Question

5. The Coca-Cola World service process is demand- or capacity-constrained?

6. How could Coca-Cola World improve its service process?

7. What is the main source of variation for Coca-Cola World and how could this variation be reduced?

Answer 1

Q.5- The Coca-Cola World service process is demand- or capacity-constrained?

The Coca Cola Company is the most valuable brand name and world largest non-alcoholic beverage company. This company was founded in 1886 in united states of America. Now it operates in more than 200 countries. Coca cola also distributes juice, energy drinks, water, and coffee. The company has partnership with more than 300 bottling and canning company worldwide. Who produce and sell coca cola beverages worldwide. The bottling partners are responsible for consumer brand marketing initiatives, handle manufacturing and merchandising.

Over the past years, Coca Cola Company has faced lots of changes in the business environment. Company create counterpart with American sweet test product however, it was commercial failure and coca cola change its strategy and return back to its old formula. Consumers become more health conscious then company lunch new product to address consumer needs, such as diet coke and coca cola zero. Company bought bottling business in South Korea which allow to access in retail store as well as makes easy to entry in Japan, Malaysia and china. Moreover, china is now largest coke consumer in world.

However non-alcoholic beverage industry is highly competitive. Coke have to compete with international companies as we as local companies where it function. In many countries where coke operates including USA, Pepsi is a primary competitor in the market. Coke capability to maintain the sales of share or get profit in the global market or various local markets may be limited because of competitors.

Water is main ingredient for Coca Cola Company. Many part of the world it is also limited resources. Company consume huge amount of water per year. Demand of water increase around the world and quality of available water decline this will increase the production cost of the company and effect on profit.

Major constrains in Demand

Coca-Cola operate in a make- to -stock environment. This procedure can assist to supply faster service to clients from available stock and lower costs sing Coke usually has a distribution procedure of majority points. The clients buy straight from the available stock list. Demand direction and distribution is hence a touched focal point. They use the uninterrupted flow method of fabrication. The merchandises are made in a uninterrupted manner and be given to be extremely standardised and automated with really high volumes of production.

Briefly outline the forecasting technique used by the company. Coca-Cola uses the prediction technique of additive arrested development utilizing a functional relationship between two or more correlative variables.

Coca-Cola 's Sales and Operations Planning Process is primarily focused on maintaining and improving forecast accuracy also including tactical market planning, customer order management, master scheduling and detailed weekly planning. S&OP were implemented at CCM (a regional division of Coca-Cola in France) when the plant was started in 1991.This typically involves a five-step monthly process comprised of data gathering and review, demand planning, supply planning, meeting with partners and executives. monitoring and managing demand and supply in a product family and volume levels. S&OP pulls together and reconciles other separate, but connected business processes including strategic planning, sales and marketing planning, financial planning, detailed sales forecasting, customer order management, master production scheduling, distribution resource planning, and rough cut capacity planning.

The market demand strategies involve the analysis of demand of the product in the market as well as the supply of the product according to the change in consumer behaviour depending on the increase and decrease of the Coca-Cola prices. The study will also analyse the effect of market forces on the demand and supply of the product. The study will also focus on the different sales strategies of the product and the factor influencing the market sales of Coca-Cola.

Conclusion

Coca-Cola is a product of daily demand. The concept of elasticity helps in determining the demand of the product if the changes are made in terms of the price of the product, in consumers’ income and change in the price of other alternative products in the market. The elasticity of demand shows how the demand for the company’s product rises at each level with the changes occurring in three different terms. Coca-Cola can get the idea of product supply to the market by knowing these terms to increase the revenue for the company. A proper analysis done over the factors can help the company in understanding the market competition and to supply its product accordingly. Coca-Cola can determine the number of products to be manufactured for supply by considering all these terms here.

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Q.6 - How could Coca-Cola World improve its service process?

Soft drinks manufacture is a competitive business. Manufacturing techniques are continually improved. This helps meet the highest quality standards for its products using the most cost effective production techniques. For example, very small changes in the shape of the can could save a canning factory millions of dollars in production costs.

The production of Coca-Cola involves two major operations:

· Creating the packaging material

· Bottling and canning the finished drink.

Packaging

For many years, Coca-Cola was produced in glass bottles. Because of the high cost of distributing bulky bottles, they had to be manufactured close to where the bottling took place. Today, this is no longer so important since new packaging methods have revolutionised the process.

Advanced bottling and canning technology makes Coca-Cola cans and bottles very light but extremely strong. The Company has invested a lot of time and money in research and development to ensure the most effective life cycle impact of its packaging.

Preparing to fill cans

Cans are delivered in bulk to a canning plant. At this stage the cans are shaped like an open cup ready to receive the liquid drink. They are not fully formed because the ring pull end has still to be fitted. After they have been inspected to check that there are no faults, each can goes through a rinsing machine to make sure it is clean and ready for filling.

Preparing the drink

Coca-Cola consists of a concentrated beverage base and a liquid sweetener which are combined to form the syrup from which the drink is made. The Company ships the concentrate to bottling and canning plants where the franchisees mix it with sugar and local water. The water is passed through a number of filters to make sure it is absolutely pure.

Carbon dioxide, which makes it fizzy, is also delivered to the canning plant where it is stored and then piped into the manufacturing process through a carbonator and cooler. The Company specifies what equipment franchisees will use to carry out these processes.

Samples are taken regularly for chemical analysis, and staff make frequent spot checks to ensure that plants are maintaining the Company's standards of cleanliness and quality. The Company provides its franchisees with the most up-to-date technology available and many of them use the latest computer technology and statistical process control methods.

Filling the cans

The packaging and the finished drink are combined by a rapid filling process. Every minute hundreds of cans pass along an automated production line and are filled with a precise amount of Coca-Cola.

