Transforming resources

This illustration shows how manufac-turing operations convert inputs intofinished outputs.

Coca-Cola’s bottlers and canners areconcerned with a range of processesinvolved in transforming resourcesinto the bottles and cans of drink thatwe are familiar with.

There is a difference between trans-forming resources and transformedresources:

• The transforming resources are themanagers, employees, machinery andequipment used by The Coca-ColaCompany and its franchisees.

The transformed resources are

the materials (the cans, bottles,

liquids, etc.) and the information

which are processed to create the

finished product.

Manufacturing Coca-Cola

Primarily, Coca-Cola is manufactured by

franchisees who are the world’s leading

bottling and canning companies. This

franchise business is strictly controlled

by The Coca-Cola Company.

Soft drinks manufacture is a competitive

business. Manufacturing techniques

are continually improved. This helps

meet the highest quality standards

for its products using the most cost

effective production techniques. For

example, very small changes in the shape

of the can could save a canning factory

millions of dollars in production costs.

The production of Coca-Cola involves

two major operations:

• creating the packaging material

• bottling and canning the finished

drink.

Packaging

For many years, Coca-Cola was

produced in glass bottles. Because of

the high cost of distributing bulky

bottles, they had to be manufactured

close to where the bottling took place.

Today, this is no longer so important

since new packaging methods have

revolutionised the process.

Advanced bottling and canning

technology makes Coca-Cola cans and

bottles very light but extremely strong.

The Company has invested a lot

of time and money in research and

development to ensure the most

effective life cycle impact of its

packaging. By using the minimum

quantities of materials in packaging,

the cans and plastic bottles are simple

to crush or to reprocess at the end of

the initial life cycle.

Preparing to fill cans

Cans are delivered in bulk to a canning

plant. At this stage the cans are shaped

like an open cup ready to receive the

liquid drink. They are not fully formed

because the ring pull end has still to be

fitted. After they have been inspected

to check that there are no faults, each can

goes through a rinsing machine to make

sure it is clean and ready for filling.

Preparing the drink

Coca-Cola consists of a concentrated

beverage base and a liquid sweetener

which are combined to form the syrup

from which the drink is made. The

Company ships the concentrate to

bottling and canning plants where the

franchisees mix it with sugar and local

water. The water is passed through a

number of filters to make sure it is

absolutely pure. Carbon dioxide,

which makes it fizzy, is also delivered

to the canning plant where it is stored

and then piped into the manufacturing

process through a carbonator and

cooler. The Company specifies what

equipment franchisees will use to carry

out these processes.

Samples are taken regularly for chemical

analysis, and staff make frequent spot

checks to ensure that plants are

maintaining the Company’s standards

of cleanliness and quality. The

Company provides its franchisees with

the most up-to-date technology avail-

able and many of them use the latest

computer technology and statistical

process control methods.

Filling the cans

The packaging and the finished drink

are combined by a rapid filling process.

Every minute hundreds of cans pass

along an automated production line

and are filled with a precise amount of

Coca-Cola. As the cans move along the

production line, they are seamed to

include the ring pull end and produce

the finished can. The ends are inspected

to make sure they are smooth and do not

have any gaps or leaks. An individual

code is stamped on the cans so that

each one can be traced back to the

Making the World’s Best Known Product

INTRODUCTION• How is the most widely recognised

product in the world made?

• How are the required quality standards metfor every single unit of that product?

This case study answers these questions by outlining the manufacturing processes for Coca-Cola - the mostwidely recognised global brand from London to Lagos, Los Angeles to Lahore. It is sold in more andmore markets, creating thousands of new jobs in the local economies. The brand is owned by The

Coca-Cola Company which works with fran-chisees across the world. These franchisees

perform the bottling and canning operations and are also known

as packagers.

TRAN

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point and time of production. A date

code ensures product freshness. The

cans now look like those you will see

in the shops.

Guaranteeing the quality of the product

The manufacture of Coca-Cola is

carried out by a set of processes called

continuous flow production. On a

production line, a process is continually

repeated and identical products go

through the same sequence of operations.

Continuous flow production takes this

one step further by using computer-

controlled automatic equipment to

produce goods 24 hours a day.

The Company and its franchisees use

Total Quality Management proce-

dures that encourage everyone in the

plant to think about quality in every-

thing they do. Every employee sets out

to satisfy customers and places them at

the heart of the production process. By

continually seeking to improve every

aspect of production, employees are

able to eliminate problems.

Throughout the production process,

quality control personnel monitor the

product and take test samples. To

guarantee that there are no errors,

quality control inspectors take statisti-

cally selected samples at the end of

the production line. Using chemical

analysis, these inspectors can guarantee

that the product meets the exact speci-

fications; they also check that there are

no faults in the packaging. A ‘fill height

detector’ uses an electronic eye to ensure

that the cans are filled to the right

quantity. Cans that are not properly

filled are rejected.

Packing the end product into cases

The canners then prepare the cans for

distribution to retailers such as super-

markets, shops and garages. A machine

called a case former creates the casing

that protects the cans as they are sorted

onto pallets. The cans are stored tem-

porarily in a warehouse before they are

collected by large distribution trucks.

