coca cola truckThe Coca-Cola Company is among the biggest corporations in the world. More than 1 billion bottles of Coke and other beverages of the company are sold every day. The company is present in most of the major countries of the world. Its success in serving its customers in the past 120 years rests heavily on its success in supply chain management.The company, in order to streamline its supply chain management, has tried to keep the number of its bottling plants limited. The bottling plants of the company in America and other markets are often owned by other companies, mainly local ones. By keeping the number of bottling plants limited, Coca-Cola is able to monitor its supply chain more effectively.

 

In 1960 there were around 1000 bottling plants of Coca-Cola globally; in 2015 this number has come down to around 700.The company continuously strives to integrate demand with supply. Demand forecasts are made on the basis of regular interactions with the sales & marketing teams. These interactions take place on a daily and weekly basis. The demand forecasts are immediately conveyed to suppliers.

 

The transport division and other external transporters involved in movement of outbound logistics are also kept in the loop with regard to demand forecasts, so that they have transportation and resources ready to arrange transportation for meeting the demand. On the basis of this forecast the company also plans its production and operations. Inventory management process is also informed by this forecast.

 

It is not possible for Coca-Cola to make 100 per cent accurate demand forecasts. So it remains content with a demand forecast accuracy of 80%-to-85%. Actually most of the times, the demand forecasts are only as accurate as 70%. The difference between actual demand and demand forecast is met by Coca-Cola through a flexible supply chain management. This enables it to meet unexpected demand or shortages in relatively less time.

 

Supply chain management in Coca-Cola is a highly dynamic process. The supply chain management team remains constantly on its toes. The company has made supply chain management one of its main sources of competitive advantage. The company also retains its ability to implement course corrections every day in its supply chain. So in spite of having highly systematic supply chain processes in place, the supply chain of Coca-Cola is also highly fluid and flexible. Almost as fluid as Coke itself!

Gaurisha (2 Posts)

B.com graduate from Gargi College-Delhi University, 2 years experience in Marketing and Sales. Currently working as Assistant Manager (Marketing & Sales)


4 thoughts on “Lessons in Supply Chain Management from Coca-Cola Company

  1. B.A graduate from Kulti college Burdwan University ,11 years experience in Warehousing & Sales currently as Warehouse manager In Rudra Autoparts Distributor as a Stockiest of Hero Moto corp in west bengal

  2. I am working in Taj Hotels and looking after purchase for Bangalore,
    I have a very bad experience with Coca Cola as we never use to get our supply on time and as per our order we use to get only 50-60% of our order and most of the time product like diet and regular coke can are not available with them and in market too. So I don’t think that there supply-chain that much effective

    • Hi Shashank, experiences can vary from country to country. This post is more in the context of US than India. Maybe you should escalate the issues in Coca Cola India so that they can be resolved. Would be very surprised if they do not correct the situation given than Taj is a very respectable client.

  3. Hi ! I’m sushil . my qualification is B.Sc. (physics , mathe) in 2014. Form ram manohar lohia avabh university faizabad.can I join I act .my contact number 8750355992

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