As the cans move along the production line, they are seamed to include the ring pull end and produce the finished can. The ends are inspected to make sure they are smooth and do not have any gaps or leaks.

An individual code is stamped on the cans so that each one can be traced back to the point and time of production. A date code ensures product freshness. The cans now look like those you will see in the shops.

Guaranteeing the quality of the product

The manufacture of Coca-Cola is carried out by a set of processes called continuous flow production. On a production line, a process is continually repeated and identical products go through the same sequence of operations. Continuous flow production takes this one step further by using computer-controlled automatic equipment to produce goods 24 hours a day.

The Company and its franchisees use Total Quality Management procedures that encourage everyone in the plant to think about quality in everything they do. Every employee sets out to satisfy customers and places them at the heart of the production process. By continually seeking to improve every aspect of production, employees are able to eliminate problems.

Packing the end product into cases

The canners then prepare the cans for distribution to retailers such as supermarkets, shops and garages. A machine called a case former creates the casing that protects the cans as they are sorted onto pallets. The cans are stored temporarily in a warehouse before they are collected by large distribution trucks.

Bottling Coca-Cola

So far this case study has focused on the canning process for Coca-Cola. The bottling process, whether in glass or PET (plastic), is very similar. Each plastic bottle starts as test-tube size and is blown up like a balloon into the final bottle shape.

Whereas franchisees receive cans that already have the logo and any promotional details on them, bottlers apply the labels from large reels once the bottles have been formed.

At the end of the bottling line, bottles are automatically sealed with a cap immediately after they have been filled.

Just-in-time

Canners and bottlers process vast quantities of materials each week. Receiving the raw materials and delivering the finished products involves a complex sequence of actions.

The ideal solution is to make sure that the inputs for the process arrive 'just-in-time' so they can be transformed into a finished product ready for transportation 'just-in-time' to meet the needs of the retailers. At modern canning plants, the can maker is often located in an adjoining facility, with delivery through a 'hole in the wall' operation.

The packagers are involved in sophisticated supply chain networks with the supermarket chains and other outlets to ensure that this process runs smoothly. Canners and bottlers must ensure that they do not build up large stockpiles of cans waiting to be sold but they must also make sure that deliveries are not late. This is where they benefit from advanced information technology that rapidly relays figures about the demand for Coca-Cola. For example, this demand usually rises in periods of hotter weather so the packagers need to plan increased production.

Performance feedback to canners and bottlers

In addition to each canner or bottler’s own quality assurance procedures, sample bottles and cans from each market are tested regularly by The Coca-Cola Company. The results are then reported back to the packagers.

This feedback helps The Coca-Cola Company and the franchisee to work together and identify opportunities for improvement. Franchisees undergo constant training and retraining in quality assurance, and can always ask for help and advice about ongoing improvement.

Service process strategies

Business strategy of Coca Cola is Think local, act local. The integration between the local bottlers and delivery to the customers is crucial to the company’s overall efficiency and keeping the customers satisfied. Full-service vending, Direct Store Delivery (DSD), and equipment services are very important for bottlers’ business operations and profit centres.

Coca Cola has taken many steps to win back the customer and to retain the existing customer. They have created a fan page in Facebook which became a very popular with the customers and when they are connected to Facebook, They can actually keep on getting update on recent action by Coca Cola. They can send group message in Facebook. Can gain feedback from customer and provide solution online. Coca Cola is able to advertise in Facebook and gain more customers through the social site. Coca Cola also can gain all the details of the customer from the Facebook page and provide appropriate personalized service to gain more customer and also retain the existing customers.

Conclusion

To produce the world's best known product, The Coca-Cola Company has to employ the highest quality processes and establish standards which guarantee the production of a standardised product which meets consumers' high expectations each and every time they drink a bottle or can of Coca-Cola.

In order to guarantee these standards the Company has had to develop a close relationship with its franchisees based on a mutual concern for quality. Total Quality Management lies at the heart of this process involving a continuous emphasis on getting quality standards right every time and on continually seeking new ways to improve performance.

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Q.7- What is the main source of variation for Coca-Cola World and how could this variation be reduced?

Product quality has become one of the most important factors for consideration by manufacturing environments due to the increasingly competitive global market. This is especially true for organizations manufacturing a non-repairable product as the cost of warranty claims can be financially considerable and cause rapid loss of market share due to loss of customer satisfaction and confidence.

Every market has its own specificities and its own culture. The way people perceive the product or the promotion, the way they motivate their choice or purchase is unique and coca cola adapts many of its products elements in that way. First, about the product, coca cola changes some physical aspects like the colours of the product (perception) or the formulation (self-concept, group influence)*. It also adapts the packaging attributes putting more details to the quality or the aesthetic aspect (perception)* and highlighting the luxury image of the brand (brand-and country-image)* thanks to a more “Zen” and simple packaging. Moreover, the service attributes appear in a more obvious way in the every zone (uncertainty avoidance, purchase)*. There, the salespersons are especially trained to answer all the questions possible (learning and memory) about the quality and taste of the product or the way of consume, and they advise the customers in the most technical way (uncertainty avoidance) thanks to some special programmes helping to know more about the specificities of each quality and taste. The point of sales is also adapted with a more “luxurious” and personal concept (motivation, perception)* and the symbolic attributes are taken into account in the variant range (perception)* which is lighter.

Here are four tips for reducing variability:

1) Standardize materials and sourcing

2) Standardize work to reduce in-process variation

3) Standardize gaging

4) Do not be seduced by “low cost” or “magic solutions

Variability in quality, yield, scheduling and releases all cause more variability. Those, in turn, cause an increase in risk to all parties. Eliminating variability is the key to reducing risk and reducing the complexity of all the issues we have to manage in our businesses.