Essay on Supply Chain and How to Improve.
Essay on supply chain and how to improve it
Description of case company (Coca-Cola South Africa)
Coca-Cola Fortune (CCF) has been operating in South Africa since 2002 as a franchise and is one of certified soft drink bottle. The Company operates from Port Elisabeth. The company has five production plants located at Port Elisabeth, Polokwane, Nelspruit, Bloemfontein, and Port Shepstone. It has a large number of workers from the diverse ethnicities of South Africa that creates an energetic, vigorous and challenging workplace.
I visited Port Elizabeth during an industrial class visit where I observed the following. The company produces a broad range of drinks including sprite, coke zero, Coca-Cola, Fanta, iron brew, Stoney and much more. The company controls the largest market share in South Africa. The factory has the following departments; Finance, internal control and IT, human resources, supply chain management, operations, commercial sales, public affairs and communication and marketing.
The following are principles which are used in governing the Coca-Cola Supply Chain department;
At all times, the supply chain department must serve clients with custom-made services in any part of the earth.
The Coca-Cola supply chain department applies the theory of client determined supply chain organization.
Clients are highly cared for through splitting up since the firm has numerous product types within its limited manufacturing structure internationally.
There is a high collaboration between company and dealers to ensure best clients services.
The Company has a plan for having less Stock Keeping Units in its operations.
The company has localized their customer service with extensive lean six sigma processes which allow it leverage best practices and plans the increase in excellence and performance.
The firm management system is centralized which allows visibility in all facilities and a fast repeat of prediction and manufacturer programs.
The company uses just in time delivery making sure that the inputs for the process arrive in time for processing into products which are transported to market in time to meet needs of customers. The company has links to supermarkets and other outlets for smooth operations. The company also works in close collaboration with canners and bottlers and other suppliers which ensure the efficient and proper functioning of the business.
The following theories are applied in supply chain department of Coca-Cola Company;
Transaction cost economics theory. This approach tries to fulfill the goal of existence of the factory. It aims to decrease the expenses associated with transactions involving decision making whether to make or buy. The firm's decision to make or buy is influenced by rate of sale, specificity of assets and mechanism of governance which are applied to mitigate the dangers of opportunity reliance in supply
Coca-Cola Company relies on the relationship of all partners and extends networks to supply chain businesses. This is bases on Network Perspective theory. This makes Coca-Cola company to compete beneficially and efficiently through supply chains firms. This makes this company develop long-term relations with supply chain business.
Coca-Cola Company looks at behavioral and ethical aspects of firm-firm, public-firm, and public-public relations to ensuring proper relationship exists. The analysis is done for all these relations from broad perspectives such as financial, moral elements as well as technical. Coca-Cola Company applies resource-based view theory where the firm’s resources and capacities are its vital assets. This makes this company gain a competitive advantage over other businesses.
The principle-agent theory is applied in coca cola company governance and control mechanism structure to alleviate the opportunities, interests which are conflicting and symmetrize information between the agent and the delegating authority. It gives incentives for firms meeting minimum standards of the principle and governance and mechanisms of control.
The company also employs game theory principle where strategic decision making is made while looking at different conflicting and cooperating characters between it and another rational firm. It aims at win-win, lose-lose or lose-win scenarios. This company also brings together various elements of complicated supply chain including human, information, capital, material, and finance forming a system which is part of the big system network of supply. It accurately understands internal and external factors shaping the firms supply performance. This is the system theory of supply chain management.
The company also employs strategic choice theory to minimize the goals which are difficult to implement. It addresses strategic problems and political forces which are related to supply chain management for it to achieve success and prosper as it markets its products. The whole contract is to function approach related to personal supply chains businesses.
Each theory discussed above has different objectives and goals in management and organizational structure of supply chain giving each a unique perspective of supply chain management. This method should be split closer to strategic, project specific, operational and corporate supply chain management.
Discussions and analysis of company operations
Lean planning, it was found that workers were given tasks to do, and they understood clearly the role of supply chain management values. Supervisors enhanced this by providing detailed information about tasks and expected worker output as a supply chain management team to execute activities of employees increasing productivity. Employees wasted less time in accomplishing their duties as they knew what their roles were and avoided unnecessary activities. Managers of supply chain also studied workers activities and possible difficulties that can arise during task execution. The firms are always ready for unprepared events that might come up and strategies to limit and reduce such effects which can be caused. The company also used supplier certification programs as part of lean sourcing. Better supplier certification buying results to less time usage in checking and processing supply. Barcoding method is used to promote data accuracy.
