BIT247: Supply Chain Analytics

Assignment 2
Executive summary
Supply Chain Management refers to the management process of the business that is
interconnected which involves the provision of services and product packages purchased by
the final customers. The SCM of a company plays a major role in the development of
products to present it to the targeted customers. SCM has been found to assist a lot in
business development, as suppliers are attached entirely to this core entity of SCM. This
report will discuss the importance of supply chain management of Nike and Coca cola Amatil
and the various models that are used by them and about different types of customers and
suppliers of the organisation. This report will describe both the organisation, compare its
supply chain management and provide a detailed analysis and recommendations of both the
organisations
Table of Contents
Introduction................................................................................................................................4

Description of Nike....................................................................................................................4

Description of Coca Cola Amatil...............................................................................................5

Comparison of Supply chains....................................................................................................5

Literature Review.......................................................................................................................6

Analysis of Nike.........................................................................................................................7

Recommendations and Conclusion............................................................................................7

Analysis of Coca Cola Amatil....................................................................................................8

Recommendations and Conclusion............................................................................................8

References................................................................................................................................10
Introduction

Supply Chain Management refers to the management process, which involves the delivery of
services and products packages purchased by the final customers. Proper implementation of
Supply chain management (SCM) helps in a reduction in the usage of the fixed assets, which
increases the profit earned by organisation. This report will discuss the importance of supply
chain management, the various models that are used by the chosen business organisation and
different types of customers of the organisation. The two business organisations that are taken
into consideration in this report are Nike and Coca cola. This report will describe both the
organisation, compare its supply chain management and provide a detailed analysis and
recommendations of both the organisations.

Description of Nike

Business model

Business model refers to the validation of valuing the process of delivering the products and
services of a business organisation in contexts to its economic, cultural, social environments.
A business organisation needs to implement an effective business model for conserving its
sustainability in the competitive markets. The business model developed by Nike is known as
Mass Market where no discrimination or differentiation is practiced with the customers. Nike
mainly focuses on the niche market and differentiation of products as its competitive
strategies for strengthening the relationship between suppliers and customers.

Customers and Suppliers of Nike

The main customers of Nike are the young Athletes who are between the age group of 15 to
40years of age. The customers of Nike consist of both men and women all over the world.
The future growth strategy that is undertaken by the organisation is by focusing on the tweens
and teens’ for creating the long term ‘brand loyalty’ (Childs and Jin, 2018).

China, Vietnam, Thailand and Indonesia are the major countries supplying the products of
Nike and major suppliers of this organisation includes ‘, including ‘Pou Chen’, PT Pan
Brothers’ ‘Fulgent Sun International’, ‘Delta Galil’ and Eagle Nice’ (Carpenter,2019). The
footwear that is sold by Nike is not manufactured in the US. The contract with the factories
located in Vietnam, China and Indonesia make up 49%, 23% and 21% of foot ware products
respectively.
Implementation of Supply Chain

The reason behind the success of Nike is its smart, efficient and agile Supply chain
management followed by the business organisation. The external sourcing has helped in
supplementing the Setting up of manufacturing and raw materials and its operation related to
manufacturing operations from low-cost countries like Vietnam, Indonesia and China
(Distelhorst et al., 2017).

Description of Coca Cola Amatil

Business model

Coca Cola Amatil follows the business strategies through ‘concentrate business’ and
‘finished product’ business. The business organisation used their revenue by selling
concentrates and syrups to authorise those partners.

Important customers and Suppliers

Coca Cola Amatil has more than 700,000 customers all over the World and it has given
access to 265 million consumers. The organisation operates mainly in six countries, namely,
New Zealand, Australia, Fiji, Indonesia, Papua New Guinea and Samoa (Wilson 2017).

Coca cola Amatil has a broad range of suppliers all over the world and the organisation
efficiently manages all the risks related to the suppliers from the external side ethically and
professionally. The Suppliers Guiding Principle is set out by the organisation to match up
with the expectations and values of the suppliers. All the dependent suppliers of Australia are
members of Supplier Nation and Social Traders (Ccamatil.com, 2020). The official
distributor of Coca Cola Amatil is ‘Statis Beverages’.

