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Coca-Cola company and operation infrastructure

Discuss about the Analyzing Interfaces of Coca Cola Company.

Coca-Cola Company was started many years back and the company has seen tremendous growth since then. The company’s history dates back to the year 1886 where John Pemberton a drug specialist had some interest to transform people’s lives positively. While making some fragrant mix-up i.e. a fluid called caramel hued he decided to share the fluid with Jacob a pharmacist. The fluid was mixed up by some carbonated water in the pharmacy and some clients after tasting it concluded that it was a beverage (Coca-Cola Company, 2013). That’s how Coca-Cola came to existence. The beverage was given the name Coca-Cola by Frank Robinson. The company is headquartered in Atlanta Georgia with co-partners close to 93,000. Currently the company is ranked as one of the biggest companies in the world selling refreshments. It has its operations in more than 200 countries and its market portfolio has more than 3000 drinks. The drinks are refreshments and sparkling juices like squeezes, water, espressos and beverages.         

Coca-Cola Company’s mission is to ensure the world is refreshed in the mind, body and spirit. The company also works towards inspiring moments of happiness ad optimism using their brands and actions also to create value and make a difference in the lives of their customers. However the company does not operate minus competition and its key competitors include Nestle S.A., PepsiCo and Dr Pepper Snapple group (Coca-Cola Company, 2013).

The interfaces

Interfacing among departments at Coca-Cola Company contributes greatly to their success in the beverage industry. The impact brought by logistics department to other departments cannot be assumed since this department is at the core of business operations.

Interface logistics with marketing department

Marketing department plays great roles in regards to the branding and advertisement of various Coca-Cola products (Mollenkopf, Russo and  Frankel, 2007b). This department however has to work in coordination with the logistics department to ensure success. If these two departments work together, hidden problems are likely to be uncovered and thus lead to an increase in customer satisfaction. This will also affect efficiency which will be greater and raise profit potentials. Logistics is the other half of marketing department and vice versa. This is because both departments work towards putting the end product into the hands of the end user who is the consumer. Looking at the marketing mix i.e. product, promotion, price and place it’s obvious that the buyer cannot buy any product of this company regardless of the efforts put in by the marketing department unless the product is physically and conveniently available for purchase  which is the role of the logistics department (Mollenkopf et al., 2007b).

The Interfaces

Interface logistics with production department:

Production department survives in the traditional sketch of the logistics system. This indication is often clearly stipulated in a flow diagram with detailed examinations (Charlesworth, 2009). It’s therefore the role of the logistics manager to take keen interest in the system and work with an aim of not dictating the matters relating to the production system but only offer the needed assistance. With production and logistics there is a need to understand the impact of customized logistical designs on the overall performance of the company. Logistics department thus shares many responsibilities with production department (Sheth & Uslay, 2007). Logistics department is tasked with overseeing transport activities, management of inventory and warehousing activities while production oversees the company’s activities that ensure products are manufactured on time, manipulating of materials needed in the production exercise, quality control and overall maintenance. For manufacturing to be efficient the process of production and logistics has to be well coordinated and the interface has to generate positive energy.

Finance department ensures activities within the companies are run smoothly because it’s the sector that deals with payment of workers, clearance of customer orders, purchase of equipment at the company and payment of suppliers on time (Schramm and Morschett, 2006). This department interfaces a lot with logistics department because for any activity to be done at the logistics department money has to be released by the accountants. For example any delays in the procurement department as a result of failure on the finance sector to release money leads to slugging of the entire processes done at the logistics department. Management of inventory by the logistics department is dependent upon the finance people to ensure stock is replaced on time and all the suppliers are paid with no balances (Wagner and Bode, 2008). Failure on the accounts department to update their records means some equipment may be delayed to be bought as per the request from production department and in return slow the entire efforts of meeting the demands of their clients.

Four Steps of Order Cycle for the company

Order cycle simply means the process in which an order from the clients or customers is processed by the company (Delmas and Montiel, 2009). This process is often done in an orderly manner from the transmittal stage, processing, picking and packaging and then delivery of the order to the customer

This is where a customer makes some request for certain products from the company could be coke zero fizzy drinks. This application is done online by filling a form. The orders are placed via an electronic data system (Lusch, Vargo and O’Brien, 2007). The purchaser prints out the purchase order (PO) and makes it available to the authorized personnel at the various outlets of Coca-Cola Company so as to have it approved. Once the order has been approved, the PO is emailed to the suppliers.

