MBA5003 Managing Logistics and Technology

Assignment 3: Supply Chain Group Report

Word count: 1650

*Excluding figures, executive summary, table of contents, conclusion and bibliography

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Executive Summary

The Coca-Cola Company (TCCC) is the world’s biggest distributor and manufacturer of

soft drinks in the world, with a presence in every country in the world. It is widely known for

their flagship product Coca-Cola. Their success can be attributed to their robust supply chain and

excellent supply chain management. This report analyses the company’s current internal and

external situation through performing PESTLE and SWOT analysis. This report also discusses

the factors that underpins TCCC’s remarkable supply chain including supply chain management

and strategies. An outstanding and unique strategy of the company is an emphasis on

maintaining and strengthening TCCC’s relationship with local suppliers, retailers and bottlers.

There are multiple issues identified in TCCC’s supply chain, including the lack of sustainability,

safety and regulation issues, and a lack of innovation compared to their main competitor, Pepsi.

TCCC uses information systems (IS) and advanced technologies such as 3D printing, digital

marketing, RFID technology and artificial intelligence to grow and optimise their supply chain.

This report also includes some recommendations to improve TCCC’s supply chain and resolve

some of the issues identified. To conclude, TCCC’s impressive supply chain is one of the factors

of its success, and has long been a model for other organisations to follow. By constantly

improving and optimising their supply chain, TCCC can continue to expand and grow as the

world’s leading beverage company.

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Table of Contents

Executive Summary 2
Introduction 4
Scope 4
Reasons for selecting the company 5
Current situation including internal and external analysis 5
SWOT Analysis 6
PESTEL Analysis 7
Supply Chain Management 7
Supply Chain Strategies 8
Using Information Systems (IS) 9
Issues identified 10
Recommendations for supply chain improvement 11
Conclusion 12
References 14
Appendix 19

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Introduction

The Coca-Cola Company (TCCC) is a multinational conglomerate firm founded in 1892,

known primarily for their flagship product Coca-Cola, a carbonated beverage that dominates the

international beverage market. The corporation’s headquarters are in Georgia, United States.

TCCC is the largest distributor and manufacturer of beverages in the world, with more than

2,800 different products available in virtually every country in the world (Zeidan, 2021). It was

reported that over 10,000 beverages from TCCC are consumed every second globally

("Coca-Cola Company Statistics and Facts - Market.us", 2021). As a result, TCCC became one

of the world’s best-known brands and is one of the largest companies in the US.

At least part of TCCC’s success can be attributed to supply chain management. Supply

chain can be defined as organisations or individuals that are directly involved in the flow of

information, products and/or services from its source to a consumer (Mentzer et al., 2001).

Activities in the supply chain involve transforming raw materials into a product which is then

delivered to consumers (Kozlenkova et al., 2015). Supply chain is closely linked to the

transformation process and value chain (Nagurney, 2006).

Scope

This report will analyse TCCC’s current internal and external situation, its supply chain

strategies and management method. This report will also discuss the possible improvements that

can be made to the supply chain of TCCC, recommendations and their practical

implementations, as well as explore the impact of information systems has on the company. Due

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to the nature and word constraints of this assignment, not every aspect of TCCC’s supply chain

will be discussed.

Reasons for selecting the company

TCCC has an impressive supply chain, with 56 plants, 279 production lines and 98

distribution centres worldwide (Walendy, 2021). Moreover, they are able to get their products

from their factories to shelves within 48 hours (White, 2021). Given the vast nature of TCCC,

this accomplishment is no small feat. TCCC was selected precisely because of this. The

corporation is known for its robust yet innovative and flexible supply chain management

techniques, pioneering new strategies in the food and beverage industry.

Current situation including internal and external analysis

The current internal and external situation of TCCC will be analysed using SWOT and

PESTLE analysis. Both are important concepts commonly used by businesses to track and

analyse the environments that they are operating in. SWOT analysis helps businesses evaluate

their internal environment and how they compare to their competitors (Teoli et al., 2019). It is a

mnemonic that denotes S for Strengths, W for Weaknesses, O for Opportunities, and T for

Threats. On the other hand, PESTLE analysis is an exceptionally powerful and robust tool that

businesses can use to understand their external environment and is quite possibly the most

utilized model in the evaluation of the external business climate (Perera, 2017). PESTLE is a

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mnemonic that denotes P for Political, E for Economical, S for Strengths, T for Technological, L

for Legal and E for Environmental.

