Coca-Cola's Supply Chain Management Essay Is Insightful.

1. Demonstrate a critical understanding of contemporary theories and practices within the areas of Logistics and Supply Chain Management

2 Evaluate critically the appropriateness of the theoretical concepts within a variety of differing organisations and evaluate the issues and problems concerning the implementation of these concepts at the operational level.

The importance of supply chain and distribution

The main aim of companies and any other business enterprise is to satisfy the demands of their customers. This process includes gathering information about the needs and desires of customers, gathering of the necessary resources to produce the product demanded by customers than the actual production process(Hoffman 2016). It is after the production of the products that the manufacturer finds ways of making the goods and services offered available to consumers. It should be noted that not all customers of a company are located near the production center.  Some of the consumers are found far away from the production site and therefore need some well-organized chain of distribution to make the products available for the customers. Multinational companies that produce products consumed worldwide invest a lot of resources in making sure that their products reach the final consumers (Hou, Wei, Li, Huang, & Ashley 2017).The success of a supply chain depends on the ability of the process to meet its goals efficiently, using as minimum resources as possible and delivering the product within the required time. 

For instance, Coca-Cola which is currently considered the largest soft drink producer global invests billions of dollars in making sure all the consumers in any part of the world can access the product irrespective of the distance from the nearest production plant.

Hoewe and Hatemi(2017) explain that supply chain refers to the organization of resources and people to make sure that the products and services are moved from the producer or supplier to the final consumer. It should be noted that customer loyalty mostly relies on the company's ability to maintain a stable and reliablesupply of its products such that the consumers never lack the products in the nearby stores and shops (Macchion, Fornasiero, & Vinelli 2017). Excellent product quality and well-maintained supply and proper advertisement make consumers feel safe and confident in always getting the product whenever they need them. As mentioned earlier, multinational companies spend much of their resources in making sure the products they produce are available to their consumers whenever they need them. Such corporations go-ahead to establish their production plants in areas they feel have a more significant population of the product's consumers.

This study aims at illustrating how one of such multinational companies strategizes and maintains a proper supply of its products to make sure the products are always available on the shelves of local retailers and accessible to consumers (Powell & Gard 2015). In this study, we explore a detailed account of Coca-Cola Company, the structure of Supply Chain the company uses, the developments it has achieved and challenged the company faces in the process. Coca-Cola Company was established in the 1880s in Atlanta Georgia, United States. The company has grown and developed over the years to become one of the world's leading producers of non-alcoholic drinks that supply the entire world population with their products (Macchion, Fornasiero, & Vinelli 2017). Coca-Cola is currently the world’s most popular soft drink producer and boasts of having the largest customer base in the industry.

Coca-Cola Company overview

It should be noted that it is not an easy task maintaining a steady supply of products to satisfy the ever-changing needs of the consumers and effectively competing for the other companies that manufacture other brands considered as substitutes. So far this goal has been achieved through a well-maintained supply chain that thrives through a well-established feedback channel and taking proper and fast actions on the feedback from the consumers. Coca-Cola counts on the company's well-coordinated and robust production, marketing, distribution, and customer feedback efficiency (Prajogo, Mena, & Nair 2018). The products of the company are consumed in over 200 countries in the world with about 500 brands and totaling to 4,100 products. The various brands that Coca-Cola products include minute maid, sports drink, coke, Fanta, diet coke, sprite, and Dasani drinking water(Yang& Fan 2016). The Coca-Cola Company management works hard and comes up with innovations to increase the company's market share in non-alcoholic drinks industry globally through effective marketing and distribution as well as maintain the high quality of their products to make consumers feel the value of their money.

With a broad customer base in almost all parts of the world, the company has to formulate a method of making sure all the customers are satisfied, and their needs are met (Rushiun & Lamb 2018). To achieve this goal in a most simple, effective and efficient way, the Coca-Cola Company has adopted a scarce means of distribution where the parent company only produces a syrup concentrate which is then sold to various bottling companies located in different parts of the world.

