Group Members

Hafiz Uzair Ali Khan

Ismail Muhammad Amin
Bilal Bin Masood
Muhammad Nouman
Topic
Supply Chain Management at
 INTRODUCTION

 The Coca-Cola Company is an American multinational beverage.

 Headquartered in Atlanta, Georgia.
 Dr. John Syth Permberton a pharmacist produced the syrup of Coca-Cola in 1886. He took the
syrup to the Jacob’s Pharmacy in 1889 where it was placed on sale as Coca-Cola fountain drink
for five cents of a glass.
 The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler and he
incorporated The Coca-Cola Company in 1892.
 The Coca-Cola Corporation entered in Pakistan market in 1953 after purchasing local plant
located in Karachi, Hyderabad, Gujranwala, and Sialkot.
 In 1970, Fanta and Sprite were introduced in Pakistan. The Coke Company entered into the
entertainment business in 1982. In, 1984 Coke foundation was established to utilize resources to
benefits society.
• Current CEO Muhtar Kent
• Over 146,000 employees around the world
• More than 500 brands in over 200 countries or territories
• More than 1.7 billion servings per day
• Sponsorship: Olympics, FIFA, etc.
• Charity and contributions 1% from the total income
• The Coca Cola Foundation, 1984. Financial support for improving
society.
• 2002-2010 more than $690 millions of contribution and charity.
Coca Cola in PAKISTAN
Manufacturing processs

 https://www.slideshare.net/ayeshamajid3110/cocacola-beverages-
pakistan-operation-management-analysis
Strategies at coco cola:

Maintaining its
differentiation Differentiation
strategy. by utilizing soft
sell approach.
CONT.
Company has successfully positioned it self on the following standards:

Strength is
communica
Quality tion
&innovation

Strong
brand Fun &enjoy
portfolio
 LOCATION

 Location selection decision of Multan beverages was done in 1964 with the help of
parent company. This selection seems to be dependent on following considerations.
 Multan – Center of Southern Punjab
 Southern Punjab is highly populated area of Pakistan. It possesses plenty of potential
for consumer product companies.
 The corporate decision-makers also realized the fact and made the decision to start
production in Multan.
 Multan is the center of the Southern Punjab so is southern Punjab Multan was selected
for facility locations.
 Due to centralization proximity to customers on all these sales of Southern Punjab
become easy.
 This factor also decreases high transportation expenses because Beverage Company
like Coca-Cola could not afford to be at a long distance from the market.
PRODUCTION PROCESS
Production process at Multan beverages could be divided into following heads.
 Purchase of Bottles
 Collection of Bottles
 Washing of Bottles
 Inspection section (empty bottles)
 Soak process
 Light room (empty bottles)
 Filling of bottles
 Light room (Filled bottles)
 Loading
 Packing
 MANUFACTURING OF COCA-COLA
Filling Capping Level detecting Warming Labeling
a.a.
Depalletizer
b.b.
Step 4
Inspection

Bottling & Distribution

Coca-Cola beverage Warming

Decoder on tray Shrink Wrapper Tray Packer Attach Bar Date coder
code sticker on bottle
Lahore
INVENTORY POLICY

 The COCA COLA BEVERAGES PAKISTAN is currently operating and using the
FIFO (first in first out) method for its inventories in the accounts and finance
departments. However the actual information of the inventories can not be
disclosed and provided here as it is the company’s confidential matter.
 Coca-Cola Company determines cost on the basis of the average cost or first-in,
first-out methods(FIFO).
 First-in-first-out stock valuation
 A-B-C classification
 Firms normally try to keep stock moving in Assumes that the first inventory
purchased is the first inventory sold.
 line with purchases dates to prevent old items from being shop-soiled, outdated.
RAW MATERIAL / PROCUREMENT
Concentrate
 Multan beverages have to get the concentrate from Lahore, which is the Franchiser
Company of Coca-Cola. This concentrate is a major component of the finished goods.
 The parent company is itself quality conscious company so Multan beverage has never
had any complaint about the concentrate quality.
Sugar
 Sugar is purchased from different suppliers. When there is major or regular need then
order is placed to the Ittefaq sugar mills or Sheikhupura Sugar Mills.
 Company also receives the certificate of analysis from the supplier before delivery.
Sugar is also tested in the lab of the company.
 Very high standards are kept to process. the water and then several checks are made
whether the quality of water is up to the required standard or not.
WORK IN PROCESS (LAHORE)

Syrup treatment
 The syrup produced is treated at about 9.2 F.H to make hygienic. This process
makes the quality of product more reliable. Coke Company already has given the
standards to check the syrup.
Lab test
 When carbon dioxide and ammonia are added to the syrup then a lab test is made
of the ingredients of the products. This test is most important test as it is the final
test before the converted into the finished product.
 FINISHED PRODUCT
Finished good test
 Finished product is randomly selected and tested in the lab. This test also checks the
ingredients and preservation status of the bottles. In the finished goods test two type of test
are used to maintain the quality of finished products.

