PowerPoint Presentation

Group MembersNosharwan Khalid 12-arid-2546Shahjehan Khan12-arid-2547Summiya Mukhtar12-arid-1665Shailla Anjum12-arid-1759Zill-e-Huma12-arid-1625Saira Altaf 12-arid-1659

TopicSupply Chain Management at

INTRODUCTIONThe Coca-Cola Company is an American multinational beverage. Headquartered in Atlanta, Georgia.Dr. John Syth Permberton a pharmacist produced the syrup of Coca-Cola in 1886. He took the syrup to the Jacobs Pharmacy in 1889 where it was placed on sale as Coca-Cola fountain drink for five cents of a glass.The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler and he incorporated The Coca-Cola Company in 1892.The Coca-Cola Corporation entered in Pakistan market in 1953 after purchasing local plant located in Karachi, Hyderabad, Gujranwala, and Sialkot. In 1970, Fanta and Sprite were introduced in Pakistan. The Coke Company entered into the entertainment business in 1982. In, 1984 Coke foundation was established to utilize resources to benefits society.

Current CEO Muhtar KentOver 146,000 employees around the worldMore than 500 brands in over 200 countries or territories More than 1.7 billion servings per daySponsorship: Olympics, FIFA, etc.Charity and contributions 1% from the total incomeThe Coca Cola Foundation, 1984. Financial support for improving society.2002-2010 more than $690 millions of contribution and charity.

Coca Cola in PAKISTAN

Strategies at coco cola:CONT.Company has successfully positioned it self on the following standards:

LOCATIONLocation selection decision of Multan beverages was done in 1964 with the help of parent company. This selection seems to be dependent on following considerations.Multan Center of Southern PunjabSouthern Punjab is highly populated area of Pakistan. It possesses plenty of potential for consumer product companies. The corporate decision-makers also realized the fact and made the decision to start production in Multan.Multan is the center of the Southern Punjab so is southern Punjab Multan was selected for facility locations. Due to centralization proximity to customers on all these sales of Southern Punjab become easy.This factor also decreases high transportation expenses because Beverage Company like Coca-Cola could not afford to be at a long distance from the market.

PRODUCTION PROCESSProduction process at Multan beverages could be divided into following heads.Purchase of BottlesCollection of BottlesWashing of BottlesInspection section (empty bottles)Soak processLight room (empty bottles)Filling of bottlesLight room (Filled bottles)LoadingPacking

MANUFACTURING OF COCA-COLAStep 4

Bottling & Distributiona.b.Coca-Cola beverage a.Depalletizer b.Inspection

Capping

Level detectingFilling

Warming

Labeling

Warming

Tray PackerAttach Bar code stickerDecoder on trayDate coder on bottle

Shrink Wrapper13

LahoreINVENTORY POLICY

The COCA COLA BEVERAGES PAKISTAN is currently operating and using the FIFO (first in first out) method for its inventories in the accounts and finance departments. However the actual information of the inventories can not be disclosed and provided here as it is the companys confidential matter.Coca-Cola Company determines cost on the basis of the average cost or first-in, first-out methods(FIFO).First-in-first-out stock valuationA-B-C classificationFirms normally try to keep stock moving in Assumes that the first inventory purchased is the first inventory sold. line with purchases dates to prevent old items from being shop-soiled, outdated.

RAW MATERIAL / PROCUREMENTConcentrateMultan beverages have to get the concentrate from Lahore, which is the Franchiser Company of Coca-Cola. This concentrate is a major component of the finished goods. The parent company is itself quality conscious company so Multan beverage has never had any complaint about the concentrate quality.SugarSugar is purchased from different suppliers. When there is major or regular need then order is placed to the Ittefaq sugar mills or Sheikhupura Sugar Mills. Company also receives the certificate of analysis from the supplier before delivery. Sugar is also tested in the lab of the company.Very high standards are kept to process. the water and then several checks are made whether the quality of water is up to the required standard or not. WORK IN PROCESS (LAHORE)Syrup treatmentThe syrup produced is treated at about 9.2 F.H to make hygienic. This process makes the quality of product more reliable. Coke Company already has given the standards to check the syrup.Lab testWhen carbon dioxide and ammonia are added to the syrup then a lab test is made of the ingredients of the products. This test is most important test as it is the final test before the converted into the finished product.

FINISHED PRODUCTFinished good testFinished product is randomly selected and tested in the lab. This test also checks the ingredients and preservation status of the bottles. In the finished goods test two type of test are used to maintain the quality of finished products.

AppraisalInternal failureExternal failureMultan Beverages company have not any external failure cost but they have internal failure cost associated with finished products inspection. When the bottles are under or over filled, higher or lower sugar quantity and higher or lower gas volume than standard then the internal failure cost incur. Company also has Appraisal cost which is related to detect the causes before the product is going to complete.