Interface between logistics and other departments at Coca-Cola Company

Purchasing order sample

These are the activities that aim at completing the order received from the customer. The activities here include the role of production department which monitors completion of the order processing in an accurate manner and delivery of the finished products to the customers (Delmas and Montiel, 2009). In this stage it’s the responsibility of the accounts department to ensure the customer has paid for the requested products and the customer order is entered into the system. The marketing department is tasked with the role of designing the products according to the client’s requirements. It also works towards enhancing long-term relationship with its customers the logistics department is then supposed to pick the purchased products and pack them ready for transportation to the customer (Grönroos, 2007). It also stocks up the shortage inventory within the shortest time possible. Transportation department then arranges for the delivery of the products with the appropriate transport means depending on the fragility of the products and the weight as well as the urgency for delivery.

The store department is at this stage in possession of the material list form the production department after clearance by the accounts department. The store manager collects the required products to either deliver them to the production department if it’s for manufacturing or to the transport department if they are to be delivered to a customer. All the accuracy has to be observed by cross checking the request list before releasing the required products.  The store manager then checks the inventories for the stock out (Delmas and Montiel, 2009). It’s the decision of the store manager to request the purchasing department for restock of the products that have been taken by the production department or customer. Once al the required products are received by the production department it commences the production exercise and the finished products are transferred to the logistics department for delivery to the customer (Carter and Easton, 2011). Upon receiving the products from the producer the logistics department prints out barcodes and pastes on each packaging in a serialized manner. They then enclose the packaging list in the delivery order.

It’s the final phase in the order cycle system. The right shipping mode is selected by the logistics manager to deliver the goods (Mentzer, Stank and Esper, 2008). They then arrange for transportation means as well as carrier time. They make a follow up until the goods are delivered to the customer. In case of any lost goods the logistics department takes the responsibility of tracing them back. Therefore the safe and timely delivery of goods to the clients is the role of the logistics department.

Interface logistics with marketing department

Order delivery sample

The order cycle for Coca-Cola company as it is quite efficient however it’s recommended that the company invests heavily on the current technology in product delivery so as to cut down on extra expenses as a result of doing work manually as well as to save on time and resources. The company should maximize on the use of enterprise resource planning system for the tracking of its activities in the order cycle.

Inventory management

The role of inventory management is purely allocated to logistics department at Coca-Cola Company. This sector is very important in ensuring the company’s records are up to date when it comes to in and out stocks. The personnel in charge of this sector have to ensure the company is stocked in line with the demands on the market. This is done so as to avoid overstocking which may lead to products going bad or under stocking which may fail to meet the customers’ demands on the market. Therefore a lot of capital is usually invested in inventory (Larson, Poist and Halldosson, 2007). A lot of cash can be tied up by the products if the inventory system is not well managed. Inventory in most cases takes up warehouse space, requires good handling and can spoil or even go out of style or even lost and to some extend stolen if the management is not careful.

The manual means of handling inventory is likely to lead to data entry errors, mistakes in shipping and lack of knowledge on what should be done in terms of restocking the warehouse (Larson et al., 2007). This explains why inventory management at Coca-Cola Company is done using current means of technology with minimal paper works involved. This company uses continuous review systems to order items with the same quantity every time an order is placed. However inventory levels are always monitored and incase the quantity of an item drops below the set levels the stock has to be replenished (Krasnikov, Satish and Kumar, 2009). A cycle counting program is also in place to ensure the company’s cycles count. The counting frequency, counting strategy and whoever is in charge are key things that the company considers while using the program. An inventory management system has been put in place so as to know the most important inventory levels that are beneficial to the flow of the business. Important data is tracked and such data include sales patterns, seasonality and the previous turnovers (Martinsen and Huge-Brodin, 2010). This enables the company to make more educated decisions regarding the business.

