Letter of transmittal

January 29, 2019

Mr. Rubel

Assistant Professor

Department of Management Studies

Jahangirnagar University

Subject: Submission of the Report on “Supply Chain Department of Coca- Cola” Company.

Dear Sir,

It is great to say that finally, we get ready to prepare the report on the Supply Chain Department
of Coca-Cola according to your instruction as a part of course requirements. According to your
instruction, our report should highlight the supply chain of Coca-Cola. We have provided the
findings that we have derived from our exploration in this product.

We are highly pleased to submit the final report. Your valuable advice, suggestion, and guidance
have helped us to prepare the report with ease. We will be very glad if you kindly accept this
report.

Sincerely Yours’

On Behalf of My Group

Kamrunneher Joti

ID No: 1509

5th batch

Department of Management Studies

Jahangirnagar University

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 Executive Summary

The Coca-Cola Company was first established in 1886 by Dr. John Stitch Pemberton. Today the
company is the world’s leading manufacturer in the beverage industry, operating globally in more
than 200 countries with its head office located in Atlanta, USA. It produces more than 300beverage
brands and over 1.06 billion drinks are consumed per day around the world. As the leading
beverages company in the world, Coca Cola almost monopolizes the entire carbonated beverages
segment. Beside it, Coca Cola also maintains their reputation as the leading company in the world
using PESTLE analysis so that Coca Cola can examine the macro-environment of Coca Cola’s
operations.

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Table of Contents
Chapter-1......................................................................................................................................... 4

1.1 Introduction ...................................................................................................................... 4

1.2 Background of the report.................................................................................................. 5

1.3 Objectives of the report .................................................................................................... 6

1.4 The methodology of the Report ....................................................................................... 6

1.5 Limitation of the reports ....................................................................................................... 6

Chapter -2 (Theoretical Background) ............................................................................................. 7

Chapter-3: Overview of Coca-Cola ................................................................................................ 9

Chapter-4: Supply Chain Department Functions of Coca-Cola ................................................... 12

4.1 Supply Chain Networks ...................................................................................................... 12

4.2 Raw Materials of Coca-Cola ............................................................................................... 13

4.3 Manufacturer or Bottle Plant .............................................................................................. 14

4.4 Warehouse /Distributions.................................................................................................... 15

4.5 Wholesaler and Retailer, and Final Customers ................................................................... 16

Chapter-5: Analysis and Major Findings ...................................................................................... 17

Chapter-6: Recommendation ........................................................................................................ 18

Chapter-7: Conclusion .................................................................................................................. 19

References ..................................................................................................................................... 20

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Chapter-1
1.1 Introduction
The Coca-Cola company is the ‘world’s largest beverage company and is the leading producer and
marketer of soft drinks. Today, Coca-Cola is consumed throughout the world at the rate of more
than 600 million times per day and this figure is continuing to rise. However, Coca-Cola is not the
sort of company to live in its past glories instead it looks to the future as a challenge and constantly
seeks new markets and ways of increasing its market share.
It is the world’s largest producer and distributor of syrups and concentrates for soft drinks. As we
all know, the Coca is today’s one of the biggest corporations that offers different refreshment in
form of a soft-drink. But aside from their historical success, the Coca Cola Company is still the
atypical business that is affected and at the same time affecting the different type of communities.
Coca-Cola has sold more than one billion servings every day. More than 10,450 beverages are
consumed every second. The company achieved earnings of $4,347,000,000 in 2003. It is present
on all seven continents and is recognized by 94% of the world population. How did Coca-Cola
grow from its humble roots as a home-brewed Georgia-based patent medicine to be the
international soft drink powerhouse that it is today? Coca-Cola used numerous technologies to
achieve its rise to the top of the soft drink industry, defining new technologies and establishing
paradigms that popped the status quo like a cap from a soda bottle. Through technology, Coca-
Cola perfected Coke as a beverage and spread it throughout the world. Even today, the US soft
drink industry is organized on this principle. "The Coca-Cola Company" is now the largest soft
drink company in the world. Every year 800,000,000 servings of just "Coca-Cola" are sold in the
U.S alone.