These bottling companies are located in areas where Coca-Cola customers are, and the companies are assigned trading territories to avoid overlapping and unnecessary competition among themselves(Yang& Fan 2016). In this type of supply and distribution system, the mother company owns only one bottling company by the name Coca-Cola Refreshments, located in North America and is only serving consumers in that territory. All other consumers of Coca-Cola products are served by the bottlers, who buy production right from Coca-Cola, produce the finished product from the syrup with the use of water and other sweeteners. After the production process, the bottling companies package the products in cans and bottles, distribute, merchandise, and sell the products to final retailers such as food service distributors, restaurants, vending machines, and retail stores (Yang & Fan 2016). This supply chain is divided into two levels.

Coca-Cola supply chain structure

This report will mainly be focusing on the downstream activities of the product which entails partnerships with different bottlers, distributors, and channels used to reach different retailers.

The activities at this level of the companies supply chain are within the tightly held secrets surrounding the formula used in the production of the syrup concentrate that the company sells to the various bottlers (Yang& Fan 2016). The ingredients and the recipe used in the manufacture of the syrup are tightly held in the main vault of Sun Trust Bank located in Atlanta; this is to safeguard the information about the cost of producing the syrup and elude other competitors who may want to copy the formula. Some reports have indicated that the company spent over 100 million dollars in the year 2009 to produce the products sold. Many believed that sugar, sucrose or high-fructose corn syrup, is the main ingredient used in the manufacture of the syrup Coca-Cola sells to other bottles and the company is said to spend a lot of its resources to tack the prices of the ingredients used. The tracking helps the company to purchase the raw materials from the cheapest market with the highest possible quality. Other components believed to be carbonated water, caffeine, phosphoric acid, and some natural flavoring. Coca-Cola Company is supposed to have some other different supply chains for the raw materials and their identities are withheld. The events happening at this stage rely on the concepts of some theories. 

According to this theory, leaders in play important roles in our society; family, community, company, or in industry setup (Tokman, Richey, & Deit 2016). Even though the decisions made in a company are influenced by external environment, there are company rules and decisions that are reserved to the management and such decisions serve the interests of the management. In this case, the Coca-Cola Company manufactures the syrup concrete on their own and keeps the formula secret. This decision servers the company and helps in managing the production of their brands.

This part of Coca-Cola Company chain of supply mainly deals with the franchise distribution where Coca-Cola Company is believed to produce a syrup concentrate. The company then sells the syrup to other bottling companies worldwide who have exclusive territorial rights to provide final product base on the guidelines from Coca-Cola (Uzsoy, Fowler, & Mönch 2018).  The parent Coca-Cola Company owns North America's Coca-Cola Refreshments plant but also has minority shares in most of the bottling companies that produce Coca-Cola products.Such bottlers includeCoca-Cola FEMSA, Coca-Cola Hellenic Bottling Company (CCHBC), Coca-Cola Enterprises, Coca-Cola Amatil, and Coca-Cola FEMSA.These bottlers operate independently and are allowed to sweeten the product according to the tastes and demands of local customers. All these are done within the policies set by Coca-Cola Company which develops the product details, comes up with marketing strategies, and sells the syrup (Kim, Lee, &Minjung, 2017).It is the work of the parent company to set the basic structures of businesses involving its products in regards to operational procedures, customer relationship, and feedback management.

Supply chain downstream activities

To understand the whole process of supply chain management better, a review of a small channel flow is necessary.  The parent Coca-Cola Company located in Atlanta uses its secretly guarded formula to come up with the syrup concentrate which the company then sells to the Bottlers with the territorial rights such as Coca-Cola Enterprises. In this case, the Coca-Cola Enterprise manufactures the beverage by producing the syrup with other ingredients, does packaging, markets, and sells it to the retail customers and consumers within its territory; North America and Canada in this case. The branch of the mother company entrusted with selling the syrup to bottlers is referred to as The Coca-Cola Export Corporation (TCCEC) (Sodhi & Tang 2014). This branch coordinates with the regional offices located in different parts of the world to come up with partnerships with local bottlers who use the syrup to produce Coca-Cola products and sell to their respective local markets.It is only in the United States whereThe Coca-Cola Export Corporation bypasses the local bottlers and goes ahead to produce fountain syrup and sell to some authorized wholesalers and retailer. 

