Making the World’s Best Known Product

Transforming resources
This illustration shows how manufacturing operations convert inputs into finished outputs. Coca-Cola’s bottlers and canners are concerned with a range of processes involved in transforming resources into the bottles and cans of drink that we are familiar with. There is a difference between transforming resources and transformed resources: The transformed resources are the materials (the cans, bottles, liquids, etc.) and the information which are processed to create the finished product.

Packaging
For many years, Coca-Cola was produced in glass bottles. Because of the high cost of distributing bulky bottles, they had to be manufactured close to where the bottling took place. Today, this is no longer so important since new packaging methods have revolutionised the process. Advanced bottling and canning technology makes Coca-Cola cans and bottles very light but extremely strong. The Company has invested a lot of time and money in research and development to ensure the most effective life cycle impact of its packaging. By using the minimum quantities of materials in packaging, the cans and plastic bottles are simple to crush or to reprocess at the end of the initial life cycle.

INTRODUCTION
• How is the most widely recognised product in the world made? • How are the required quality standards met for every single unit of that product? This case study answers these questions by outlining the manufacturing processes for Coca-Cola - the most widely recognised global brand from London to Lagos, Los Angeles to Lahore. It is sold in more and more markets, creating thousands of new jobs in the local economies. The brand is owned by The Coca-Cola Company which works with franchisees across the world. These franchisees perform the bottling and canning operations and are also known as packagers.

Manufacturing Coca-Cola
Primarily, Coca-Cola is manufactured by franchisees who are the world’s leading bottling and canning companies. This franchise business is strictly controlled by The Coca-Cola Company. Soft drinks manufacture is a competitive business. Manufacturing techniques are continually improved. This helps meet the highest quality standards for its products using the most cost effective production techniques. For example, very small changes in the shape of the can could save a canning factory millions of dollars in production costs. The production of Coca-Cola involves two major operations: • creating the packaging material

like an open cup ready to receive the liquid drink. They are not fully formed because the ring pull end has still to be fitted. After they have been inspected to check that there are no faults, each can goes through a rinsing machine to make sure it is clean and ready for filling.

Preparing the drink
Coca-Cola consists of a concentrated beverage base and a liquid sweetener which are combined to form the syrup from which the drink is made. The Company ships the concentrate to bottling and canning plants where the franchisees mix it with sugar and local water. The water is passed through a number of filters to make sure it is absolutely pure. Carbon dioxide, which makes it fizzy, is also delivered to the canning plant where it is stored and then piped into the manufacturing process through a carbonator and cooler. The Company specifies what equipment franchisees will use to carry out these processes.

Samples are taken regularly for chemical analysis, and staff make frequent spot checks to ensure that plants are maintaining the Company’s standards of cleanliness and quality. The Company provides its franchisees with the most up-to-date technology available and many of them use the latest computer technology and statistical process control methods.

Filling the cans
The packaging and the finished drink are combined by a rapid filling process. Every minute hundreds of cans pass along an automated production line and are filled with a precise amount of Coca-Cola. As the cans move along the production line, they are seamed to include the ring pull end and produce the finished can. The ends are inspected to make sure they are smooth and do not have any gaps or leaks. An individual code is stamped on the cans so that each one can be traced back to the

INPUTS INTO OUTPUTS

TRANFORMING

Preparing to fill cans
Cans are delivered in bulk to a canning plant. At this stage the cans are shaped

• The transforming resources are the managers, employees, machinery and equipment used by The Coca-Cola Company and its franchisees.

• bottling and canning the finished drink.

