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Paris Graduate School of Management

Operations Management BBA


Assignment Case Study (Coca-Cola)
Coca-Cola was created by a pharmacist. The name Coca-Cola comes from coca leaves
and cola fruit, two components of the Coca-Cola drinks. Since its beginning in the spring
of 1886, Coca-Cola has grown to become the most recognized trademark in history. The
company is the world's largest beverage company providing consumers with more than
500 brands. Led by Coca-Cola, one of the world's most valuable and recognizable brands,
the company's portfolio features 16 billion-dollar brands that include Diet Coke, Fanta,
Sprite, Coca-Cola Zero, vitamin water, Powerade, Minute Maid, Simply, Georgia and
Del Valle.
Through the world's largest beverage distribution system, consumers in more than 200
countries enjoy the beverages at a rate of more than 1.8 billion servings a day. Coca-Cola
is the most popular beverage on earth. With an enduring commitment to build sustainable
communities, the company focuses on initiatives that reduce environmental footprint,
support active, healthy living, create a safe, inclusive work environment for their business
/ system associates, and enhance the economic development of the communities where
they operate. Seeking to empower 5 million women entrepreneurs by 2020, they expand
the 5by20 initiative from 4 countries to 12: Brazil, China, Costa Rica, Egypt, Haiti, India,
Kenya, Mexico, Nigeria, the Philippines, South Africa, and Thailand.
Together with their bottling partners, they rank among the world's top 10 private
employers with more than 700,000 system associates. The company and its subsidiaries
employ nearly 31,000 people around the world. Syrups, concentrates and beverage bases
for Coca-Cola, the flagship brand, and other soft-drink brands are produced by the
company, while its partners will manufacture, package, merchandise and distribute the
final branded beverages to the customers and vending partners, who then sell the products
to the individual consumers.
Operations Management
Operations at Coca-Cola involve the management of the organizations resources;
production system; deal with the design and management of products, processes, services
and supply chains. It considers the acquisition, development, and utilization of resources
to deliver the goods and services to the consumers. The companys management ranges at
strategic, tactical, and at operational levels. Strategic issues include determining the size
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and location of manufacturing plants; deciding on the structure of service and
telecommunications networks; and the design of the technological supply chains.
Tactical issues include plant layout and structure; project management methods; and
equipment selection and replacement. Operational issues include production scheduling
and control; inventory management; quality control and inspection; traffic and materials
handling; and equipment maintenance policies. Operations management focuses on the
careful management of the processes to produce and distribute the products and services.
Coca-Cola has production system and bottling facilities located around the world. One of
the companys greatest strength lies in the ability to conduct business on a global scale
while maintaining a local approach. More than 250 independent bottler companies around
the globe produce and sell the companys soft drinks within the allocated geographic

boundaries. The bottling plants are, with some exceptions, locally owned and operated by
the independent companies that are native to the nations in which they are located.
Bottlers provide the required capital for investments in land, buildings, machinery,
equipment, trucks, bottles and packaging. Most raw materials are purchased from local
sources, often creating new supply industries, and areas of employment in the local
economies. The company supplies the concentrates to manufacture the products. It
provides management assistance to guide its bottlers in ensuring the profitable growth of
the business. The production system ensures that the highest quality and uniformity
standards are maintained by the bottlers. Product manufacturing, quality control, plant
and equipment design, marketing and personnel training are some of the areas in which
the company shares its expertise to its business associates. The strong commitment of the
bottlers to achieve their business growths helps to meet Coca-Colas global strategic
goals in terms of worldwide production, distribution and marketing.
Management Structure
The companys management structure consisted of five geographical groups, and the
Minute Maid division.
1. North American: comprises the U.S. and Canada.
2. Latin America: includes the Companys operations across Central and South
America, from Mexico to Argentina.
3. Greater Europe: from Greenland to Russias Far East, including some of the most
established markets in Western Europe and the rapidly growing nations of East and
Central Europe.
4. Africa and Middle East: the Companys most populated operating group
encompasses the Middle East and the entire continent of Africa.
5. Asia Pacific: operations from India through the Pacific region including China, Japan
and Australia.
6. Minute Maid Company: the companys juice business is located in Houston, Texas.
It is the worlds leading marketer of juices and juice drinks.
In January 2013, the company implemented a new organizational structure of three
operating businesses: Coca-Cola Americas, Coca-Cola International and Bottling
Investments Group. This is part of their continuous improvement exercises.
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Operating Structure
To stay current with new governments regulations, industrys best practices, and
marketplace conditions, the company consistently reassesses the relevance of the
requirements and guidelines in manufacturing, and the entire supply chain. They
continually refine the requirements to further insure that the bottlers conform to the most
recent and stringent manufacturing processes. To establish a governance process, every
bottler has to implement the documentation system and maintain a safety and quality
system in accordance with the companys requirements. They have launched a
productivity and reinvestment program to create $550 million to $650 million in annual
savings by 2015.
Ensuring the safety and quality of the products have always been at the core of the
business and is directly linked to the success of the company. The company's Global
Product Quality Index rating has consistently reached averages near 94 since 2007; with a
94.3 in 2010; while the Company Global Package Quality Index has steadily increased