Interface logistics with production department

The company has embraced an early implementation of quality control strategies and this has had direct linkages to customer satisfaction and also growth of the company business (Lin & Ho, 2008). Quality control activities involves things like asking workers to check for any signs of damage, ensure the product colors, styles and sizes are of good and right quality as well as crosschecking the terms of sale and prices. The inventory activities should not be impacted on negatively by the warehouse environment and therefore light, humidity and temperature are always right for Coca-Cola products storage (Homburg and Ove, 2007). A good inventory management should ensure the company optimizes on the stock levels and this is what Coca-Cola has always aimed at achieving. This is because it boosts efficiency and meets the customers’ demands that are always changing. When inventory control is giving first priority glaring inefficiencies at the company can be avoided and thus help the company to prepare accurately for the future.

Conclusion

From the operations of Coca-Cola company its evident that logistics department plays important roles in ensuring the success of the business. However it’s important to note that this department cannot operate on its own and therefore there has to exists a positive interface coexistence between logistics and departments such as production, marketing and finance. Once these departments work in coordination success is something inevitable. The order cycle also has to be done effectively with minimal delays in the process so as to retain their customers and improve on product and service deliver. All these activities at the company can be effectively done if inventory services are managed well. This is because it’s through inventory that one is able to tell how well the company is selling its products to the end user i.e. customer.

References

Carter C.R. and Easton P.L.(2011). Sustainable supply chain management: Evolution and future directions. International Journal of Physical Distribution & Logistics Management 41(1):46–62. DOI: 10.1108/09600031111101420

Charlesworth, A. (2009). Internet marketing: a practical approach. Slovenia: Butterworth- Heinemann.

Coca-Cola Company. (2013). About Us. Retrieved from https://www.thsblazers.com/marenas/coke/history.htm May 17, 2017

Delmas M.A and Montiel I.(2009). Greening the Supply Chain: When Is Customer Pressure Effective? Journal of Economics & Management Strategy 18(1): 171–201. DOI: 10.1111/j.1530-9134.2009.00211.x

Grönroos, C. (2007). Service management and marketing. Customer management in service competition. Chichester: Wiley.

Homburg, C. and Ove J. (2007), “The Thought Worlds of Marketing and Sales:Which Differences Make a Difference?” Journal of Marketing, 71 (3), 124–142.

Krasnikov, A., Satish J. and Kumar, V. (2009), “The Impact of Customer   Relationship Management Implementation on Cost and Profit Efficiencies: Evidence   from the U.S. Commercial Banking Industry,” Journal of Marketing, 73 (6), 61–76.

Larson, P.D., Poist, R.F. and Halldosson, A ´ . (2007), "Perspectives on logistics vs. supply chain management", Journal of Business Logistics, Vol. 28 No. 1, pp. 1-24

Lin, C. & Ho, Y. (2008), "An Empirical Study on Logistics Service Providers’ Intention to Adopt Green Innovations", Journal of technology management & innovation, Vol. 3, No.  1, pp. 17-26.

Lusch, R., Vargo, S. and O’Brien, M. (2007), ‘‘Competing through service: insights from service dominant logic’’, Journal of Retailing, Vol. 83 No. 1, pp. 5-18.

Martinsen, U. & Huge-Brodin, M. (2010), "Greening the offerings of logistics service providers", in: Stentoft Arlbjørn, J., (Ed.), The 22nd Annual NOFOMA Conference Logistics and Supply Chain Management in a Globalised Economy, pp. 969-984.

Mentzer, J., Stank, T. and Esper, T. (2008), ‘‘Supply chain management and its relationship to logistics, marketing, production and operations management’’, Journal of Business Logistics, Vol. 29 No. 1, pp. 31-45.

Mollenkopf, D.A., Russo, I. and  Frankel, R. (2007b). The returns management process in suppl chain strategy. International Journal of Physical Distribution & Logistics Management 37 (7), 568–592.

Schramm-K. and Morschett, P. (2006); The Relationship between Marketing Performance,Logistics Performance and Company Performance for Retail Companies. The  International Review of Retail, Distribution and Consumer Research. v.16, n. 2, p. 277, 2006.

Sheth, J. N., & Uslay, C. (2007). Implications of the revised definition of marketing: From exchange to value creation. Journal of Public Policy & Marketing, 26(2), 302−307.

Wagner, S.M. and Bode, C. (2008). An empirical examination of supply chain performance along several dimensions of risk. Journal of Business Logistics 29 (1), 307–325

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