Coca-Cola is the world’s leading soft drink brand and the company has roundabout 48% of the market share. The company puts a lot of emphasis on the supply chain and distribution network, and it contributes significantly to its success, but supply chain issues are bound to happen. Today, we’ll discuss Coca-Cola supply chain issues; and key elements involved in the SCM network.
Elements of Coca-Cola SCM Network
Before discussing Coca-Cola supply chain issues, it is significant to discuss the key elements involved in the SCM process of the company, they’re as follows;
Global SC Council
Coca-Cola has established a global SC council with its bottling partners. The company developed a sub-committee around its strategies and practices and shared them with the company’s overall SC operations and functions.
Coca-Cola has developed highly strict and careful strict quality control protocols and standards around its products. The company compels its suppliers to achieve certifications in safety, health, environment, and quality.
The suppliers of Coca-Cola play a key role in the growth, sustainability, and success of the company. The SC partners of the company participate in various types of events organized by Coca-Cola like supplier innovation days and supplier relationship management programs.
Coca-Cola has got very high standards and requirements when it comes to developing partnerships with retailers; because the company values and focuses on building it in the long term. For instance, Coca-Cola has been in partnership with McDonalds since 1955.
The responsibility of a logistical team of Coca-Cola is to build transparency and visibility in the entire supply chain and distribution process. The company manages the SC network and logistical team from store shelves to the company’s warehouse.
Coca-Cola and its bottling partners invest a significant amount of resources in digitalizing the SC processes and implementing the latest technology. It comprises of launching innovative software relevant to production, 3D printing, and warehousing technology.
Coca-Cola Supply Chain Issues
Some of the main Coca-Cola supply chain issues that the company has experienced during the pandemic crisis are as follows;
The biggest challenge Coca-Cola faced was recruiting workers and retaining them overtime for the production and manufacturing of the merchandise because it comprised stocking products in the stores. The production facility of Coca-Cola requires physically demanding labor like working 12 to 13 hours a day. As a result, sales management and representatives would help the company in dealing with merchandise and production processes.
The change or shift in demand meant that Coca-Cola’s bottlers would have to amplify the production and manufacturing of aluminum cans rather than develop plastic bottles. As a result, the beverage industry was facing shortages of cans across the country. Surprisingly, it has nothing to do with the shortage of raw materials like aluminum, just the production and manufacturing shortage.
In order to meet the demands of customers temporarily, Coca-Cola started importing cans from countries like South Korea and Brazil through consolidation and integration. When the production and manufacturing line of Coca-Cola started running, the company dealt with the problem of a shortage of cans.
The pandemic crisis shut down all the operational activities of businesses and companies; Coca-Cola experienced a great increase in demand due to the high consumption of soft drinks. The storage facilities of the company started drying up. However, the company declared the increase in demand the “future of the company.”
When hotels and restaurants opened up after the pandemic crisis, the consumption of soft drink beverages got back to normal. At the time, the future consumption of Coke has been increasing consistently. The company is facing the challenge of keeping up with the increasing demand.
Ingredients Stuck in the Border
There is no doubt the bottling partners of Coca-Cola produce and pack the soft drink in proximity to the local market by utilizing local water and bottles. For instance, soft drinks in the US are made in the US, drinks in Germany are made in Germany, and drinks in China are made in China. However, the key ingredients have to cross the border and reach the bottlers so that they can keep assembling and packing coke for the local markets.
The disruption in the flow of ingredients at the border cause supply chain problem and a sudden increase in demand. As a result, people shift their attention to the other soft drinks. In order to keep things running smoothly, the company should cut down its underperforming SKU (stock-keeping units). The company also replaces and swaps drivers at the border to keep things flowing smoothly without any disruptions. It is because of the health screening of the drivers, whether they aren’t carrying any types of diseases.
Conclusion: Coca-Coca Supply Chain Issues
After an in-depth study of Coca-Cola supply chain issues; we have realized that Coca-Cola is the world’s leading soft drink manufacturing company. If you are learning about the SC challenges of Coca-Cola, then you should keep in mind the abovementioned issues that the company faced over time.
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