Demand Planning and Forecasting-It was found out that there was a balance between supply and demand restrictions during the supply chain preparation and planning phases. This meant that planning ahead ensured supply and required almost balanced meeting customers’ desires. The company applies better forecasting methods aiming at higher performance.
Supply and Inventory Planning- the Coca-Cola company adjusts plans and strategies daily to reshape according to accurate data obtained and happenings aiming at improved performance. They update the demand plan frequently showing levels of consumptions hence high sensitivity of their sales. This involves the company of goods that are selling faster or are becoming absolute in sales.
The company has Master Data Management- the company also uses business intelligence management tools during decision making. This means that there is the likelihood of high operational efficiency and better contracts with suppliers and customers. This cuts away inventory costs and minimizes resource wastage.
The company has strategic sourcing, and supplier relationship management the company ensures that there exist a good source and mutual relations with suppliers. The company encourages joint supplier relationship to enhance savings of costs through the reduction of investments on inventories increasing inventory returns. There exists joint service agreement between the company and suppliers for corrective actions to be taken when sales performance decreases beyond expectation.
The green sourcing-The company has measures to check environmental requirement checks. The firms make sure that it cuts the damages on the environment by ensuring suppliers adhere to ethical practices. These practices include green purchasing strategies where the company reduces greenhouse gas emissions making it be respected. Employees have improved health due to clean air and water, and the company incurs less environmental costs.
The company mostly uses electronic data exchange methods to send and receive data from and to suppliers, customers, and dealers. This is also enhanced through faster information processing which helps in improved decision-making. The electronic Kanban is used to imply that there are enormous steps made in operations. The Coca-Cola Company draws strategies and plans that allow the use of electronic Kanban improving efficiency and reducing the cost associated with supply chain management.
Information management- the company performance results are often posted to workers to see, giving them deep health visibility condition of the company and motivate them to work hard. This makes them improve in areas where they might be performing poorly. There are systems which are employed by the enterprise to ensure inventory synchronization and correct production allowing better decision making and reduced errors.
Lean manufacturing idea is not fully utilized in its production operations. Hence, it does not enjoy full benefits. There are system wastages regarding overproduction and higher inventory. The company looks at its output that has lean ideology used to get full benefits. The company also organizes work efficiently for greater benefits and performance.
The company uses quality management methods by placing measures to ensure proper management of quality issues during production. Fewer mistakes are observed, and customers usually receive high-quality products from Coca-Cola Company. Workers are also given formal training to make them aware of producing quality output.
The company has a well-structured Information management department. There is a point of connection for client order questions. The company has a high flow of information which minimizes confusion. Customers and suppliers have proper information about their orders. The time wasted before one gets information is highly reduced. This allows clients and warehouses including the company to have a partial visibility of data. This enables tracking and tracing of goods through the entire supply chain.
The company has Inventory management system. There are electronic matches between store inventory, safety stocks, the point of sales and inventory data calculated using the integral system. Finished goods inventories managers can control and regulate data which helps them trend and adjust company’s plans.
The company has an environmental management plan. The company uses recognized tumble oversight mechanisms to ensure that the monitoring tools never fail them. It often selects environmental system carriers which minimize carbon footprint. It also places measures in place to monitor and regulate environmental management systems of carriers. This has an effect on overall supply chain carbon footprint.
The company has efficient warehousing and transportation. The company uses cross docking. Hence, high efficiency in transportation and flexibility to market the changes are achieved. The company also does consolidation orders hence total transaction costs of clients and business are minimized.
Recommendations for the case company
The Coca-Cola Company should prudently and carefully consider all the best practices tested in this research and find ways to which they can apply and enhance them to achieve better performance. The company should also decide to investigate reasons why some activities, Kanban support, and act are not used more often and address tests they find to improve performances. The company should carry out maturity more often to scale the position quo in other features of their commercial operations.
More emphasis should be put on improving infrastructure to link market and company to facilitate proper flow of products. They should also produce their goods according to the demand of the locals. The marketing department increases the company products in rural and remote areas. The company should also introduce different quantities of their market to fit the varying economy of their customers.
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