Appraisal
Internal failure
External failure
 Multan Beverages company have not any external failure cost but they have internal failure
cost associated with finished product’s inspection. When the bottles are under or over
filled, higher or lower sugar quantity and higher or lower gas volume than standard then
the internal failure cost incur. Company also has Appraisal cost which is related to detect
the causes before the product is going to complete.
 SAFETY STOCK

 The company does maintain the safety stock of all the raw material used, but does
not have any dead line for the safety stock. The average safety stock of concentrate
and sugar is as follows.
 Concentrate
One week safety stock
 Sugar
Five days safety stock
LEAD-TIME

Lead-time is the time between order reached and orders received. Lead-time for
different raw materials in the Coca-Cola Company is as follows
 Concentrate
Two days lead-time
 Sugar
One day lead time
 Co2
Three day lead time
 Consideration for other locally available raw material is not troublesome as this
material are commonly available in the market.
 PRICING STRATEGY

Following factors Coca Cola kept in mind while determining the pricing strategy.

 Price should be set according to the product demand of public.

 Price should be that which gives the company maximum revenue.
 Price should not be too low or too high than the price competitor is charging from their
customers otherwise nobody will buy your product.
 Price must be keeping the view of your target market.

The price of Coca Cola, despite being market leader is the same as that of its competitor Pepsi
Cola. Sometimes, Pepsi places its customers into some psychological pricing strategies by
reducing a high priced bottle and consumers think that they save a lot of money from this.
 PRICING STRATEGY Cont.

COMPETITION BASED PRICING APPROACH

 Coca Cola has intense competition with neither Pepsi so its pricing can’t exceed too much nor
decrease too much as compared to the price of Pepsi Cola. If price of the Coca Cola exceed too
much from the Pepsi then people will shift to the Pepsi Cola and on the other hand if the price of
Coca Cola decreases people might get the impression that its quality is also low.
PROMOTIONAL PRICING POLICY
 Coca Cola has offered promotional prices very frequently. Especially on some occasion Coca
Cola reduces its rates like in Ramzan Coca Cola reduces its rate unto 5 Rupees on 1.5 liter bottle.
MARKET PENETRATION PRICING POLICY
 Prices in beverage industry are determined by the consumer. In an economy like that of Pakistan,
consumers tend to switch towards a low priced product. Coca Cola’s objective is to target every
consumer of the country so Coca Cola has to set its prices at such a level which no one can offer
to its consumers. That is why Coca Cola charges the same prices as are being charged by its
competitors. Otherwise, consumers may go for Pepsi Cola in case of availability of Coca Cola at
relatively high price.
SOURCING

Sourcing There are three types of sourcing

• Sole
• Multiple
• Single

Sole source of supplier implies that the organization is forces to use only one supplier such as
Patents, raw material location, only one organization producing items
Multiple Source is used of two or more suppliers for an item usually three suppliers are chosen,
and their portion of the business is a function of their performance in term of price, quality and
delivery.
It is also eliminate disruption of supply duet strikes and other problems
Single sourcing is a planned decision by the organization to select one supplier for an item when
several sources are available. It results in large long term contracts and a partnering Relationship.
FACILITY LAYOUT

 In Multan beverage was installed then due to limited space the washer placed in side
the production hall. Heat comes inside the production hall due to washer temperature.
 This washer should be out side the hall for the health of employees.
 The company realized this thing while installing the second unit. Now the washer of
second unit is placed out side the hall.
 Other layout designing has been set according to the standards prescribed by the parent
company.
 LOGISTICS

PARAMETERS

1) Average order size

a) Distributor to company Based on Demand, Season
b) Retailer to Distributer

2) Order placement
a) Distributor to company Phone
b) Retailer to distributer Distributor Representative

3) Transit Time 2 Days

4) Order frequency Daily

LOGISTICS Cont.
PARAMETERS
5) Inventory Maintained 1 day

6) Unsold/Damaged Merchandise Replaced

a) A/C Keeping
7) Technology b) Stock keeping
c) Complaint Handling
8) Mode of Transportation Company vehicle
(company to distributor)

9) Transportation Expenses
a) Company to Distributor Company
b) Distributor to retailer Distributor

10)Warehousing
a) Storage Capacity Minimum 30 m2
b) Ownership Owned / Rented

11) Stock keeping responsibility Stock keeper

Full Coverage - 59 Routes No return
Retailers’ Loss

Owned & contracted vehicles

Transporting Vans
Retailer Handling
1 Driver + 2 Loaders
 FLOW OF THE PRODUCT

9am-6pm 11pm-6am
• Pre-seller goes • Order is
on his route and processed
books the orders • Order is • Loading the
registered on • Load sheet is vehicles is done
the server released by the QS and
through GPRS on labor people
the spot
9am- 6pm 6pm-11pm

On a
tablet or
manual
sheet
 Cont.

9.30am-8.30pm 11pm
• First vehicles • Trucks return to
leaves at 6am depot
• Product delivery • Records are
• All vehicles • Unloading takes tallied
leave by 9.30am • Empty bottles place
are collected • Cash submission

6am-9.30am 8.30pm-11pm

Only cash
Cannot except for a
take more few
than order
DISTRIBUTION CHANNELS

 Coca Cola Company makes two types of selling

Direct selling
Indirect selling
DIRECT SELLING
 In direct selling they supply their products in shops by using their own transports.
They have almost 450 vehicles to supply their bottles. In this type of selling
company have more profit margin.
INDIRECT SELLING
 They have their whole sellers and agencies to cover all area. Because it is very
difficult for them to cover all area of Pakistan by their own so they have so many
whole sellers and agencies to assure their customers for availability of Coca Cola
products.
Cont.  Area wise distribution & promotion schemes
 Focus on high traffic locations
 Railway stations
 Airports
 Bus stand
 Coke distributes using 2 routes
 Direct
Direct Route Market
 Indirect

Plant Warehouse

Indirect Route Distributor Market