems and technology and the
rise of regional trading blocks, Coca-Cola has adopted new trends in manufacturing location
decision. For example, regional trading blocs such as ASEAN and NAFTA have been crucial in
assisting Coca-Cola to establish a manufacturing presence in different regions (Huda, 2016).
This is by providing advantages such as free trade and avoidance of regulatory barriers.
In making the location decision, Coca-Cola understands the importance of quality of life
factors rather than other traditional factors such as costs and markets access (Huda, 2016). Coca-
Cola has now shifted to a more knowledge intensive focus and high technology. Therefore, more
dependence is on skilled labor rather than unskilled cheap labor. Besides, the company
understands that locations that attract skilled labor are prone to succeed in the future. However,
inefficient locations result to excess costs in the lifetime of facilities in the location.
Coca-Cola’s overall strategy is to remain the largest both global and local beverage
brand. Therefore, the location decision directly impacts the overall strategy of the company.
Besides, inventory management is also dependent on the location of Coca-Cola’s facilities.
Hence, when conducting a location analysis, Coca-Cola frequently uses different firms so as to
come up with the perfect decision (Huda, 2016). Such firms include; accounting firms,
investment banks, economic development agencies, consulting firms, and investment promotion
agencies. Besides, Coca-Cola considers a wide range of other factors so as to ensure the location
or region they are to establish manufacturing facilities comply with all standards required.
The location also allows for the distribution of Coca-Cola products much effectively
hence ensuring inventory is managed well (Adeyemi and Salami, 2010, pg. 139). For example,

Operations Management 4
Coca-Cola inventory does not spend much than a week in the manufacturing facilities. This
ensures better inventory coordination in the facilities.
In conclusion, quality and location are key operation management decisions that may
assist a business to grow or fail. Therefore, when effectively aligned with a company’s overall
strategies, efficiency is assured. Coca-Cola has proved its growth and success through managing
its operational management decisions much effectively. Besides, since a large group of people
highly consumes the company's products, any flaw in safety and quality measures may cause a
massive blow for the company. Therefore, the company is always on toes to ensure high-quality
management of operations.

Operations Management 5
References
Adeyemi, S.L. and Salami, A.O., 2010. Inventory management: A tool of optimizing resources
in a manufacturing industry a case study of Coca-Cola bottling company, Ilorin Plant. Journal of
social Sciences, 23(2), pp.135-142.
Huda, N. (2016). PROJECT REPORT ON LOCATION ANALYSIS OF COCA-COLA
COMPANY. [online] Academia.edu. Available at:
http://www.academia.edu/25339519/PROJECT_REPORT_ON_LOCATION_ANALYSIS_OF_
COCA-COLA_COMPANY [Accessed 11 Nov. 2018].
Journey Staff, (2012). The Coca-Cola Company - Quality. [online] The Coca-Cola Company.
Available at: https://www.coca-colacompany.com/stories/quality [Accessed 10 Nov. 2018].
Lubin, D.A. and Esty, D.C., 2010. The sustainability imperative. Harvard business
review, 88(5), pp.42-50.
Schotanus, F., 2013. Operations management: sustainability and supply chain
management. Journal of purchasing and supply management, pg. 276.