Implementation of Supply Chain

Coca Cola Amatil follows a supply chain management that helps in introducing sugar
concentration production and then selling it to various bottlers every corner of the World,
those have the access to an exclusive territory. The different products are sold on different
bottles and cans by using the benefit of holding territorially ‘exclusive contracts’ provided by
the company. The headquartered is responsible for manufacturing the syrup and selling it to
CCE. Then it is the responsibility of the CCE to combine the concentration of the products
for the manufacturing and packaging of beverages. The products that are manufactured are
marketed to the retail customers and customers on behalf of Coca Cola Amatil (DP and
Ciptono, 2018).

Comparison of Supply chains

The business model of the mass market followed by Nike helps in carefully managing the
supply chain management and providing the customers with premium quality, innovative
products and unique marketing fashion. On contrary, Coca Cola Amatil is not responsive to
adapting to innovative ideas as the products that they sell have a unique identity among its
customers. Coca Cola does not support change management in its supply chain management.

Nike encourages the diversification of sources of supply as it helps in decreasing the effect of
higher tariff rates. On the contrary, Coca Cola Amatil has given TCCEC the responsibility for
selling bottles of concentrates all over the world and manufacturing of various beverages in
Australia by following this SCM. The Coca-Cola Amatil follows all sustainable and ethical
practices, which help them in supporting business and goals related to sustainability during
the process of dealing with the suppliers. The operations related to logistics services of the
company have been successful by the establishment of a better Supply Chain 2020 vision
following Responsible Sourcing Guidelines (RSG) (Prameswara et al., 2019).

On the other hand, the supply chain of Nike is reliant upon the information that comes from
the upstream to downstream help in making the aligning of the logistic activities. These
activities mainly involve manufacturing, purchasing, moving the products. It can be seen that
both the companies are enthusiastic about adapting ideas that are innovative but differences
in their respective SCM makes the strategies of the business different from one another.

Literature Review

Supply change management is considered as the engine of an entire logistic system that helps
in the process of growth and development of a business organisation. The use of effective
supply chain management helps in providing new products to the final customers. Business
organisations redesign the complex Supply Chain network and uses serval subnetworks to
maximising their profit level and market size in the global markets (Hugos 2018). To match
with the international competitors, the business organisation constantly develop their business
by launching new products to match with its competitors. It can be seen that a business
organisation faces a high level of competition reduces the prices of new products. It is
believed that the frequent launching of new products is the main issue behind the decrease in
the lifecycle of products. The existing SCM needs to be changed after the launch of new
products due to the networks of logistics. It is important to restructure the supply chain
network before launching new products in the markets. This process is referred to as Supply
chain network analysis. MOP (Multi-Objective Problem) which are identified in this process
are disruption in supply chain, serval risk factors and maximising of total profits; SCN has
prospective in solving these issues and implication of SCM help in fostering business
growth. The use of effective SCM help in minimisation of cost as the process of tracking
becomes easier for the business organisation who uses raw materials from different vendors.
The SCM management helps in the reduction of the cost of Assets as it eliminates serval
components such as vehicles, warehouses and labor (Koberg and Longoni, 2019).

Analysis of Nike

Nike is one of the largest producers of athletic apparel and footwear brand in the world. A
strong supply chain network has been followed by the brand. The SCM is considered as the
main support of its global business. Nike aims at upgrading and evolving their existing
supply chain network. The supply chain of Nike also focuses on the quality of products,
environmental footprints and services to the customers in the process of growth of the
business. Nike has achieved an efficient, smooth and agile supply chain process. Nike uses
external sources for its raw material and manufacturing process. Nike assigns independent
contractors for manufacturing its products. The brand cautiously selects the raw material and
its supplier during the launching of new products. Nike outsources the manufacturing
responsibilities to 42 countries in 567 independent factories, which have more than 1 million
workers employed. Nike has successfully contracted most of its production to external
suppliers. According to the data of 2018, Nike footwear is produced in 13 countries, which
have 124 footwear factories. 9% of Nike Footwear is supplied by the largest factory (Nike
Supply Chain, 2020). The apparel factories of 328, which are located in 37 countries, were
supplied in the retail stores of Nike in 2018. Nike uses a code of conduct and code of
leadership, which helps in ensuring that its suppliers follow the best practices.

Recommendations and Conclusion

It can be recommended Nike needs to control the inventory as the number of suppliers is
related to it. It helps in controlling the quality of products in a better process as the company
itself is related to it. It can be seen that the code of conduct set by Nike for its suppliers create
issues as the suppliers fail to maintain it. Nike needs to reduce its process of outsourcing its
production of products as it can be seen in the developing countries where the wage rate is
low children are taken for the process of production and manufacturing.

