Operations management of Coca Cola: Applying the model

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Essay for Operations Management CONTENTS ChapterPage 1. Summary3 2. Introduction4 3.

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First main section5 4. Second main section8 5. Conclusions10 6. References11 7. Appendices12 1 SUMMARY 1.1 Coca Cola is one of the most valuable and well known retailers in the world. The secret to its success comes from its focus on its supply chain, which is made as efficient as possible through the use of ERP systems and integration up and down the chain. This boosts its financial efficiency and improves its customer service. Fizzup can potentially experience similar benefits to Coca Cola, but will need to use change management techniques, cost benefit analyses and significant training in order to realise said benefits. 2 INTRODUCTION 2.1 This report was prompted by the belief that Coca Cola is one of the most efficient and valuable companies and brands in the world, and hence Fizzup, as a small manufacturer and distributor of soft drinks, could benefit from Coca Cola’s expertise. The main reason for Coca Cola’s success appears to be its efficient distribution system, which allows the company to sell over 1.4 billion servings of its product every day. As such, this paper aims to examine the extent to which the factors which have caused Coca Cola’s distribution system to be so successful can be applied to Fizzup. In order to achieve this it is, of course, necessary to determine the factors that actually differentiate Coca Cola from its competitors. 3 THE COCA COLA SUPPLY CHAIN 3.1. OPERATIONS WHICH DIFFERENTIATE COCA COLA The main part of Coca Cola’s operations which act to differentiate the company is its focus on logistical efficiency throughout the distribution section of its supply chain (Foley and Kontzer, 2004). With 1.4 billion servings of Coca Cola purchased every day around the world, including Diet Coke and other varieties, it is clear that this supply chain is extremely large and complex (Parker, 2007). As such, Foley and Kontzer (2004) claim that Coca Cola is unparalleled in its ability to efficiently manage the delivery of Coke to stores and retail outlets around the world. A key part of this is Coke’s drive to provide new capabilities to tis account managers, merchandisers and delivery drivers, through the use of a coherent SAP suite across the entire business. This not only provides Coca Cola with more information at an individual store level, but also helps eliminate inefficiencies and automate the distribution process from Coca Cola right through to the end retailer. Indeed, Coca Cola uses a single form of SAP throughout its entire manufacturing supply chain in all forty five countries, providing massive consistency benefits. However, all the company’s beverages are distributed through franchise agreements with 53 bottlers around the world, whom Coca Cola only supplies with post mix syrup and other ingredients (Thomas,

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