Coca-Cola Company’s Supply Chain Management
How do CCHBC’s supply chain management practices help achieve its four major strategic aims?
Supply Chain Management (SCM) is the integration of business processes linking producer with the consumer, which ultimately adds value to the product (Wailgum 77). According to Michael Allison and Jude Kaye, strategic aims are developed due to the competitive priorities which are dimensions from which a company chooses to compete (84). Primarily, competitive priorities are employed in the factory, although the same can be used in SCM.
Coca-Cola HBC (CCHBC) is a major bottler of non-alcoholic drinks among 28 countries all over the world serving 2 billion unit cases every year (Coca-Cola Hellenic Bottling Company S.A.). It offers 500 flavors and package combinations of carbonated and noncarbonated drinks Due to the wide market in the field, the company uses Four As an approach, which includes Availability, Affordability, Acceptability, and Activation strategic aims to keep in line with the demands that are only achievable through SCM.
SCM ensures the availability of products in the right package based on feedback and actual analysis of the local environment. The products must be supplied to the places where the customer can easily access them. Through sound SCM, the customer gets the necessary refreshment. Affordability is achieved when SCM analyses the market to come up with the right packages that are occasional as dictated by the ability on the part of consumers. As such, the SCM meets the changing demands of the market and triggers flexibility in manufacturing.
Proper customer care, high efficiency, the best mode of transport, and good knowledge of customer needs to enhance the company’s acceptability. Brand names should be well developed and promoted as this plays a critical role in SCM as a proper image makes the customers associate brand with the product and prefer the one while choosing a drink to buy. Activation is set when a customer feels that this is the right brand selling its product at the right price in the right place. Activation of demand is enhanced through good displays, strategically placed coolers, racks, and fountains, among other strategies that capture the attention of the customers.
How does CCHBC use IT to improve its supply chain management performance?
CCHBC uses IT to optimize and coordinate operations within its network by implementing the best practices on a single platform. This platform facilitates the alignment of supply chain and demand planning to achieve sales and operations planning efficiencies. Information Technology (IT) can open a window for cost-cutting and make CCHBC a leader in these fast-moving consumer goods (FMCG) industry.
IT has enabled CCHBC to build consensus plan amongst the key senior managers through continuous planning as opposed to a long term planning that was used in the past. There is a forecasting manager whose responsibility is to use historical sales data and consumer information to produce demand plans weekly. Scientific methods and data mining tools are used in demand planning. The key issue about consensus is striking a balance between production and sales targets. Generally, IT enhances effectiveness, communication, and cooperation necessary in team building.
Better and faster supply chain execution depends solely on sound partnering with all customers to cut costs in the chain and have the preferred package due to innovations. Currently, CCHBC is using IT to develop customized internal systems to raise SCM efficiency and customer service (Coca-Cola Hellenic Bottling Company S.A.). The centralized database with visual marketing materials introduced in 2005 facilitates analysis, utilization, and sharing of the markets’ best practices in the whole group and ensures success in future promotional campaigns.
Works Cited
Allison, Michael and Jude Kaye. Strategic Planning for Nonprofit Organizations. 2nd ed. USA: John Wiley and Sons, 2005. Print.
Coca-Cola Hellenic Bottling Company S.A. Coca-Cola Hellenic. 2012. Web.
Wailgum, Thomas. “Supply Chain Management Definition and Solutions.” Supply Chain Management An International Journal 1. (2008): 77-90. Print.