Bottling Coca-Cola

So far this case study has focused on

the canning process for Coca-Cola.

The bottling process, whether in glass

or PET (plastic), is very similar. Each

plastic bottle starts as test-tube size and

is blown up like a balloon into the final

bottle shape. Whereas franchisees

receive cans that already have the logo

and any promotional details on them,

bottlers apply the labels from large reels

once the bottles have been formed.

At the end of the bottling line, bottles

are automatically sealed with a cap

immediately after they have been filled.

Just-in-time

Canners and bottlers process vast

quantities of materials each week.

Receiving the raw materials and deliv-

ering the finished products involves a

complex sequence of actions.

The ideal solution is to make sure that

the inputs for the process arrive ‘just-

in-time’ so they can be transformed

into a finished product ready for trans-

portation ‘just-in-time’ to meet the needs

of the retailers. At modern canning

plants, the can maker is often located in

an adjoining facility, with delivery

through a ‘hole in the wall’ operation.

The packagers are involved in sophisti-

cated supply chain networks with the

supermarket chains and other outlets to

ensure that this process runs smoothly.

Canners and bottlers must ensure that

they do not build up large stockpiles of

cans waiting to be sold but they must

also make sure that deliveries are not

late. This is where they benefit from

advanced information technology that

rapidly relays figures about the demand

for Coca-Cola. For example, this

demand usually rises in periods of

hotter weather so the packagers need to

plan increased production.

Canners and bottlers work closely with

The Coca-Cola Company and other

suppliers to provide a smooth running

supply chain so that consumers are

always within ‘an arm’s reach of

desire’ and can always buy a drink

when they want one.

Performance feedbackto canners and bottlers

In addition to each canner or bottler’s

own quality assurance procedures,

sample bottles and cans from each

market are tested regularly by The

Coca-Cola Company. The results are

then reported back to the packagers.

This feedback helps The Coca-Cola

Company and the franchisee to work

together and identify opportunities for

improvement. Franchisees undergo

constant training and retraining in qual-

ity assurance, and can always ask for

help and advice about ongoing

improvement.

Conclusion

To produce the world’s best known

product, The Coca-Cola Company has to

employ the highest quality processes and

establish standards which guarantee the

production of a standardised product

which meets consumers’ high expecta-

tions each and every time they drink a

bottle or can of Coca-Cola. In order to

guarantee these standards the Company

has had to develop a close relationship

with its franchisees based on a mutual

concern for quality. Total Quality Man-

agement lies at the heart of this process

involving a continuous emphasis on

getting quality standards right every

time and on continually seeking new

ways to improve performance.

GLOSSARY OF KORDS

Continuous flow production: Anongoing twenty-four hour productioncycle in which partly finished and finished products pass along a production line.

Cost effective: An approach that minimises or significantly reduces the cost of operations.

Franchisee: An individual (or organisation) that is licensed to produce and/or sell a named productin a given area, in return for a fee, a share of the profits or sales.

Global brand: A product that isrecognisable across the world by its logo, packaging or distinctive trade mark.

Inputs: Materials and labour that go into a production process.

Just-in-time: Supplies for manufacturing processes are received just as they are needed, and the end product reaches the consumer just when it is wanted.‘Just-in-time’ reduces the need tocarry large stocks of materials or finished goods helping cashflow.

Life cycle impact: Examining theimpact of a product from the point at which the raw materials start to be produced and assembled, throughthe manufacturing process, right up to the time at which the consumerfinally disposes of the packaging of the product.

Operations: The processes involvedin the production of a product, such as filling a can, checking that the can is sufficiently filled, etc.

Outputs: Goods and services that are produced once raw materials havegone through a transformationprocess.

Performance feedback: Providinginformation on the success of performances so that improvementscan be made. For example, if a weakness is spotted in quality standards, then it would be necessaryto inform the packager so that thesecould be rectified immediately.

Statistical process control: The use of mathematical and statisticalcontrol processes in the manufactureof products e.g. by measuring quantities of fluid used in givenprocesses, measuring quantities of materials used, etc. to ensure that inputs and outputs always meetspecified quantitative standards.

Supply chain: The chain of processes that links a manufacturerthrough a distributor to a customer.

Total Quality Management: Anapproach that ensures quality at everystage of production, rather than just at the end of the production cycle.

Transformed resources: Resources,such as raw materials and information,that are modified in the process ofproduction by the transformingresources.

Transforming resources: Resourcesthat are used to transform other inputs.

3 Why is Total Quality

Management such an important

part of producing Coca-Cola?

When does Total Quality

Management take place in the

production process?

4Relate TQM to the concept of Kaizen.

5 Explain JIT through

three examples drawn

from the world?

2 Why is it possible to produce

Coca-Cola using a continuous

flow method of production?

1 List four inputs and four

processes that are involved in

producing a bottle or can of

Coca-Cola. Why does at least

one of the inputs that you have

listed have to be supplied to

bottling franchisees directly

by the Company?

QUESTIONS