This study uses this section to analyze how the bottlers manufacture, market, distribute, and sell the Coca-Cola brand to the final consumers in their local territories. Sawik(2017) explains that it should be noted thatthe parent company, Coca-Cola is responsible for setting the policies and guidelines for operations that are carried out by the bottlers, and in this regard most of the bottlers' operations are standardized and most decision-making processes are done centrally (Sanders 2016). The bottlers serve their respective geographical territories under a head office that aligns all the operations of other players in the chain.

The bottlers ship the syrup from the Coca-Cola Company (Atlanta) with the help of The Coca-Cola Export Corporation; they then manufacture the drink by mixing the syrup with other ingredients as instructed by the parent company and packages them in bottles and cans (Maehle & Supphellen 2015). The bottlers then market, distribute, and sell the final product to the consumers.

This theory gives helps in management of the supply chain by aligning the operations of other players in the system to a common policy. The use of this theory has helped coca-Cola company in putting the operations of the bottling companies in control (Lian & Ke 2018). The company gives the directives on how the bottling companies should manufacture, market, and sells the Coca-Cola branded products. This theory is also referred to as Supply Chain Coordination Theory.

Coca-Cola bottling companies

Coca-Cola Company takes every measure to make sure customer satisfaction is maximized, and that is the reason behind the formulation of the policies and operational guidelines for the bottlers. The company acknowledges the fact that the consumer demands are continually changing and there are also other emerging trends to handle like competition from other related companies(Laihonen & Pekkola 2016). The explains that to serve customers with the highest possible level of satisfaction; it must be open to, appreciate and accept the new developing cultures and ideologies. Other basics that control how the company responds to customers include the following

1. Consumers love products produced locally by people and producers who support local events in the community.
2. There is a resurgence in the traditional cultures and rituals that bring back past tastes of the traditional foods and drinks.
3. Consumers like feeling being identified by a brand that is stable and ever available
4. Consumers now try to manage their health by controlling what they consume hence the need for higher quality foodstuffs.
5. Consumers expect to engage with the brand on matters to do with quality and the changing needs. 

Coca-Cola Company tries to follow and incorporate the above trends when coming up with new products and when handling any emerging issue that may arise between the company and the public (Ivanov, Mason, & Hartl 2016). The company puts the customers at the heart of its operations to be very sensitive to changes that may occur in the side of consumer demands and needs. Coca-cola operates under the umbrella of the consumer is part of the solution not necessarily the source of the challenges the company faces. 

This is a theory that tends to improve the relationship between the company and customers. According to Debnath, Datta, and Mukhopadhyay (20160 the company uses the data on customer history with the company to help improve the relationship. Coca-Cola Company has used this theory for long by identifying some few customers whose grievances affected the company’s image, contact them and find engage them in resolving any standoff. The use of this theory has improved customer loyalty to the company. 

Over the last few decades, the company has experienced changes in their marketplaces with consumers moving towards the use of technology in doing their purchases. Currently, the company serves more than four generations whose behaviors shape how to interact with the next generation (Rushiun & Lamb 2018). There have been significant changes that started with the emergence of larger store format. In the recent past, there have emerged online markets that concentrate on proving speed, convenience, and ubiquity when handling customers. Consumers improve their knowledge about products one of the ways the retail shall improve beyond the current point is the use of technology (Hendricks, Connor, Lambert, Brown, Burger, Mc Fie, Readhead, & Viljoen 2015). These general changes in marketplaces in the industry have also influenced the type of innovations that the company comes up with in regards to satisfying the consumer needs. The previous survey done on the company indicate that the sustainability issues the company focuses on are the sourcing, community, and the scarcity of the resources the company uses in its production process.

Franchise distribution

Gouda and Saranga (2018) illustrate that the findings of the survey and further discussions on the same, Coca-Cola Enterprise have updated its sustainability plan to make sure that its targets remain with the expectations of the stakeholders. The updates were done in line with the feedbacks the suppliers got from the consumers as follows.

Sustainable sourcing: the company intends to work closely with the suppliers to make sure its sustainability sources are mostly agricultural by the year 2020.

Community: the company intends to improve its corporate social relations by increasing its participation in community activities and events and help developing talents of a target 250,000 youths annually.