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1.2 Background of the report
Today’s supply chain management practices involve complex processes that keep innovating with
the intent of adding value and superior performance. Vanathi and Swamynathan (2013, 1921)
assert that to be a leader in the ever growing competitive world, firms must enhance their process
and capabilities to stay on top of their game. Juran and Dershin (2010) make a point that the supply
chain does not function on a single process, but a collection of processes that makes up a system
that functions to meet customer expectations. In order to be able to beat competitors or do well,
firms must make sure their capabilities or processes are performing better than current practices in
the industry or at least are able to do activities and processes at acceptable levels. All supply chains
have their capabilities, development or competency levels which shows how they can perform.
Supply chain maturity as a concept can show how capable supply chains are at a point in time.
(Kyratzoglou, 2013.) A different level of competence in supply chain management is achieved by
implementing different management practices (Frederico& Martins 2012, 1). Companies that do
not explore their capabilities would surely be left in the wilderness of convention. According to
Chen, Defee, Gibson, and Hanna (2014), most companies are at the beginning stages of their
supply chain development, while only a few have reached their craved level of supply chain
maturity. For this reason, the need for assessment of maturity level of supply chains has become
an important reason for process enhancement. Coca Cola Ltd as a company holding the highest
market share in the soft drink beverage industry in Ghana would need to have a very competent a
capable supply chain that can deliver nothing less than customer satisfaction. How the firm
controls its supply chain processes show how they can perform? The aim of this research work is
to find and gauge the competency level of the supply chain process management at Coca Cola
Ghana Ltd.

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1.3 Objectives of the report
The main purpose of this research work is to rate the current level of supply chain maturity of the
case company. The research aims to capture intelligence on how current activities in the supply
chain of Coca Cola are being carried out, assign a level of maturity on how current supply chain
processes are managed in the company and aid in mitigating risks by pointing out activities that
can be enhanced for better performance of the supply chain.

1.4 The methodology of the Report

To make this report, we need to collect different data. Those data and information were collected
from various sources. Such as Primary and Secondary which is shown below:

 Primary data:

We couldn’t collect any data from the primary source. We mainly focused on secondary data.

 Secondary data:

We have collected our secondary data from the Internet. The links are given in the reference
part of the report.

1.5 Limitation of the reports

While doing this project we had to face some limitations. These are as follows-

 This study has kept limited on analysis. There is no formal test on any hypothesis base as
it is a procurement management theme.
 Time is the key constraints of this report.
 To perform employee survey became impossible because we was not directly involved
with the Supply Chain Management team.
 All the Information is not easily accessible or not permitted to disclose according to the
company policy, rules and regulations on the disclosure of confidential information.
 It was also difficult to talk with different vendors.
 We also faced problem in communicating with my university supervisor due to political
unrest.

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Chapter -2 (Theoretical Background)
The global business environment is in a state of transition, being influenced by globalization,
strategic alliances, merger and acquisition, business process and reengineering. These strategic
approaches are altering the focus of overall management of businesses and influencing the ultimate
goal – reaching the end-users by shifting from mass marketing to customized marketing and
emphasizing relationship-based marketing in all fields. The rapid advancement of information
technology is also having its effect on businesses and their management. These changes in turn
effect the management of supply chains of all businesses. Generally speaking, the widespread
success of any business depends on the efficient utilization of its supply chain, which links all the
participants and players of that particular business. The chain usually starts from the gathering of
raw materials or goods and finishes when the good is supplied to the ultimate end-users, the
customers. The effective and efficient management of supply chains is challenging, and requires
clear understanding of the components of supply chain management (SCM). SCM is usually
concerned with managing the chain involving all the participants of the supply of particular
product or service starting at the very core of a business. Competitors are also considered a part of
the supply chain network and managed under the chain. As a result SCM is considered to be an
integral part of the core competencies of a business, enhancing competitive advantage over its
competitors.
Various studies have indicated that supply management is one of the core functions of an
organization – whether production oriented or service oriented. This supply management concept
has evolved over the years from being simply a focus on purchasing to encompassing other related
areas including the ultimate supply to the end users. Kopczak and Johnson (2003) observed that
there are many views of supply chain management and some are quite elaborate and focus on
operations, and others on information management. Burt et al. (2003) in their analysis of the
growing importance of SCM suggested that a future focus would be on ’Kaizen’ or continuous
improvement, because this is being recognized as one of the core functions of corporate
importance. These authors have also highlighted that supply management is crucial for
organization’s strategic planning functions. Several researchers have also focused on the evolution
of supply chain management from simply purchasing or procurement to incorporating other
functions including logistics and transportation and information management, among others.
A brief review of the history of the development of SCM reveals that the importance of purchasing
function was referred to as far back as 1832 in Charles Babbage’s book on the economy of
machinery and manufacturing (Monczka et al. 2002, Burt et al. 2003). Monczka et al. (2002)
suggested that the greatest development of purchasing occurred after the 1850s when the American
railroad went through a growth phase. This lead to the recognition of purchasing as a distinct
corporate function, which makes a contribution to overall company profitability. The essential
elements of the modern purchasing functions of the supply chain developed in the period from
1900 to 1939 were applied in World War I to purchase of war materials, with a particular focus on
procuring raw materials. During World War II (1939-45), the corporate significance of purchasing
inputs was increasingly recognized, and courses in business logistics were offered in various US
universities, but the post-war phase was quieter as the number of market-driven firms increased in