SWOT Analysis

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PESTEL Analysis

Supply Chain Management

Supply chain is the process of buying raw materials, converting it into finished goods and

providing it to end users through retailers or making direct sales ("Supply Chain", 2021). Supply

Chain Management (SCM) is the management of the whole process from buying raw materials,

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converting it into finished goods, and then delivering it to the desired location, either retailers or

outlets, or making direct sales online ("Supply Chain", 2021). It aims to identify and implement

processes and systems to maximise value across all activities ("Supply Chain", 2021). TCCC

procurement starts with purchasing raw materials such as sugar cane and water from local

suppliers. The first step of production includes production of concentration. After production, it

is packed and distributed to retailers and distributors such as grocery stores, restaurants and

cinemas (Walendlay, 2020).

TCCC has over 900 bottling and manufacturing facilities worldwide, including some of

the world’s fastest production lines. TCCC incorporates cutting-edge technology into its supply

chain with ease. For example, it makes some of its bottles and cans for its drinks using 3D

printing (White, 2020). TCCC also has a Global Supply Chain Council, made up of

subcommittees that are responsible for adhering to the defined TCCC supply chain strategy and

to improve the performance of their supply chain operators.

Supply Chain Strategies

TCCC is well-known for their efficient and remarkable supply chain strategies. A

company’s logistics expertise is integral to their supply chain. TCCC has integrated several

strategies into their supply chain to ensure efficiency and excellence. First, the company uses

advanced, modern technology such as 3D printing to produce small quantities of bottles and cans

(Bilton, 2021). Another way TCCC optimises their supply chain is through local sourcing and

partnerships with local suppliers. This reduces the time it takes for the company to deliver their

raw materials (e.g. sugar) to the processing plants, which drastically lowers risks. This also helps

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boost the socio-economic development in these countries by increasing employment rates.

Moreover, the company highlights the importance in maintaining partnerships with their

suppliers, strengthening the supply network (COWS, 2021). For example, McDonalds has been a

key partner of TCCC’s since 1955.

Supplier relationship management has always been a key part of TCCC’s supply chain.

The company holds annual meetings which include their key suppliers and key customers. The

meetings also provide an opportunity for the company to discuss their market needs and the

suppliers’ latest innovations (Dynamic inventory, 2018). Moreover, they work and collaborate

closely with their bottlers. The company’s guidelines for its bottling partners and suppliers are

centralised and directly supervised by The Coca-Cola Export Corporation (TCCEC). This means

that most of the decisions regarding the organisation’s operations are made by the headquarters.

Using Information Systems (IS)

TCCC has been very successful in incorporating information systems (IS) into their

organization. Advanced technologies in their supply chain are one of the main reasons why it is

so efficient and excellent. One of the strengths as identified in SWOT analysis above is TCCC’s

strong marketing strategies. Through digital channels, and mobile adoption, their brand is being

recognized globally through advertisement campaigns on social media sites (Home Hub Admin,

2020).

Another way TCCC has incorporated IS into their organisation is using 3D printing when

manufacturing bottles and cans for short-run manufactures like Diet Coke Feisty Cherry (Shrum,

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2018). Additionally, the use of System Application Product’s Enterprise Resource Planning

(SAP’s ERP). TCCC partnered with SAP to develop a beverage-specific application (Songini,

2004). SAP ERP is one of the world’s leading software systems that manages business processes.

The last one is their innovative way of using RFID technology wherein TCCC used an RFID

enabled drink dispenser (Clary, 2009). TCCC partnered with Genesys in 2019 to transform their

customer experience through the combination of AI and machine learning that gave the business

agility, interoperability, and omnichannel solution (Genesys, 2021).

