Coca Cola

Coca-Cola, Fulfilling Customer’s Request

Coca-Cola is the world's largest beverage company, with an operation reach covering over 200 countries and six operating regions including Eurasia &Africa, Europe, Latin America, North America, Pacific and bottling investments (Who We Are). Coca-Cola prides itself as a global company that operates on a local scale. Through partnerships with local bottlers, distribution carriers, and merchants, Coca-Cola is able to effectively monitor the pulse of local market conditions that strongly effect the overall service level offered in those markets. Coca-Cola is one of the world's most respected companies and a brand with substantial global appeal and recognition. Coca-Cola's distribution centers, as noted above, allow them to quickly respond to regional variations and adjust for specific demand and supply pressures. (The Coca-Cola System).

Coca-Cola should continue to attempt to improve their service levels and ability to recognize as well as respond to smaller markets. In an effort to be able to offer personalized service to address local tastes, culture, and priorities, Coca-Cola in 2007 began collectively working with their largest bottling partners in order to determine whether the collection and internal exchange of economic, social, and environmental data. While this is a potential avenue to creating specific regional preferences and better serve customers in that area, the cooperation and exchange of such information may have not only political ramifications, but also legal constraints. Additionally, the level of corporate willingness by bottlers to allow Coca-Cola the ability to secure their private information might not be an easy road given the relationship between Coca-Cola and their bottlers especially in light of Coca-Cola's strategic decision to incorporate its own wholly-owned bottler so as to largely limit leverage potential by bottlers (The Coca-Cola System).

Financial Measures of Performance and Supply Chain Management Techniques

Coca-Cola's ROE is 26.33% as also illustrated in the below chart (see fig. 1). “Return on Equity refers to the net income returned to shareholders as a percentage of shareholder's equity” (Return on equity). The number allows shareholders to consider how much profit Coca-Cola is creating with each dollar that shareholder's invest in the company. PepsiCo offers a ROE of 27.66% and 27.55% for Dr Pepper Snapple Group (PepsiCo Return on Equity; Dr Pepper Snapple Group Return on Equity). Overall, for the competitive set, it appears that each company is operating at that market's expected ROE. One is lead to believe that Coca-Cola's supply chain is, at least, working at a level comparable to its major competitors.

(Fig. 1) Graph Depicting Cola-Cola's Five Year Return on Equity.

Source: "Coca-Cola Return on Equity."

ROA

Coca-Cola's ROA for the 12 month period ending March 31, 2013 is reported as 10.6% and recent quarterly trend numbers are provided in the chart below (see fig. 2). Compared to competitors, Coca-Cola is performing fairly on this financial measure as shown in the lower chart shown below (see fig. 3). “Return on Assets is a consideration giving insight as to how profitable a company is in relation to its total assets” (Coca-Cola Company). Looking at an ROA allows shareholders to consider what kind of efficiency a company's management is utilizing its assets in order to create additional earnings for shareholders (Return on Assets). Planning processes appear to actually be consistent compared to Snapple and Pepsi processes. Coca-Cola appears to be only slightly better utilizing its assets in production processes compared to those two competitors.

(Fig. 2) Trend Depiction of Coca-Cola Company ROA Over The Ten Past Quarters.

Source: "Coca-Cola Company."

(Fig. 3) ROA Comparison of Coca-Cola and its Competitors.

Source: "Coca-Cola Company."

Little’s Law

With regard to Little's Law, Coca-Cola holds cycle time and waiting information guarded so as to not allow competitors strategic information as to production capabilities or signal scheduling decisions. However, given Coca-Cola's international breadth, total annual revenues and market maturity, one would expect such information to be similar to Snapple and Pepsi. The "big three" soft-drink manufacturers appear to be on even footing given the ratios considered.

Coca-Cola's Supply Chain Overview

A presentation by Mark Lynch, Director, Supply Chain Capability, for Coca-Cola allows us an in-depth view of Coca-Cola's supply chain strategy and value proposition. As a note for the following slides, DOIP refers to Coca-Cola's Demand, Operations & Inventory Planning. The below slides include information not only to describe stages of the Coca-Cola supply chain overall, but also a look at small-scale planning and constant review/coordination protocols that serve to tailor quantity and service particulars on a monthly basis (see fig. 4,5,6,7).

(Fig. 4) Coca-Cola's Demand, Operations & Inventory Planning.

Source:"Demand Operations Inventory Planning."

(Fig. 5) Flow Analysis of Coca-Cola's DOIP Alignment and Goals

Source:"Demand Operations Inventory Planning."

(Fig. 6) Flow Analysis of Coca-Cola's Supplier to Customer Supply Chain

Source:"Demand Operations Inventory Planning."

(Fig. 7) Example Horizon Planning Map for Coca-Cola

Source:"Demand Operations Inventory Planning."

Achieving Strategic Fit

In considering strategic fit, one asks whether an organization is effectively managing its resources and capabilities to best match with opportunities available in the market environment. Given the above financial ratios, and more importantly, their relative evenness compared to Coca-Cola's largest

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