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Mary Joy M.

Dela Cruz

Ms. Beo

BSBA-Management

Logistics

Coca Cola Logistics Process

Introduction
It is an undisputable fact that over the years logistics has made a substantial contribution to
businesses. Today, a number of companies such as Coca Cola Company has attained competitive
advantage through an improved management of its supply chain (Cooper et al. 1992). Coca
Cola's strategy is emphasized on excellence in logistics; sourcing material management and
physical distribution relative to the production location. Coca cola relies on imported
componentized parts from a wide range of suppliers in different countries to produce its products
and assemble it in another country. The thrust behind the logistics and supply chain activities has
been the transportation industries culminating globalisation.
According to Cushmann & Wakefield (2006) the ongoing globalisation of production inculcating
business practices such as outsourcing and restructuring as well as the integration of regional
economies in the logistics market has been pragmatic within the European regions and other
parts of the world. This has also necessitated the creation of modern logistics and distribution
facilities such as distribution centres, warehouses and transfer depots to promote efficiency in the
managing the supply chain activities as a whole (Rushton et al., 2000).

The managers of Coca Cola have decided to strategically focus on China for its primary
production. This because China is endowed with raw materials such as bauxite ore and sugar
cane and factories that processes the raw materials into aluminium cans and sugar. Moreover it
has extensive supplies network in countries like India, Thailand, etc (Schwab and Porter, 2008)
who also produces some amount of sugar and aluminium. Besides China have the workforce,
energy and infrastructures including roadways, railways, waterways, ports and terminals (CIA,
2010). In support to its energy resources, China in 2009 commissioned an enormous
inexhaustible hydroelectric dam built on the Yangtze river near Yichang which is capable of
generating 1/9 of China's total power output (CGEE, 2009)

Distribution flow of Coca Cola


The manufactured coca cola in Beijing, Tianjin and Shanghai will be transported to the European
distribution centre based in Munich, Germany. In the Beijing bottling factory, the palletized
canned coke will be packed into 40ft containers and moved to the main Beijing-Hamburg
railway terminal by train. The containers will be loaded onto freight train to be transported from
Beijing to Hamburg. The train routes passes through Mongolia, Russia, Belarus and Poland to
the Hamburg rail terminal (BBC report, 2008). The rail shipment will take 15 to 18 days
(Lloyd's, 2008).
Meanwhile the palletized canned coke produced in Tianjin and Shanghai will also be packed into
40ft containers and moved to the Tianjin and Shanghai Ports respectively by train. The containers
are then loaded onto containerships bound for deep-sea shipping from the various ports which
will make a stop at Hamburg Port. The sea route linking the China ports and Europe passes
through the Southern parts of China, Malaysia, through the Suez Canal to Malta, Belgium to the
Hamburg Port (Xinhuanet, 2004). According to Lloyd's (2008) the 20,000km sea voyage takes
35 to 38days. Branch (1996) viewed shipping as the transportation of goods from place of low
utility to place of high utility. The goods may be in the form of either raw
materials/intermediate/finished product transported in bulk cargo shipment to a refinery or range
of durable consumer products shipped in containers.
In Hamburg the containers that were transported by rail from China will be unloaded and
transferred onto another train for on carriage. This is termed as . Also the remaining containers
that were shipped by sea when unloaded in Hamburg will also be transferred onto train for on
carriage. This is known as . The trains then transport the containers from Hamburg to the
European Distribution Centre in Munich, Germany. The rail route from Hamburg passes through
either Berlin-Frankfurt/Dusseldorf-Stuttgart route to Munich (Martin, 2003).
Coca Cola uses Germany as its distribution centre in Europe because it has the logistics whereby
several east-west trade routes run through Germany (Cushmann & Wakefield, 2006). Also the
centre ensures effective inventory management system, advanced monitoring and customer
information system, reliability and flexibility in distributing the coca cola to the clients across the
region (European Intermodal Association, n.d).

Filling a Gap between Supply and Demand

The Genesys program is an integrated SAP Enterprise Resource Planning (ERP) solution that
will replace CCEs legacy systems in the processes of order to cash, requisition to payment,
and record to report.
Genesys will allow CCE to shorten cycle time in these processes and be more productive. It will
also help bring more visibility into the business and improve decision making.
We are a shelf-replenishment company, a supply chain company, a sales and customer services
company, says Esat Sezer, senior vice president and chief information officer of CCE. It is
very important for us to integrate our manufacturing plants all the way up to the replenishment of
shelves in the retail outlets. Through the information side of the equation, we are basically tying
those two ends of the business process together: the manufacturing side, which drives the supply
of our product, and the shelf-replenishment side, which drives the demand part of our product.
CSC is playing a major role in expediting the delivery of Genesys across CCEs operations,
allowing CCE to deploy Genesys at multiple-country locations at a much faster pace than if CCE
had forged ahead alone.
There are a lot of technology areas that require some capacity that we might not have or some
technology areas that we might not have the knowledge about, says Sezer. So whenever we
have those knowledge gaps, we turn to our strategic partner CSC to fill in. Whenever an
accelerated deployment need arises, we leverage CSC, and we can generate value much more
quickly.

The Coca-Cola Refreshments team includes students Erinn Manby, Drew Downey, Meredith
Freeman, Kevin Jamison, Sahil Ramakrishnan, Natalie Souther, and Max Tanski. Their
faculty advisor is Ton Dieker. The purpose of their project is to reduce Coca-Cola Refreshments
total inventory costs at three in-scope plants by developing new inventory replenishment
policies. By creating three new policies and customizing policy parameters for each raw
material, they have identified a 36% reduction in total annual inventory costs.

References:
CSC.Success Stories.Retrieved from
http://www.csc.com/application_services/success_stories/78846coca_cola_supply_chain_management_success_story
Georgia Tech.2014.Atlanta Gerorgia.retrieved from
http://www.scl.gatech.edu/newsevents/release.php?id=263091
EssayUk.2003.Retrieved from http://www.essay.uk.com/free-business-essays/logistics-has-madesubstantial-contribution-businesses.php