since 2007 to a 92.6 rating in 2010, their highest value to date.


Strategy
The companys strategy has been characterized as: global marketing and local
manufacturing. However, the global marketing approach has been changed to local
marketing because of the differences in consumer demands and experiences. To
implement their think local, act local philosophy, the following key areas are
considered:
Consumers by using innovative and tailored marketing programs based on local consumer
insights, the company will keep growing its core brands while also leveraging its distribution
system to capture other growth opportunities in the ready-to-drink nonalcoholic beverage
category.
Communities local offices around the world ensure that the company is a respectful corporate
citizen and participates as an integral part of each community.
Customers (business associates) the Company provides value to customers through
every consumer purchase, through superior customer service and through great value
creation programs.
Coca-Cola System the system business model delivers value to the company and to its
bottling partners. By working together, the system focuses on growing the overall profits
from the beverage category in order to provide strong returns. To achieve a safe working
environment, the company implements a rigorous set of controls to manage the
operational risks in the infrastructures, and manufacturing processes. The company also
sets up an internal audit process in ensuring the effective implementation of the
operational controls and management routines. They engage recognized external audit
firms to assess the compliance status of the manufacturing operation with applicable laws
and regulations; company occupational safety standards; health regulations; and lossprevention
strategies.
The company knows product and package quality are crucial in ensuring that the products
conform to all the legal and technical requirements; and the consumers demands. The
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global nature of the business requires that the Coca-Cola System has the highest standards
and processes for ensuring consistent product safety. Coca-Cola has a lot of vending
machines, both new and reconditioned ones that are placed at various remanufacturing
facilities in the U.S.
Sources:
www.bloomberg.com/news/2013-12-13/coca-cola-ceo-shakes-up-management-to-speed-u-sbottlingrevamp.html
www.coca-colacompany.com
www.ukessays.com/essays/business/project-report-operation-management-in-coca-colacompanybusinessessay.php
Edited by: Roger Yap, (Ed.D.)

Assignment Questions
1. Evaluate two aspects of operations management that Coca-Cola selected to
implement its global strategy. (10 marks)
2. The company engages its bottling business associates to manufacture the products
across the globe. Describe two strategic reasons for it to do so. (10 marks)

Instructions for Coursework

1. The coursework should be done on an individual basis.


2. The total words for both the questions are approximately 2,500 words. They should
be equally distributed between them.
3. The assignment must be typed in Times New Roman; 1.5 line spacing; and 12-point
font size. Pages must be numbered.
4. The assignment cover must include the students name, ID, subject, title and
lecturers name. Do not use plastic sheet for the cover. Stapling of papers is
required.
5. Use Harvard system to cite references.
6. Assessment criteria for coursework will be based on:
a. Secondary research via the Internet is essential.
b. Style, structure and coherency.
c. Depth and width of knowledge.
d. Critical analysis.
e. Language and grammar.
f. Creativity in content.
g. Reference page is required.
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Plagiarism
Plagiarism is not acceptable in any form. It includes:
1. Deliberately copying another students work.
2. Copying directly from textbooks and other sources without using quotation marks.
3. Not acknowledging the sources you have used in your work (i.e. you must cite the
reference).
4. Re-submitting an assignment used in one course as an original piece of work for
another course.
5. Work, which shows evidence of plagiarism, will be penalized in line with the
seriousness of the case. This may involve work being returned unmarked. In
extreme cases, the University academic disciplinary procedures may be invoked.