SAFETY STOCK

The company does maintain the safety stock of all the raw material used, but does not have any dead line for the safety stock. The average safety stock of concentrate and sugar is as follows.ConcentrateOne week safety stockSugarFive days safety stock

LEAD-TIMELead-time is the time between order reached and orders received. Lead-time for different raw materials in the Coca-Cola Company is as followsConcentrateTwo days lead-timeSugarOne day lead timeCo2Three day lead timeConsideration for other locally available raw material is not troublesome as this material are commonly available in the market.

PRICING STRATEGYFollowing factors Coca Cola kept in mind while determining the pricing strategy. Price should be set according to the product demand of public. Price should be that which gives the company maximum revenue. Price should not be too low or too high than the price competitor is charging from their customers otherwise nobody will buy your product. Price must be keeping the view of your target market.

The price of Coca Cola, despite being market leader is the same as that of its competitor Pepsi Cola. Sometimes, Pepsi places its customers into some psychological pricing strategies by reducing a high priced bottle and consumers think that they save a lot of money from this. PRICING STRATEGY Cont.COMPETITION BASED PRICING APPROACH Coca Cola has intense competition with neither Pepsi so its pricing cant exceed too much nor decrease too much as compared to the price of Pepsi Cola. If price of the Coca Cola exceed too much from the Pepsi then people will shift to the Pepsi Cola and on the other hand if the price of Coca Cola decreases people might get the impression that its quality is also low. PROMOTIONAL PRICING POLICY Coca Cola has offered promotional prices very frequently. Especially on some occasion Coca Cola reduces its rates like in Ramzan Coca Cola reduces its rate unto 5 Rupees on 1.5 liter bottle. MARKET PENETRATION PRICING POLICY Prices in beverage industry are determined by the consumer. In an economy like that of Pakistan, consumers tend to switch towards a low priced product. Coca Colas objective is to target every consumer of the country so Coca Cola has to set its prices at such a level which no one can offer to its consumers. That is why Coca Cola charges the same prices as are being charged by its competitors. Otherwise, consumers may go for Pepsi Cola in case of availability of Coca Cola at relatively high price.

SOURCINGSourcing There are three types of sourcing Sole Multiple Single

Sole source of supplier implies that the organization is forces to use only one supplier such as Patents, raw material location, only one organization producing items Multiple Source is used of two or more suppliers for an item usually three suppliers are chosen, and their portion of the business is a function of their performance in term of price, quality and delivery. It is also eliminate disruption of supply duet strikes and other problems Single sourcing is a planned decision by the organization to select one supplier for an item when several sources are available. It results in large long term contracts and a partnering Relationship.

FACILITY LAYOUTIn Multan beverage was installed then due to limited space the washer placed in side the production hall. Heat comes inside the production hall due to washer temperature. This washer should be out side the hall for the health of employees.The company realized this thing while installing the second unit. Now the washer of second unit is placed out side the hall. Other layout designing has been set according to the standards prescribed by the parent company.

LOGISTICSPARAMETERS1) Average order sizea) Distributor to companyb) Retailer to DistributerBased on Demand, Season2) Order placementa) Distributor to companyb) Retailer to distributerPhoneDistributor Representative3) Transit Time2 Days4) Order frequencyDailyPARAMETERS5) Inventory Maintained1 day6) Unsold/Damaged MerchandiseReplaced7) Technologya) A/C Keepingb) Stock keepingc) Complaint Handling8) Mode of Transportation(company to distributor)Company vehicle9) Transportation Expensesa) Company to Distributorb) Distributor to retailerCompanyDistributor10)Warehousinga) Storage Capacityb) OwnershipMinimum 30 m2Owned / Rented11) Stock keeping responsibilityStock keeperLOGISTICS Cont.

Full Coverage - 59 RoutesRetailer HandlingOwned & contracted vehicles

Transporting Vans1 Driver + 2 Loaders No returnRetailers Loss

On a tablet or manual sheetFLOW OF THE PRODUCT

Cannot take more than orderCont.Only cash except for a fewDISTRIBUTION CHANNELS Coca Cola Company makes two types of selling Direct selling Indirect selling DIRECT SELLING In direct selling they supply their products in shops by using their own transports. They have almost 450 vehicles to supply their bottles. In this type of selling company have more profit margin. INDIRECT SELLING They have their whole sellers and agencies to cover all area. Because it is very difficult for them to cover all area of Pakistan by their own so they have so many whole sellers and agencies to assure their customers for availability of Coca Cola products.

Cont.Area wise distribution & promotion schemesFocus on high traffic locationsRailway stations AirportsBus standCoke distributes using 2 routesDirectIndirect