Supply chain management is the sharing of information to eliminate wastage by optimizing time and resources available. Every business aims to have total optimization in all its processes. Supply chain management is implemented to increase cash flow which in turn enables the company make more money. Coca Cola Company is arguably the most recognized brand in the world with its foot print in almost every country on earth. Such a massive operation requires an efficient supply chain management. This paper will analyze the strategies placed by the Coca Cola Company to optimize its supply chain and why these strategies have been so successful.
The Coca Cola Company uses the lean six sigma strategy to optimize its operations. The strategy was designed to identify and remove defects and their causes and minimize variability (Pande, Neuman & Cavanagh 2000). The projects under six sigma are driven by data and disciplined. Six Sigma was coined from a principle in statistics which states “if you start at your process’ mean value and you eliminate defects within six standard deviations of the mean and the nearest specification limit, you’ll virtually eliminate all defects or errors” (Pande, Neuman & Cavanagh 2000).
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Six sigma has five main steps which are define, measure, analyze, improve and control (Pande, Neuman & Cavanagh 2000). By carefully following these steps, Coca Cola Company has managed to be one of the most successful companies in the world. First, every customer who enjoys the company’s products receives tailored service from the system. A customer in New York will receive service tailored to the life in the big city while a customer in any rural part of the world will get service tailored to his needs.
Coca Cola Company has over 16 million retail outlets in the world and each of these outlets practice common practices, processes and capabilities. Each product though produced in different parts of the world, are of the same quality in whichever country you visit. Having many retail outlets all over the world has also made the company localized its operations in every area it operates in. This localization has enabled the company to come up with unique products in the specific areas. It has also managed to reduce transportation related costs as products do not travel far to reach the consumers (David, 2001).
The localization has made the company achieve a customer driven supply chain. Different areas or countries have different demands and by localizing its manufacturing, the company has managed to also provide a demand driven supply chain. Each retail outlet understands its area of operations intimately and Coca Cola Company allows them to come up with products that satisfy those demands.
The Coca Cola Company has also managed to segment its supply chain. Segmentation allows for use of client needs in the supply chain. Different localities have different needs in supply chain. By allowing for segmentation, the company employs more efficient supply chain methods unique to every region. Also different products require different supply chain methods. For instance, some products are efficiently delivered to the consumer through retail outlets like super markets while other products are effectively delivered to the consumer through a third party.
The Coca Cola Company has also been able to localize its customer service worldwide. To achieve best customer service worldwide, the company has enshrined a culture of continuous improvement in all its employees. It has also made employees believe in themselves. The company promotes the culture of zero defects and perfect quality in all its manufacturing outlets.
The Coca Cola company ability to implement six sigma strategies in all its bottling and retail outlets has made the company achieve excellence in what it does. Six sigma strategies must be implemented by trained professionals and followed religiously to be successful. By eliminating waste, the company improves its cash flows. Companies are no longer judged only by the accounting principle, profits, but in conjunction with other indicators.
References
Pande, P. S., Neuman, R. P., & Cavanagh, R. R. (2000). The six sigma way. McGraw-Hill,.
David, C. (2001). Mythmaking in annual reports. Journal of Business and Technical Communication, 15(2), 195-222.