Every employee sets out to satisfy customers and places them at the heart of the production process. Supply chain: The chain of processes that links a manufacturer through a distributor to a customer. the can maker is often located in an adjoining facility.GLOSSARY OF KORDS point and time of production. At the end of the bottling line. On a production line. such as raw materials and information. Conclusion To produce the world’s best known product. measuring quantities of materials used. Receiving the raw materials and delivering the finished products involves a complex sequence of actions. The bottling process. bottlers apply the labels from large reels once the bottles have been formed. Inputs: Materials and labour that go into a production process. right up to the time at which the consumer finally disposes of the packaging of the product. Franchisees undergo constant training and retraining in quality assurance. ‘Just-in-time’ reduces the need to carry large stocks of materials or finished goods helping cashflow. through the manufacturing process. employees are able to eliminate problems. Packing the end product into cases The canners then prepare the cans for distribution to retailers such as supermarkets. Canners and bottlers work closely with The Coca-Cola Company and other suppliers to provide a smooth running supply chain so that consumers are always within ‘an arm’s reach of desire’ and can always buy a drink when they want one. Total Quality Management lies at the heart of this process involving a continuous emphasis on getting quality standards right every time and on continually seeking new ways to improve performance. they also check that there are no faults in the packaging. Why does at least one of the inputs that you have listed have to be supplied to bottling franchisees directly by the Company? 2 Why is it possible to produce Coca-Cola using a continuous flow method of production? 3 Why is Total Quality Management such an important part of producing Coca-Cola? When does Total Quality Management take place in the production process? 4 Relate TQM to the concept of Kaizen. quality control personnel monitor the product and take test samples. Guaranteeing the quality of the product The manufacture of Coca-Cola is carried out by a set of processes called continuous flow production. For example. This is where they benefit from advanced information technology that rapidly relays figures about the demand for Coca-Cola. packaging or distinctive trade mark. is very similar. Continuous flow production takes this one step further by using computercontrolled automatic equipment to produce goods 24 hours a day. Canners and bottlers must ensure that they do not build up large stockpiles of cans waiting to be sold but they must also make sure that deliveries are not late. then it would be necessary to inform the packager so that these could be rectified immediately. The cans are stored temporarily in a warehouse before they are collected by large distribution trucks. a process is continually repeated and identical products go through the same sequence of operations. such as filling a can. Performance feedback: Providing information on the success of performances so that improvements can be made. Using chemical analysis. By continually seeking to improve every aspect of production.g. In order to guarantee these standards the Company has had to develop a close relationship with its franchisees based on a mutual concern for quality. Coca-Cola Company. sample bottles and cans from each market are tested regularly by The Bottling Coca-Cola So far this case study has focused on the canning process for Coca-Cola. checking that the can is sufficiently filled. Total Quality Management: An approach that ensures quality at every stage of production. The results are then reported back to the packagers. Continuous flow production: An ongoing twenty-four hour production cycle in which partly finished and finished products pass along a production line. this demand usually rises in periods of hotter weather so the packagers need to plan increased production. The packagers are involved in sophisticated supply chain networks with the supermarket chains and other outlets to ensure that this process runs smoothly. bottles are automatically sealed with a cap immediately after they have been filled. To guarantee that there are no errors. and the end product reaches the consumer just when it is wanted. This feedback helps The Coca-Cola Company and the franchisee to work together and identify opportunities for improvement. Just-in-time Canners and bottlers process vast quantities of materials each week. Outputs: Goods and services that are produced once raw materials have gone through a transformation process. in return for a fee. quality control inspectors take statistically selected samples at the end of the production line. these inspectors can guarantee that the product meets the exact specifications. Franchisee: An individual (or organisation) that is licensed to produce and/or sell a named product in a given area. and can always ask for help and advice about ongoing improvement. The cans now look like those you will see in the shops. rather than just at the end of the production cycle. Operations: The processes involved in the production of a product. a share of the profits or sales. etc. that are modified in the process of production by the transforming resources. Cans that are not properly filled are rejected. Statistical process control: The use of mathematical and statistical control processes in the manufacture of products e. Transformed resources: Resources. Cost effective: An approach that minimises or significantly reduces the cost of operations. etc. A date code ensures product freshness. A ‘fill height detector’ uses an electronic eye to ensure that the cans are filled to the right quantity. Life cycle impact: Examining the impact of a product from the point at which the raw materials start to be produced and assembled. if a weakness is spotted in quality standards. Each plastic bottle starts as test-tube size and is blown up like a balloon into the final bottle shape. Whereas franchisees receive cans that already have the logo and any promotional details on them. 5 Explain JIT through three examples drawn from the world? . by measuring quantities of fluid used in given processes. Global brand: A product that is recognisable across the world by its logo. A machine called a case former creates the casing that protects the cans as they are sorted onto pallets. with delivery through a ‘hole in the wall’ operation. to ensure that inputs and outputs always meet specified quantitative standards. The ideal solution is to make sure that the inputs for the process arrive ‘justin-time’ so they can be transformed into a finished product ready for transportation ‘just-in-time’ to meet the needs of the retailers. The Company and its franchisees use Total Quality Management procedures that encourage everyone in the plant to think about quality in everything they do. Just-in-time: Supplies for manufacturing processes are received just as they are needed. For example. shops and garages. At modern canning plants. Performance feedback to canners and bottlers In addition to each canner or bottler’s own quality assurance procedures. Transforming resources: Resources that are used to transform other inputs. The Coca-Cola Company has to employ the highest quality processes and establish standards which guarantee the production of a standardised product which meets consumers’ high expectations each and every time they drink a bottle or can of Coca-Cola. Throughout the production process. whether in glass or PET (plastic). QUESTIONS 1 List four inputs and four processes that are involved in producing a bottle or can of Coca-Cola.

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