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the USA (Monczka et al. 2002). According to Monczka et al. (2002), even though value analysis
techniques developed, pioneered by General Electric in 1947, the emphasis was on satisfying
consumer demands and requirements of a growing industrial market. Burt et al. (2003) also
observed that post-war years did not see much growth in research into input purchasing, as
emphasis was given on marketing, finance, operations and research and development. Purchasing
incurred a significant portion of costs of goods sold, but was not managed by skilled personnel.
Interest in materials management grew around 1960s to 1970s and the focus was more on solving
the problems from a total system viewpoint for an organization rather than the individual function
(Fredendall and Hill 2001, Monczka et al. 2002, Burt et al. 2003). During this time the purchasing
managers emphasized multiple sourcing through competitive bid pricing, and the major focus of
buyers was on purchase price and the prevention of line shutdowns. Suppliers were rarely viewed
as value-adding partners.
By the end of 1970s and the beginning of 1980s, the world business situation changed drastically
and was influenced by globalization, automation, technological change, increased inflation,
international competition and strategic alliances. These changes affected the SCM and gave birth
to an integrated approach to SCM, where the demand and requirements of the customers and role
of suppliers were accorded increased importance. In recent years, purchasing and materials
management have been considered vital in adding value to the overall organization and increasing
its profitability (Burt et al. 2003), and in meeting the challenge of worldwide competition, rapidly
changing technology and customer expectations (Monczka et al. 2002). These changes have
increased the profile of SCM in the success of an organization by emphasizing the fact that supply
managers are active participants in the organization’s strategic planning process. Thus differing
SCM definitions have emerged highlighting the importance of supply stages for the overall success
of an organization.

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Chapter-3: Overview of Coca-Cola
Coca-Cola history began in 1886 when the curiosity of an Atlanta pharmacist, Dr. John S.
Pemberton, led him to create a distinctive tasting soft drink that could be sold at soda fountains.
He created a flavored syrup, took it to his neighborhood pharmacy, where it was mixed with
carbonated water and deemed “excellent” by those who sampled it. Dr. Pemberton’s partner and
Frank M. Robinson, is credited with naming the beverage “Coca-Cola” as well as designing the
trademarked, distinct script, still used today Among the biggest challenges for early bottlers, were
imitations of the beverage by competitors coupled with a lack of packaging consistency among the
1,000 bottling plants at the time. The bottlers agreed that a distinctive beverage needed a standard
and distinctive bottle, and in 1916, the bottlers approved the unique contour bottle. The new Coca-
Cola bottle was so distinctive it could be recognized in the dark and it effectively set the brand
apart from the competition. The contoured Coca-Cola bottle was trademarked in 1977. Over the
years, the Coca-Cola bottle has been the inspiration for artists across the globe — a sampling of
which can be viewed at the World of Coca-Cola in Atlanta. Check out a preview of the latest art
exhibit. Images of few of Coca Cola Company Brands.

