The Magic of the Coca-Cola Supply Chain & What Companies Can Learn

Coca-Cola is a household name. With 48% of global market share and two of the world’s top three beverages, it’s no secret that Coca-Cola is a successful brand.

But what makes Coca-Cola so unique is not just its product. The Coca-Cola supply chain is a well-oiled machine with far-reaching impact and a seamless operating model.

What exactly has made the iconic brand operate so efficiently for over 130 years?

The Coca-Cola distribution strategy puts its focus on local opportunities. The product starts with Coca-Cola, which sells the necessary components to bottling manufacturing companies. From there, bottler partners manufacture, package, merchandise, and distribute the final branded product to customer vending partners who then sell it to the consumer.

With over 225 bottling partners worldwide and over 900 Coca-Cola bottling plants, this localized approach allows the company to deliver a drink from the factory straight into the hands of a customer with ease.

What are the core components of Coca-Cola’s supply chain?

The company also puts an emphasis on several other components across the supply chain of Coca-Cola which make it truly unique.

• Adoption of technology. Coca-Cola and its bottling partners are consistently investing in advanced technologies as a way to digitize the supply chain process. This includes warehouse technologies, 3D printing, and innovative solutions surrounding production.
• Logistics team. Coca-Cola logistics is a team specifically tasked with visibility into the distribution process, from the warehouse to the store shelves.
• Retail partnerships. Coca-Cola has high standards when it comes to retail partnerships and values longevity. For instance, the company has partnered with McDonald’s since 1955.
• Suppliers. Coca-Cola suppliers are seen as critical to the organization’s success and sustainability. Supplier partners participate in events like the supplier relationship management program and supplier innovation days alongside Coca-Cola.
• Quality control. The company has incredibly strict quality control standards across its various products. Suppliers are required to gain certification in quality, environment and health and safety.
• Global Supply Chain Council. Coca-Cola formed a Global Supply Chain Council with its bottler partners. Sub-committees are formed around the company’s overall strategies and best practices are shared to better the overall Coca-Cola supply chain operation.

Coca-Cola Product Touchpoints

There are four main players in the Coca-Cola supply chain system:

1. Manufacturer
2. Distributor
3. Retailer
4. Consumer

Manufacturer

Coca-Cola itself serves as the manufacturer, creating the concentrated syrup that will eventually become Coca-Cola brand products. They then sell these concentrates, beverage bases, and syrups to a bottling partner.

Distributor

Once the concentrate is sold, it is sent on to the bottling partners in a separate manufacturing facility. There, the concentrate is mixed with water, carbon dioxide, and sugar, which are locally sourced.

The Coca-Cola distribution channel strategy creates relationships with these local sources. Manufacturing plants are set up close to where sugar grows, decreasing the time needed for the delivery of goods to the plant. Local partners have the ability to choose the type of sugar to be used. For instance, in America, the sugar used comes from corn syrup. In Europe, beet sugar is often used.

It is up to the bottling partners to prepare, package, sell, and distribute finished beverages to retailers.

Retailer

The finished product operations for Coca-Cola consists of company-owned or company-controlled bottling, sales and distribution operations. Working through the Coca-Cola Export Corporation, local bottlers around the world distribute the drink in their markets.

These customers include grocery stores, restaurants, street vendors, convenience stores, movie theaters, amusement parks, and more.

Consumer

Coca-Cola is one of the most recognizable consumer brands in the world. Retailers distribute Coca-Cola and its various products into the hands of consumers around the world. It is estimated that 1.9 billion servings are issued per day.

What can you learn from the Coca-Cola supply chain?

Coca-Cola has achieved an unparalleled level of success. Yet, there are several key takeaways that organizations can learn from the Coca-Cola supply chain system and its process.

Concentrate on quality control and procurement management

Coca-Cola has a constant eye on its inventory and how each piece affects the overall supply chain. For instance, the company chooses a specific group of approved suppliers based on a stringent set of standards, including location, size, equipment level, supply and demand for raw materials, and so on. Bottling partners are only allowed to buy from this approved supplier list. This allows Coca-Cola to ensure the quality of their inventory when multiple partners are involved.

