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Purchasing and Supply Chain Management of the Coca-Cola Company

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Purchasing and Supply Chain Management of the Coca-Cola Company
Table of Contents
  1. Introduction
  2. Findings on the impacts of the six rights to the Coca Cola Company
  3. Conclusion
  4. Reference list

Introduction

Supply chain management refers to the process through which businesses manage linkages of networks; concerning the supply of goods and provision of services to their established customer bases, and also their potential business inputs from suppliers (Haag et al., 2006).

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On this basis, therefore, supply chain management is a complex process involving strategic plans geared towards maintaining and monitoring the supply of goods and services; which a certain company may be offering or purchasing from another. The Coca-Cola Company is a multinational corporation whose supply links have to be maintained in its operational countries, so as to ensure that it accomplishes its production and supply targets. Examples of supplies include the supply of raw materials the company uses in its production process, the supply of labor and other human resources; as well as the supply of its finished products to its established customers (Bosanko and Braeutigam, 2000).

Findings on the impacts of the six rights to the Coca Cola Company

The Coca-Cola Company is one of the largest multinational corporations in the world; operates in approximately one hundred and twenty countries. This diversity of the company’s operational bases makes its supply chain of distribution complex; requiring a strategic plan on how it can be maintained. The management of the company’s chain of distribution must thus involve the six rights of purchasing and supply chain of distribution; so as to be effective in its operational activities. Various impacts of these six rights have been experienced in various companies, making them prosper in their business activities. In a worldwide context, supply chain management is a very crucial tool to enhance efficiency in the supply of goods and provision of services among businesses (Garrison et al., 2007).

The six rights of supply chain management have impacted the supply of goods in the Coca-Cola Company in various ways (Haag et al., 2006).

First, the distribution network configuration has to be effectively managed so as to maintain a well-established supply base. In this aspect, the company has to ensure that it maintains its supply bases at various places. This process will involve the supply of raw materials which must be maintained and managed well, so as not to affect the company’s production level. The Coca-Cola Company, for example, has to ensure that its supply for fruits, water, and food colorings as well as the labor force among others; are managed well so that the company does not go short of such requirements. This is done to ensure that, the company does not fall short of supplies in its production process towards achieving the target of supplying its commodities to the desired and the planned markets (Garrison et al., 2007).

The company also has to ensure that, it maintains its distribution centers for its commodities which must not be interrupted by any new supply base. For instance, the Coca-Cola company must maintain its original supply of commodities to its customers; despite contracting to supply its commodities to the Olympic Games. In this aspect, therefore, this right has to be put into consideration so as not to affect the original permanent supply trend, as the business paves the way to broadening its supply base even though it is within the short run. Generally, the Coca-Cola Company should ensure that the contract with the Olympics Games does not interfere with its existing supply bases (Garrison et al., 2007).

Secondly, their distribution strategy has to be considered within the supply chain management. Here, strategies on how operations will be controlled are instituted such that, the company decides whether to be located at a central point or to be located at various stations. Also, the mode of delivering the services and the distribution of the goods and services are considered, which will enhance effectiveness in the delivery process. The Coca-Cola company should ensure that the distribution of its commodities to the Olympic Games is effective enough, so as to enhance its external efficiency (Garrison et al., 2007).

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More so, the process of transporting the commodities to be offered will also be an important aspect to consider. Goods can either be transported through land ways, waterways or airways. The mode of transport to be chosen will depend on the urgency of the commodities, and the type of the commodities among others. It is thus the role of the company to choose an efficient mode of transport, which will not interfere with its supply chain of distribution. The prevailing modes of transport are also another important aspect to consider, so as to determine appropriately how to maintain the supply chain appropriately (Haag et al., 2006).

Thirdly, the right to information is of crucial importance in managing a supply chain of distribution. In this case, valuable information concerning various factors affecting the company has to be considered. Factors like demand levels, speculations on supply of related commodities and services and technological inventions among others have to be considered. The company should therefore employ appropriate modes of communication, which will keep the company well linked with its supply bases.

In this respect, therefore, the Coca-Cola Company should be well linked with an efficient communication network; so as to ensure that market information is received on time so as not to interfere with its supply channels (Haag et al., 2006).

Fourthly the management of inventions in the company should also be considered; where the company should ensure that it strives at acquiring the raw materials which will enhance both quality and quantity production. In-service programs should also be introduced to the employees, so as to increase their efficiency in production which will help maintain the level of production; hence maintaining the company’s supply channels. More so, finished goods should also be packed in a manner that will enhance their distribution to markets; enhancing the speed and also maintaining the buyers who in the long run lead to the management of the supply channels (Bosanko and Braeutigam, 2000).

Based on this argument, the Coca-Cola company should apply inventory management so as to ensure that it beats the level of production as it contracts to supply extra commodities; to the Olympic Games on top of its already existing supply level (Bosanko and Braeutigam, 2000).

Logistical costs should also be reduced to the minimum by application of trade-off techniques; which means that the company should manage its truckload appropriately. The Coca-Cola Company should, for instance, ensure that, during low market orders the company manages its production level, so as not to incur losses in case the market coverage contracts. The company should thus keep a watch on the trend of its supply levels; so as to ensure that the level of production goes hand in hand with the supply channels prevailing for the company. In the current situation where the company is to supply commodities to the Olympic Games on top of its prevailing supply levels; the company is supposed to expand its production levels as it will have a higher truckload during the Olympic Games (Garrison et al., 2007).

The most important thing the company should consider as it expands its production level; is to maintain the aspects of its commodities so as not to lead to the production of inferior commodities, leading to market shrinkage (Haag et al., 2006).

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Lastly, the company should ensure that; as it contracts to supply its commodities to the Olympic Games, its cash flows are still maintained. Maintenance of cash flows means that all its payment terms, as well as receipt terms, are well aligned within the supply chain. More precisely the company should ensure that its financial dealings with its supply bases are well organized; in a way capable of avoiding the inability to meet internal expenses in the short run.

The supply of raw materials, information and human resources among other production inputs; should be closely monitored in terms of their prices and their terms of payments so as not to lead to inconveniences in the company, as it prepares to expand its production following the new supply base of its commodities at the Olympic Games (Garrison et al., 2007).

The cash inflow of the company should also be put into consideration before contracting to supply its commodities to the Olympic Games. This will ensure that the company effectively manages to expand its production level, towards achieving the target of supplying its commodities to the Olympic Games (Bosanko and Braeutigam, 2000).

Conclusion

The Coca-Cola Company is one of the largest multinational corporations should ensure that it incorporates the above six rights of supply channel management; so as to ensure that it manages to supply its commodities to the Olympic Games sufficiently. The management of the company therefore should steer the company towards achieving its targets, by employing these six rights of supply channel management.

Reference list

Bosanko, D. and Braeutigam R., 2000. Managing Business Supplies. 2nd Edition. New York: Wiley Publishers.

Garrison J., Noreen, E. and Brewer P., 2007. Supply Management Strategies for a Prosperous Business. 5th edition. New York: McGraw-Hill/Irwin Press.

Haag, S., Cummings, M. & McCubbrey, D., 2006. Management Information Systems for the Information Age. (3rd Edition). Canada: McGraw Hill Ryerson Press.

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