Company Background

The Coca Coola Company is the largest beverage business in the world serving more than
200countries and offering more than 500 brands.

Name The Coca Cola

Company Industries served Beverages
Geographic areas served Worldwide
Headquarters The U.S.
Current CEO Muhtar Kent
Revenue $ 48.01 billion (2012)
Profit $ 9.01 billion (2012)
Employees 146,200
Main Competitors PepsiCo Inc., Dr. Pepper Snapple Group, Inc.,
Unilever, Groupe Danone, Kraft Foods Inc.,
Nestlé S.A., and others.

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Mission

According to Coca-Cola, “Our mission statement is to maximize shareowner value over time. In
order to achieve this mission, we must create value for all the constraints we serve including our
consumers, our customers, our bottlers, and our communities.”

The Coca Cola Company creates value by executing a comprehensive business strategy guided
by six key beliefs:

1. Consumer demand drives everything they do.

2. Brand Coca Cola is the core of our business.

3. They will serve consumers a broad selection of the nonalcoholic ready-to-drink beverages they
want to drink throughout the day.

4. They will be the best marketers in the world.

5. They will think and act locally.

6. They will lead as a model corporate citizen.

The ultimate objectives of our business strategy are to increase volume, expand our share of
worldwide nonalcoholic ready to drink beverages sales, maximize our long-term cash flows, and
create economic value added by improving economic profit. The Coca Cola system has more
than16 million customers around the world that sells or serves our products directly to consumers.
They keenly focus on enhancing value for these customers and helping them grow their beverage
business. They strive to understand each customer’s business and needs, whether that customer is
a sophisticated retailer in the developed market a kiosk owner in an emerging market. There are
nearly6 million people in the world who are potential consumers of the Coca-Cola
Company’s products. Ultimately, our success in achieving our mission depends on our ability to
satisfy more of their beverage consumption demands and our ability to add value to customers.
They achieve this when they place the right products in the right markets at the right time.

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Vision:

The vision of Coca-Cola is the framework for their guides of every aspect of its business. It is
presented in 6Ps:

1. People: Be a great place to work where people are inspired to be the best they can be.

2. Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy
people's desires and needs.

3. Partners: Nurture a winning network of customers and suppliers, together they create mutual,
enduring value.

4. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable
communities.

5. Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.

6. Productivity: Be a highly effective, lean and fast-moving organization.

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Chapter-4: Supply Chain Department Functions of Coca-Cola
4.1 Supply Chain Networks

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CCS is one of the Coca-Cola system’s largest bottlers in Africa, operating 18 bottling plants and
directly employing more than 7,900 people in East and Southern Africa.

Supply Chain Management of Coca Cola Company Global business is organized into six
geographic Operating departments: 1. Africa 2. Pacific 3. European Union 4. Latin America 5.
Asia 6. North America

4.2 Raw Materials of Coca-Cola

All CCE’s products contain agricultural ingredients and its business depends on the long-term
availability of these crops. In particular, CCE relies on both sugar beet and sugar cane. CCE is
working with stakeholders to understand the different environmental effects of these two
ingredients and their supply chains, how these can be mitigated, and how to support the wider
sugar industry in taking action. Coca-Cola and WWF are working on a set of Sustainable
Agriculture Guiding Principles, specifically for suppliers of agricultural ingredients. It is also
collaborating with Europe’s sugar beet processors on a farm-level self-certification tool, part of

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the Sustainable Agriculture Initiative Platform, and with the Rainforest Alliance looking at
sustainability risks and best practice.

4.3 Manufacturer or Bottle Plant

Popular carbonated drinks manufacturer Coca-Cola opened its 43rd bottling facility in China at
Shijiazhuang in October 2013. Located in the Gaocheng Economic Development Zone, it is the
company’s first facility in Hebei province. The Coca-Cola Company announced a $106m
investment on the new Chinese plant in August 2011 and held the groundbreaking later that year.
Construction was completed in about two years. With the opening of this facility, the soft-drink
manufacturer now has plants in all five provinces of North China. The facility will provide direct
employment to 2,000 people and indirect employment to 20,000.