Resource scarcity: based on this increased risk, the company plans to develop a circular economy where it grows the use of renewable and recycled materials in its production.

Some of the challenges Coca-Cola Company faces in its production include accusation from environmental lobby groups claiming that the company uses too much water in its operations starting from production process to the supply chain management (Freeman, Kelly, Baur, Chapman, Chapman, Gill & King 2014). The company has responded to this claim by promising to find a way of reintroducing every drop it uses. The management of the company works hard to come up with a recycling process that helps them recycle as much water as possible.

Another environmental challenge is the dumping of the packaging materials used to store Coca-Cola products. Most of the packaging materials are the no biodegradable plastics and bottles. The company has launched a policy of recycling the bottles, and at some point, the company pays for the packaging material to be brought back for use.

There have been cases of discrimination based on religion, gender, and race in some production plants related to Coca-Cola Company. The company has come out openly to explain to the public about the nature of contracts that exist between the company and the bottlers (Das 2018). The management of those Bottlers does some operations like the hiring of staff. However, Coca-Cola Company promised to review the terms of contracts to have influenced the hiring and firing processes in the bottlers; given that all the mess negatively affect the brand name of Coca-Cola.

Another challenge has been the issue of property rights and some competitors colluding with some of the bottlers to steal the formula and ingredient combinations of the Coca-Cola products. In the recent past, some bottlers have betrayed the contractual agreements with the company and sold out some syrup to competitors in the industry. According to Edeling and Himme (2018), the immediate reaction from Coca-Cola has been the termination of such contacts and lodging lawsuits against the bottlers for breach of contract. The general response to this trend was the introduction of the Coca-Cola Export Corporation to monitor the movements of the syrup up to when it is used for production.

Conclusion

Perkins(2014) states that when the company realizes that they have caused any harm to the public through the operation of the leading company or the bottlers operating under the brand, Coca-Cola commits should commit to participating in the remedial process. The company should come up with numerous channels the public can use to raise their grievances to the company when their rights are infringed (Cheng-Ju & Chien-Wei 2018). The company should allow the trade unions at the global level to act whenever there are complaints from the public concerning the operations of the company. Trade Unions and civil rights groups are always the voice blowers when it comes to multinationals breaching their contractual responsibilities and have adverse impacts on the rights of the members of the public.

The company should direct the businesses that trade with the company’s brand at the local level to engage the public on the issues concerning their grievances on the operations of the traders. The problems that cannot be solved at the local level need to be escalated to the global level to capture the company attention (Challagalla, Murtha, & Jaworski 2014). The Coca-Cola Company on several occasions has gone without realizing that some of their subsidiary producers harm human rights and go free since some victims fear to challenge them in court due to the brand's financial muscle. The company should do due diligence study on the conducts of the bottlers and other traders who use the company brand. Such business entities take advantage of the respect and loyalty the public has for the brand and mistreat the public knowing that the victims would not raise any alarm (Bakan 2016). This needs to stop as the public lose respect and loyalty for the brand as the mistreats continue.

In a bid to address the challenges affecting the workers employed by the bottlers, Coca-Cola Company needs to direct their associates to provide workers with the mechanisms of expressing their grievances. In cases where there are gross misconducts by the bottlers, the mother company needs to take actions.

Additionally, the company needs to carry out frequent audits on the local bottlers to limit misuse of resources (Bakan 2016). Close monitoring of the subsidiaries would go ahead to reduces cases of bottlers selling the syrup concentrate to competitors who try to imitate Coca-Cola products. Any misconducts and non-compliance to the set policies and guidelines should lead to severe actions taken against the culprits.

Conclusion

From the above illustrations, we realize that companies that operate far from the targeted customers are forced to invest a lot of resources in making the product available for consumers. Multinational companies like Coca-Cola Company use various strategies to carry out and manage their supply chain. The approach employed by the case in this study is unique in that the parent company, Coca-Cola Company formulates the syrup used by other contracted bottlers to manufacture the final product (Grewal, Saini, Kumar, Dwyer, & Dahlstrom 2018). The main aim of companies and any other business enterprise is to satisfy the demands of their customers. This process includes gathering information about the needs and desires of customers, gathering of the necessary resources to produce the product demanded by customers than the actual production process.

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