In addition, the company regularly reviews its supply chain operations. Monitoring occurs at all levels, including bottlers, Coca-Cola distribution channels, and retailers. By regularly reviewing supplier performance based on field feedback, action plans can be developed and issues that may affect the larger supply chain can be addressed head-on.

One way to get similar end-to-end insight into your warehouse operation is through a warehouse management system (WMS). Over 90% of warehouse leaders believe the functionality of a WMS will benefit mobile-equipped workers. However, mobile barcoding can provide core WMS capabilities through advanced barcode scanning—without the complexity or expense.

RFgen’s mobile warehouse solutions incorporate mobile data collection with logistics functionality. By capitalizing on mobile barcoding capabilities, companies can achieve material visibility during the production cycle, track and direct materials and incorporate Industry 4.0 technologies. This allows direct movement of employees, materials, and warehouse robotics to create an advanced materials flow and a more productive supply chain.

In addition, warehouses should focus on connecting inventory lifecycles, ensuring up-to-date changes are documented as they happen and flow into an ERP system. Reliable data capture, in addition to end-to-end visibility, will allow any warehouse to embrace agility the way Coca-Cola has.

Create strong partnerships

Coca-Cola’s supply chain structure depends on long-term collaboration with retail partners and bottlers.

Helen Davis, vice president of supply chain for the U.S. region for Coca-Cola told Supply Chain World: “The Coca-Cola bottling business was built on strong franchise leadership. As we continue our strategy of re-franchising our bottling systems across the globe, it is imperative that franchise bottlers work together to leverage the opportunities within our supply chains.”

The product itself is essentially created by one of its trusted bottling partners with locally sourced water and sugar, then distributed to a variety of food wholesalers, supermarkets, chains, and more. By centralizing decision-making and working collaboratively with its partners, Coca-Cola can deliver a quality, consistent product from the factory floor to the shelf in record time.

Creating strong strategic partnerships with trusted, experienced vendors is critical to any organization’s success. By working alongside a company with deep supply chain and mobility expertise, manufacturing entities can enhance their capabilities and address issues head-on to create lasting success.

Make technology and automation a priority

Coca-Cola sees technology and digitization of workflow as essential to the company’s overall strategic plans and initiatives. A few of the types of technology they embrace include:

• Warehouse technology
• New block production lines
• 3D printing to manufacture bottles and cans
• Artificial intelligence in procurement
• Streamlined software for enhanced visibility

For manufacturers in today’s market, this type of technology is not a pipe dream for large companies like Coca-Cola. Rather, all levels of manufacturing entities can embrace digital automation, enabling employees to respond faster and work smarter to deliver optimal workflows.

There are numerous ways to do this, but one way is by utilizing mobile automation through the use of barcode scanning on handheld devices. This process eliminates the need for manual processes and data entry, all while providing accurate inventory management.

Barcode and mobile scanning is a growing trend too, with 59% of respondents to the RFgen Digital Inventory Report noting an intent to add mobile scanning to their warehouse automation mix.

After-sales logistics

Whatever the product, Coca-Cola has one goal: to send the goods from its warehouses quickly. The logistics structure designed by Coca-Cola allows them to do just that, meeting the needs of the customer through transfer, storage, and placement of inventory.

Logistically, Coca-Cola does this by manufacturing products more frequently, establishing production plans close to its customers, including daily interaction between all points of contact on the supply chain and the main site, and adhering to the same after-sales process for all supply chain participants.

“The market has shifted to an on-demand environment. The expectation is that consumer demands are delivered with speed. The challenge is to be able to keep up with changing consumer preferences at an efficient and low cost,” says Davis to Supply Chain World.

Coca-Cola is not alone in this shift. Our customers have seen a 67% increase in surging customer demand recently. This type of increase dramatically impacts any type of pre-existing supply chain structure.

The Future of Inventory Management and Mobile Technologies

Manufacturers must turn to new ways of inventory management to meet the challenge. Mobile barcoding software, for instance, can directly integrate with enterprise systems to enhance real-time performance and visibility.

Barcode scanning, mobile devices, and warehouse management solutions are proven to boost production, impact supply chain management, and update outbound shipping and warehouse operations. The result is greater efficiency across the product lifecycle, setting the foundation for long-term success.