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4.4 Warehouse /Distributions
The Coca-Cola Company can be looked upon as a global business that operates on a local scale
and this has been possible because of the Coca-Cola system that includes the company itself and
its more 250 bottling partners across the globe. The Company produces and sells and the beverage
bases, concentrates and the syrups to the bottling operators and they manufacture, packages and
distribute the final beverages to the vending partners and customers who then again sell the
products to the consumers (Coca-Cola, 2014). The bottling partners work in close relation with the
customers i.e. the restaurants, grocery stores, the convenience stores, amusement parks, and the
movie theatres so that localized strategies that have been developed in partnership with the
company can be executed efficiently (WordPress, 2015).
Thus the points of sales the products of Coca-Cola are cauterized into:

 Distributors or wholesalers
 Corner stores, supermarkets or retailers
 Cafes, nightclubs, and restaurants
 Petrol stations

In the context of its operations in Australia, the Coca-Cola Amatil is the bottling partner of the
company and it is the largest bottling partners in the Asia-pacific region.
The distribution system can be represented as follows:

[Source: WordPress, 2015]

The Distribution Strategy of the Company can be represented as follows:

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 [Source: Christopher, 2006]
Thus the Company uses both direct and indirect selling. In the case of direct selling the products
are supplied in the shops through their own transport and in case of indirect selling, the company
maintains whole sellers and agencies that cover different regions.
4.5 Wholesaler and Retailer, and Final Customers

Direct and Indirect Selling of Coca-Cola

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Chapter-5: Analysis and Major Findings
 Majority consumer says that Coca-Cola keeps refreshing capacity & they also know the
other brands of soft drinks.
 Consumers take other Product occasionally when Product is not available in that place.
 Most of the consumer influences by the TV commercial & their most preferable TV
advertisement.
 Most of the customer soft drinks. They feel prestigious as well as mobility while they use
Coca-Cola
 Most of the customer gets product shop nearby home.  Price and quality both are
important for any product. The maximum number of customer does use it for its reasonable
price.
 The large portion of customer who is using Coca-Cola, the cause of its quality and price.
 Consumer considers various matters when they take Coca-Cola. Such as color, taste, brand
image & price. But they prefer more “Brand image as well as taste”
 Most of the consumer whose most preferable brand is Coca-Cola; they also want to change
in quality & taste of their brand. But they are very satisfied with the pricing strategy of
Coca- Cola.
 There are many drinks brand with different prices & bottle sizes in the market.
 The advertising is lower in media. In term of media spending, Check product spends more
on Coca-Cola. Coca-Cola can compete with them by spending more money on media to
strengthen the image of their brand.

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Chapter-6: Recommendation
The recommendation of Coca-Cola Company is based on performing various valuation models,
which include HR practices, economic profit analysis, relative valuation and a fundamental price
to an earnings valuation model that revealed the Coca-Cola Company to be overvalued. Even
though they find the stock to be overvalued and they feel that KO has some promising outlooks as
well as possible challenges in the near future and they want to recommend it as a hold instead of a
sell. The Coca-Cola Company is the number one company within the non-alcoholic beverages
industry. They have a 20- year standing of being the leader and investors know that the Coca-Cola
Company has an extraordinary reputation for maximizing shareholder value. Opportunities that
exist for the company in the future is expanding market share in the non- carbonated beverages
segment, a restructuring of their business model, and better consistency of earnings results. A
challenge that the Coca-Cola Company is facing is the struggle with their global competitors in
the fact that their HR practices are greater and less than coke. If coke wants to more reputation in
the world they must produce more incentives for employees from which they more have done work
hard and produce good quality. Their new management team needs to work on implementing
cohesive goals between the two to reach the Coca-Cola Company's long-term growth potential.

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Chapter-7: Conclusion
The demand for Coca-Cola is increasing day by day in developing countries like Bangladesh. It
removes our thirstiness & makes us fresh & comfort. With this taste and feelings is working to
provide the best quality product at a reasonable price. It is very much important for Coca-Cola to
ensure customer satisfaction in surviving in this market as this is a very competitive market and
customers are both quality & price sensitive.

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Linnander, E., Yuan, C., Ahmed, S., Cherlin, E., Talbert-Slagle, K., & Curry, L.
(2017). Process evaluation of knowledge transfer across industries: Leveraging
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