Coca Cola

Coca Cola
Supply Chain
Background
With the curiosity of Dr. John S. Pemberton, a pharmacist in Atlanta, Coca-Cola began its journey
in 1886. He was able to create a drink that was distinct in taste than others, a flavored syrup, mixed
with carbonated water and deemed “excellent” by those who sampled it. Dr. Pemberton’s partner
and bookkeeper, Frank M. Robinson, is credited with naming the beverage “Coca-Cola” as well
as designing the trademarked, distinct script, still used today. In the first year, sales averaged a
modest nine servings per day in Atlanta. Today, daily servings of Coca‑Cola beverages are
estimated at 1.9 billion globally.
Prior to his death Dr. Pemberton sold portions of his business to various parties, with the majority
of it he sold to Asa G. Candler. Under Mr. Candler’s leadership, distribution of Coca‑Cola
expanded to soda fountains beyond Atlanta. In 1894, impressed by the growing demand for
Coca‑Cola and the desire to make the beverage portable, Joseph Biedenharn installed bottling
machinery in the rear of his Mississippi soda fountain, becoming the first to put Coca‑Cola in
bottles. Large scale bottling was made possible just five years later, when in 1899, three
enterprising businessmen in Chattanooga, Tennessee secured exclusive rights to bottle and sell
Coca‑Cola. The three entrepreneurs purchased the bottling rights from Asa Candler for just $1.
Benjamin Thomas, Joseph Whitehead and John Lupton developed what became the Coca‑Cola
worldwide bottling system. 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 Supply Chain
The Coca-Cola Company follows a unique supply chain management system where the company
only produces syrup concentrate which is then sold to various bottlers throughout the world who
hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America by
the name of Coca-Cola Refreshments. Other Coca-Cola bottlers, who hold territorially exclusive
contracts with the company, produce the finished product in cans and bottles from the concentrate
in combination with filtered water and sweeteners. The bottlers then sell, distribute and
merchandise the resulting Coca-Cola product to retail stores, vending machines, restaurants and
food service distributors.
In addition to sugar, some of the other ingredients used in the manufacturing of the syrup are
Carbonated water, sucrose, high-fructose corn syrup, caffeine, phosphoric acid v. Caramel (E150d)
and Natural flavorings. Coca-Cola has different supplier partnerships to procure these ingredients.
Coca-Cola Company follows an intensive distributing system whereby it partners up with local
bottlers operating in different countries and territories. Most of these bottlers have exclusive rights
to distribution to their predefined geographic areas. The Coca-Cola Company sets up the basic
guidelines to do business in terms of operational procedures, customer relationship management
and query management and these bottlers have some degree of freedom to develop other SOPs
relating to delivery, fleet management and developing credit lines.
The Coca-Cola Export Corporation (TCCEC) is the entity responsible for selling the concentrate
to other bottlers around the globe. TCCEC along with its regional offices located throughout the
globe establishes partnerships with local bottlers who manufacture the beverage using the syrup
provided by Coca-Cola Company and then distribute it to their respective markets.
The Coca-Cola Company establishes the basic guidelines of operations for all of its bottling
partners and suppliers so most of the operations are standardized and there is a certain degree of
centralization to most of their strategic decisions. Each bottling partner services the assigned
geographical area through a head office which controls most of the operations and it serves as the
hub for different entities in the supply chain. The bottler’s head office is working in close
collaboration with a regional office which is under the direct supervision of The Coca-Cola Export
Corporation. The bottler’s head office links the production plant with different distribution and
sales centers and multiple trade zones together to form a complete supply chain.
Coca Cola uses SAP ERP web based monitoring platform to monitor its consignments, while using
ABC classification for inventory management. JIT & TQM is used to provide efficient inbound
and outbound delivery. The production plants are located near transportation facilities like
Highways and major State Roads.
Reference:
UKEssays. November 2018. Coca Cola Supply Chain Analysis. [online]. Available from:
https://www.ukessays.com/essays/marketing/coca-cola-supply-chain-analysis-marketing-
essay.php?vref=1 [Accessed 7 August 2019].
https://www.coca-colaindia.com/about-us/our-manufacturing-footprint
https://coca-colahellenic.com/en/operations/supply-chain/supply-chain-overview/

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