Summary of "Cadena de Suministro Coca Cola"

Summary of Coca-Cola Supply Chain and Distribution Strategy

Distribution Logistics & Range-to-Market Strategy

Coca-Cola segments customers by channel size (modern vs. traditional), requiring differentiated logistics strategies. Distribution models vary by channel in terms of vehicle type, dispatch frequency, product volume, and portfolio mix.

Key features include:

Dynamic routing based on daily order data to optimize distance traveled and resource use, aiming to:
- Deliver more product with fewer kilometers traveled.
- Increase asset utilization.
- Optimize distribution costs.
Tailored loading patterns and truck design per route to enhance loading efficiency and return on investment (ROI).
Monitoring of key performance indicators (KPIs):
- Perfect Order Fulfillment: Delivering complete, correct orders on time, with a target of 99.5% to achieve world-class service.
- Distribution Cost per Case: Measures transport and delivery cost efficiency.
Step-by-step segmented distribution implementation drives efficiency and customer satisfaction.

Inventory and Distribution Center Management

Focus is placed on accuracy and speed in inventory handling to boost customer satisfaction and capital productivity.

The proliferation of SKUs requires creating PELs (picking/packing units) with 100% accuracy and high speed.
Adoption of technological tools in material handling achieves greater than 99.5% accuracy.
Future Electronic Data Interchange Systems (EDIS) must evolve significantly in infrastructure and operations to support these goals.

Internal Coordination & Sales and Operations Planning (S&OP)

Effective communication—both formal and informal—is critical to anticipate daily demand-supply changes.

The S&OP framework integrates cross-functional communication to align demand and supply, linking sales, manufacturing, and strategy.

Benefits of S&OP implementation include:

Improved customer service levels.
10-40% reduction in average inventory.
Faster execution of innovation projects.

S&OP Process Steps:

Review sales volume and financial objectives with recent market data, including new product launches.
Generate baseline demand forecast using historical data plus marketing and sales input.
Plan manufacturing and logistics resources, considering constraints.
Analyze scenarios to close gaps and develop consensus resource plans.
Executive review of growth, profitability, and working capital KPIs to approve the plan.

Senior management support is essential to maximize S&OP benefits.

Supply Chain Overview: Raw Materials to Bottling

Raw materials, including secret formula concentrates and sweeteners, are produced in undisclosed locations.
Water filtration ensures neutrality, as water constitutes approximately 90% of the beverage.
Concentrate is shipped to over 900 bottling plants worldwide.
Container manufacturing (plastic, aluminum, glass) follows strict quality control; rejected materials are recycled.
Bottling plants fill about 800 bottles per minute, followed by capping, labeling, packaging, sealing, and distribution.
Coca-Cola operates a closed-loop recycling process for bottles and cans.
Quality management is embedded throughout all stages: procurement, production, employee training, and management oversight.

Distribution Strategy

Distribution is treated as a service, crucial for maximizing product reach and customer satisfaction.

Coca-Cola uses indirect distribution via intermediaries such as distributors and sellers.
Employs an intensive distribution strategy, placing products in nearly all points of sale, including:
- Kiosks, fairs, retail outlets, small stores, restaurants, gas stations, schools, sports venues, and leisure spots.
Key distribution decisions cover channel selection, market coverage, inventory, warehousing, order processing, and transportation.

Frameworks & Processes Highlighted

Range-to-Market segmentation linked with tailored distribution logistics.
Dynamic routing for daily delivery optimization.
Sales and Operations Planning (S&OP) for cross-functional alignment and resource planning.
Use of technological tools in distribution centers for accuracy and speed.
Intensive distribution channel strategy.

Key Metrics & Targets

99.5% Perfect Order Fulfillment (world-class target).
Distribution Cost per Case (cost efficiency metric).
>99.5% accuracy in distribution center order processing.
10-40% inventory reduction via S&OP.

Actionable Recommendations

Segment distribution logistics by customer channel size.
Use dynamic routing and tailored loading patterns to optimize costs and asset utilization.
Implement and support S&OP with senior management involvement.
Invest in technology to improve speed and accuracy in distribution centers.
Maintain intensive distribution to maximize market coverage.