Issues identified

An issue that has been identified is the lack of innovation. Pepsi, TCCC’s main

competitor, offers food products such as Lays and Cheetos. TCCC needs to urgently diversify

their products to remain competitive.

Several food safety issues were faced by the company in the past couple of years. The

issues included a pesticide scare in India and a contamination scare in Belgium (Reeves, 2021).

This can negatively impact the company’s brand and reputation. Concerns about the safety of

food additives have become more prevalent in recent years, and food safety regulators are

cracking down on various food safety requirements.

One of the biggest and most pressing issues identified in TCCC’s supply chain is

sustainability. Four sustainability issues that TCCC is faced with are water, climate, sustainable

packaging and energy (Coca-Cola supply chain management, n.d.). TCCC’s factory emissions

contribute to climate change by emitting a large quantity of CO2. A recent study in 2019 has

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named TCCC as the largest plastic polluter in the world (Home Hub Admin, 2021). Currently,

only 20–25% of TCCC’s beverages packaging is recyclable plastic (O'Reilly, 2011).

Recommendations for supply chain improvement

One of the most common ways to improve supply chain is by increasing supply chain

visibility. This can reduce disruptions in the supply chain due to unforeseeable external factors

such as natural disasters or abnormal weather. Supply chain visibility is an organisation’s ability

to track raw materials and manufacturing processes from source to consumers (Ault, 2021).

Improving visibility can also improve customer satisfaction due to fast delivery. It is

recommended that TCCC invest in a system that can effectively and accurately track real-time

locations of shipments, predict lead time and analyse information collected.

As the world’s largest soft drink company, it is expected to continue pushing the envelope

by developing new products and expanding its existing line. In order to compete with Pepsi, its

main competitor, TCCC needs to be more innovative and diversify its product portfolio. For

example, TCCC can introduce food products to compliment the beverages. Having a variety of

products will allow the company to grow and attract more investors.

TCCC has faced a slew of controversies regarding its products safety records. It is

recommended that TCCC take these food safety and regulatory issues seriously by responding to

these criticisms and implement stricter rules and guidelines in their supply chain. For example,

more food safety officers should be appointed and quality control checks need to be done

regularly and randomly (Kregiel, 2015).

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 Sustainability has been a big problem for TCCC, and the company has been criticised by

environmental groups as being one of the largest contributors to plastic pollution. TCCC should

work towards a completely plastic-free packaging to reduce plastic pollution, as well as

implementing a circular economy in their supply chain. For example, consumers can return

Coca-Cola glass bottles to retailers or bottlers in exchange for a discount in their next purchase.

It is acknowledged that converting from single-use plastic bottles to more sustainable packaging

might not be cost effective, but as the world’s leading beverage manufacturer, TCCC has a social

and ethical responsibility to reduce their plastic waste and carbon footprint. The company can

utilise its existing 3D printing more by investing in more 3D printers as this technology is widely

known to be more sustainable because it reduces waste (TCCC, 2021).

Conclusion

To conclude, many organisations are following TCCC’s example and are looking to

constantly improve and optimise their supply chains. Many factors contribute to TCCC’s

impressive supply chain management system, including but not limited to, advanced

technologies, an emphasis on supplier and partner relationships management and strict quality

control. They were also able to integrate advanced IS into their organisation to make their supply

chain efficient and excellent by using technologies such as 3D printing, RFID technologies and

their CRM. The unique amalgamation of these strategies make TCCC the leading beverage

company in the world. However, TCCC is not perfect. One of the most prominent issues

identified in their supply chain is sustainability. TCCC is one of the world’s largest contributors

to plastic pollution. Moreover, they have also faced multiple safety and contamination issues, as

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well as a lack of innovation when compared to their biggest competitor, Pepsi. Based on these

issues, we have made some recommendations to improve their supply chain which entails

increasing supply chain visibility, improving innovation and moving towards a more sustainable

supply chain by removing waste and single-use plastic packaging. By incorporating these

recommendations, we believe that TCCC can optimise their supply chain and further expand

their business, as well as take a step forward to fulfilling their social and ethical responsibility by

reducing their carbon footprint.

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Appendix

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