Therefore, the analysis of the supply chain management in Nike provides vivid knowledge
about their system of management and the process of evolution of the company. Nike assigns
independent contractors for manufacturing its products from various countries of the World.
The brand cautiously selects the raw materials and its suppliers during the launching of new
products. The popular global business model of Nike mainly focused on effective supply
chain management. By implementing the above recommendations, Nike can achieve a strong
SCM in long run.

Analysis of Coca Cola Amatil

Coca Cola Amatil follows a supply chain management that helps in introducing sugar
concentration production and then selling it to various bottlers every corner of the World,
those have the access to an exclusive territory. There are different levels in the SCM of Coca
Cola Amatil. The two major levels are the upstream activities and downstream activities. The
manufacturing of the liquid concentrations is limited to the upstream activities of the
company. Coca-Cola has partnerships with the different suppliers to obtain the secret
ingredients, which help in persevering long-term goodwill of the company. The downstream
activities are the activities, which focus on the distribution system related to the franchise
provided to the different suppliers (Smith 2018). The Coca-Cola Amatil acts according to the
guidelines provided by the Coca cola Company to improve products, programs related to
marketing, advertising, and finally selling syrup to independent bottlers. The company also
focuses on building local capability by providing dedicated team members who enhance the
equipment and advance utilities inside the factories of manufacturing to increase the speed in
the operation process. Coca Cola Amatil is not responsive to adapting to innovative ideas as
the products that they sell have a unique identity among its customers. Coca Cola does not
support change management in its supply chain management.

Recommendations and Conclusion

It can be recommended that Coca Cola Amatil should ensure by keeping check and
undertaking continuous quality improvement on the Supply chain management for increasing
its level of efficiency. The company needs to undertake good market research for gaining
sufficient knowledge about market intelligence for improving its supply chain process. It is
also recommended that Coca cola should implement and develop effective management
related to information systems. The use of information systems should include supply chain
management systems, business intelligence, transaction process systems and customer-
relationship management systems. This will help in ensuring the effectiveness of the
company in its processes related to production and marketing.

It can be concluded that Coca cola Amatil uses an efficient and effective supply chain
management system, which has helped in maintaining a good brand image. The SCM of the
company plays a major role in the development of products to present it to the targeted
customers. SCM has been found to assist a lot in business development, as suppliers are
attached entirely to this core entity of SCM.
References

Carpenter, W., 2019. Nike Stock: Analyzing 5 Key Suppliers (NKE). [online] Investopedia.
Available at: <https://www.investopedia.com/articles/markets/051416/nike-stock-analyzing-
5-key-suppliers-nke.asp> [Accessed 31 August 2020]

Ccamatil, 2020. Responsible Sourcing | Coca-Cola Amatil. [online] Ccamatil.com. Available

at: <https://www.ccamatil.com/au/Supplier-information/Responsible-sourcing> [Accessed 31
August 2020]

Childs, M. and Jin, B., 2018. Nike: An Innovation Journey. In Product Innovation in the
Global Fashion Industry (pp. 79-111). Palgrave Pivot, New York.

Distelhorst, G., Hainmueller, J. and Locke, R.M., 2017. Does lean improve labor standards?
Management and social performance in the Nike supply chain. Management Science, 63(3),
pp.707-728.

DP, P.R. and Ciptono, W.S., 2018. The Impact of Direct Shipment to Forecast Accuracy in
Coca-Cola Amatil Indonesia (Doctoral dissertation, Universitas Gadjah Mada).

Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.

Koberg, E. and Longoni, A., 2019. A systematic review of sustainable supply chain
management in global supply chains. Journal of cleaner production, 207, pp.1084-1098.

Nike Supply Chain, 2020. Nike Supply Chain Map. [online] Wwwkunlastree.com. Available
at: <https://wwwkunlastree.blogspot.com/2019/02/nike-supply-chain-map.html> [Accessed
31 August 2020]

Prameswara, R., Subali, S.B.W. and Hartono, M., 2019, March. The relationship between out
of stocks and total settlement in Coca Cola Official Distributor at Betro-Surabaya. In 16th
International Symposium on Management (INSYMA 2019). Atlantis Press.

Smith, W (2018). Coca-Cola Amatil: transforming the PNG supply chain. Available at:
https://www.supplychaindigital.com/company/coca-cola-amatil-transforming-png-supply-
chain [Accessed 31 August 2020]

Wilson, R.E., 2017. Coca-cola amatil: A bottler recharging growth with energy
drinks. Kellogg School of Management Cases.